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Amazon to face higher shipping charges under proposed Postal Service prices hikes

BY Marianne Wilson

The last mile of package delivery is likely to be get more expensive come the new year.

The U.S. Postal Service is seeking record price hikes, including up to a 12.3% increase in shipping charges for the parcel select delivery service used by Amazon and such companies as FedEx.

The USPS proposed a 9.3% increase on the service for packages weighing over one pound and a 12.3% increase on lighter packages. According to Barclays, Amazon’s retail operating income could drop 5% if the proposed hikes go into effect, reported Marketwatch.

In addition, the Postal Service is also seeking a 5-cent increase in the price of a First-Class Mail Forever stamp, from 50 cents to 55 cents, and a 10% hike in first-class stamps. Priority Mail would increase by an average of 5.9%.

The proposed hikes come as President Donald Trump has frequently criticized the Postal Service for losing money by not charging higher shipping rates for online retailers, notably Amazon. However, industry experts credit the Post Service’s mounting financial losses to the ongoing drop in physical mail volume in a digital age along with heavy pension obligations for retirees.

The request to raise prices was made by the USPS’ board of governors. The proposed increases, would take effect on January 27, 2019, have to be approved by the Postal Regulatory Commission.

“The Governors believe these new rates will keep the Postal Service competitive while providing the agency with needed revenue,” the USPS stated in a release. “The Postal Service has some of the lowest letter mail postage rates in the industrialized world and also continues to offer a great value in shipping.”

The complete Postal Service price filings with the new prices for all products can be found on the PRC site under the Daily Listings section at https://www.prc.gov/dockets/daily (see listing for Oct. 10).The price change tables are available on the Postal Service website at https://pe.usps.com/PriceChange/Index.

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Walmart puts a new spin on mobile payments

BY Deena M. Amato-McCoy

A discount giant’s newest partnership is giving customers a new way to use their PayPal mobile wallet.

Walmart announced on Thursday that a new collaboration with PayPal enables customers to load cash or withdraw funds from their PayPal mobile app while shopping in its stores. The service has a $3 fee per transaction.

The partnership marks the first time that PayPal mobile app users will be able to take cash out of their account, and load cash into their PayPal mobile wallet in a brick-and-mortar environment. Similar to PayPal mobile app users, PayPal Cash Mastercard customers are also able access their cash balance using Walmart Service Desks, ATMs and cash registers for the same fee.

PayPal deposits are already accepted at all United States-based Walmart stores. The cash-out service will be available by early November, according to the retailer.

“Walmart is committed to expanding access to financial services products that are convenient, easy to use and available for everyday low prices,” said Daniel Eckert, senior VP, Walmart services and digital acceleration. “With 90% of Americans living within 10 miles of a Walmart store, we know that offering PayPal cash in and cash out money services for an exclusive low fee is going to provide great value to the many people who rely on Walmart and PayPal to help manage and move their money.”

Both companies expect the partnership to “make it simple and easy for people to use PayPal cash in and cash out money services…,” said Dan Schulman, president and CEO, PayPal. “We look forward to working hand-in-hand to help people and families with their financial services needs.”

The news comes on the heels of another new financial collaboration for Walmart. The discounter announced in July that it has entered into a long-term agreement with Capital One. Starting Aug. 1, 2019, the company will be the exclusive issuer of Walmart’s private label and co-branded credit card program in the United States. The move ends a nearly 20-year partnership with Walmart’s existing issuer, Synchrony Financial.

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Ikea’s new Midwest distribution center has a couple of firsts

BY Marianne Wilson

Ikea has broken new ground with opening of its Midwest distribution center, located in Joliet, Illinois.

The home furnishings giant built the 1.25-million-sq.-ft. facility to serve the inventory needs of stores throughout the Midwest, as well as customer fulfillment of online orders. The center is equipped with automation technology on a scale unlike anything currently in use within Ikea’s customer fulfillment network, and which allows for increased storage capacity.

The design of the Joliet facility increases co-worker efficiency due to the proximity of the dock doors to the automated storage system. Co-workers use forklifts to drive pallets into a machine called an interface station, which eventually feeds the pallet into storage. This technology allows the Joliet distribution center to provide 50% more storage capacity than any other Ikea facility.

In addition, the building is LEED Gold Certified, a first for Ikea properties in the U.S. A key environmental highlight is the 268,920-sq.-ft. solar array, which was built with 9,036 solar panels and currently the largest in Illinois. The array will produce approximately 3,377,000 kWh of electricity annually for the facility, the equivalent of reducing 2,513 tons of carbon dioxide, or the emissions generated by 538 cars or electricity provided to 377 homes yearly.

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