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US Postal Service bids for last-mile delivery to increase revenue

The U.S. The U.S. Postal Service announced on Tuesday that it will launch an online platform for 'proposals to access its last-mile network. This would allow a wider range of customers to raise funds by opening up more than '18,000 destination delivery units nationwide and local processing centres to a broader audience. USPS had warned that it would run out of money as early as 2027. U.S. postmaster general David Steiner said last month he hoped Amazon.com, and other major retailers, would bid in the auction. Steiner stated that this could add millions of dollars to USPS's revenue.

Amazon didn't immediately respond to a comment request on Tuesday.

The US Postal Service delivers to over 170 million U.S. address six days a weeks, and the last mile is the most expensive part. The last mile can be very expensive for other companies such as FedEx, UPS, and Amazon.

"We definitely?have a?precarious cash situation. Steiner stated in December that we would be out of money within 12-24 months.

USPS currently sells about 1.7 billion capacity units from its last mile distribution. However, it has the capacity to deliver 3.5 to 4 billion. These deliveries generate $5.5 to $6 billion annually in revenue. Donald Trump, the Republican president, called USPS "a tremendous loser for our country" in February last year. He said that he would consider merging USPS with the U.S. Commerce Department. Democrats claimed this move would violate federal law. Steiner, the new postal chief who was appointed by the White House in July, said last month that privatizing USPS would be "never feasible." "There is no private company that would be interested in the Postal Service...? The delivery of mail is an unbelievably expensive endeavor."

He said that the idea of merging USPS and Commerce "never really made sense from a commercial point of view."

Government Accountability Office said USPS has lost $118 billion in net profits since 2007. First-class mail, its most profitable product, is at its lowest level since 1967. In 2022, the U.S. Congress approved legislation that would provide USPS with financial relief of about $57 billion. Reporting by David Shepardson, Washington; Abhinav Paramar, Bengaluru. Editing by Matthew Lewis.

(source: Reuters)