USPS to ally with Amazon (NASDAQ:AMZN)

According to an announcement by the postal services of the Unites States of America, the groceries will be delivered on Amazon (NASDAQ:AMZN) on trial basis. This will result in strengthening the relationship between the e-commerce provider and the biggest mail shipment service. The USPS (U.S. Postal Service) used by Jeff Bezos of Amazon (NASDAQ:AMZN) caters to 40% of the global mail as well as calls upon every house in America for at least six days a week, not to mention the deliveries of packages on Sundays for Everything Store.

This is revealed just when the USPS is experiencing tension with its two major rivals Fed Ex (NYSE:FDX) as well as UPS (NYSE:UPS). The delivery charges by the USPS are being decreased just when the rates at the private companies are expected to increase. Due to this decrease in charges it is obvious that the Fed Ex (NYSE:FDX) and UPS (NYSE:UPS) are afraid of losing customers to USPS. The e-commerce providers were annoyed last December, when a lot of customers received their parcels after Christmas due to the misjudgement on the part of Fed Ex (NYSE:FDX) and UPS (NYSE:UPS). Fed Ex (NYSE:FDX) and UPS (NYSE:UPS) were unable to comprehend the volume of the packages correctly which caused the delay. All of this resulted in the increasing tension between the rival companies because of the competition.

Fed Ex (NYSE:FDX) and UPS (NYSE:UPS) argue that the delivery service owned by the government has undue benefit because it has a monopoly on delivering of the letters. This argument holds true if you look at the background of the company which has kept the USPS going. USPS has the advantage over Fed Ex (NYSE:FDX) and UPS (NYSE:UPS); however, lately the first-class mail has lost popularity amongst users because of the use of e-mail. Not many people use the old method of sending letters anymore. The monopoly of the USPS means going from door to door six days a week to find out if people have pending letters that need to be picked up. This is a universal service demand.

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The ongoing competition and the tension between the companies is not something that can be over looked. The solution to the rift between the USPS and the private shipment companies is, that the Congress should allow the USPS to hand over the monopoly, and let the companies and couriers contest for this declining business, just as it was done by the European posts. This will ensure that the USPS will compete more effectively with its rivals, and thus help averting a financial crash.

USPS will therefore become more favorable to the private investors who are as of now more inclined towards European posts. The USPS will then be able to develop its old fleet of trucks with the flowing money and modernize their vehicles. However, whether the private couriers will agree to it or not, is the question? It is yet to be seen whether the private courier’s interest is personal or not.