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UPS Wants Higher Postal Rates but Supreme Court Denies Cert

UPS Wants Higher Postal Rates but Supreme Court Denies Cert

UPS has long sought higher postal rates for packages, but it faced a setback this week when the Supreme Court declined to hear its appeal in a case it brought against the Postal Regulatory Commission (PRC).

Shipware summed up the news in a tweet that linked to a Bloomberg article: “The U.S. Supreme Court rejected a UPS appeal aimed to force the U.S. Postal Service to raise its prices for delivering packages. The rebuff is a victory for Amazon, which relies on the Postal Service for deliveries and backed it in the court case.”

SaveThePostOffice.com explained the case in depth in this April 5th article. The following excerpt is helpful in understanding the argument UPS made in its lawsuit – and the consequences of a UPS win:

“UPS believes that the Postal Service has been using a method for allocating its costs that allows the Postal Service to charge unfairly low prices on parcels. If UPS were to prevail in the case, more of the Postal Service’s costs would be assigned to competitive products (which include parcel shipping), and that in turn would lead to higher prices for the services with which UPS competes. UPS could then raise its rates as well, or at least be in a better competitive position to increase its market share.”

Amazon filed an opposition brief. In part it said the PRC had revised its costing methods and increased the portion of institutional costs allocated to competitive products, showing that the Commission was responsive to the policy concerns UPS had raised.

Amazon plays an interesting role as both customer and competitor of both UPS and the USPS as it rolls out its own logistics capabilities.

Shipping costs are a crucial concern for online sellers in an age when shoppers believe there is such a thing as “free shipping,” with many sellers relying on the US Postal Service. Many of them are likely to consider the High Court’s decision a win, at least for now.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

4 thoughts on “UPS Wants Higher Postal Rates but Supreme Court Denies Cert”

  1. I find it hilarious that ups and fed ex cant get usps in on their price fixing and collusion.

    If ups and fed ex want to compete, they need to lower prices…that’s how business works.

  2. “unfairly low prices on parcels”…unfair to who? The USPS prices are already beyond ridiculous, so that just makes UPS and Fedex rates even more ridiculous, and they want to raise rates so they can make more money?

    As it is, the USPS has been fighting to stay afloat because of all the discounts places like China get — and U.S. customers are the ones making up the difference. If anyone should be bringing up a case to the Supreme Court, it should be the USPS to force other countries to pay more and stop the government from requiring that pensions be paid decades in advance.

    Another key point should be the fact that the USPS is owned and operated by The People. It’s a non-profit organization, so should be exempt from any such “unfair” claims from for-profit competitors.

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