A US Postal worker delivers Amazon boxes outside of the New York Stock Exchange (NYSE) on October 11, 2018 in New York City.
Spencer Platt | Getty Images
President Donald Trump has routinely blamed Amazon for problems with the U.S. Postal Service, but new documents show the e-commerce giant remains a large and lucrative customer for the USPS.
The USPS circulated “fact-checking statements” internally that buck Trump’s criticisms of Amazon and shed new light on its relationship with the company, according to documents obtained via a Freedom of Information Act request by watchdog group American Oversight. The documents were first reported by The Washington Post.
Trump has claimed that Amazon costs the Postal Service “billions,” but the USPS said in the fact-checking statements, circulated earlier this year, that Amazon was the Postal Service’s “largest customer” in fiscal 2019, generating about $3.9 billion in revenue and $1.6 billion in profit.
The Postal Service also countered Trump’s oft-repeated argument that it needs to raise prices to make money on deliveries, the documents show. By contrast, the USPS said it has the largest price increases “in recent history” from 2018 to 2019, including a 10% price increase for its Parcel Select service, which is used by Amazon.
“USPS would see a net contribution loss with a significant share of its package business if prices were to be raised significantly,” according to the documents. “USPS competitors could take share in these instances.”
According to the documents, the agency also expressed concern in April that, if it were to raise prices, it would “cede ground” to competitors and Amazon’s growing logistics network.
“Amazon has been aggressively insourcing volume with Amazon logistics, sending two billion-plus packages in fiscal 2019, which primarily cuts into USPS’ share,” the documents state.
A spokesperson for The White House was not immediately available to comment on the documents.
The documents provide a glimpse into the extent of the Postal Service’s relationship with Amazon, which became complicated months into the coronavirus outbreak.
Amazon relies on several carriers to deliver packages, such as UPS and FedEx, and is building its own network of contracted delivery partners. But the documents illustrate how Amazon continues to rely on the Postal Service.
The Postal Service delivered more than 1.5 billion Amazon packages, or roughly 30% of its total volume, in fiscal 2019, according to the documents.
The USPS delivers Amazon packages that are fulfilled by Amazon warehouses, known as Fulfillment by Amazon, and orders that are fulfilled independently by third-party merchants. “The majority of revenue and volume from Amazon” is through FBA, the Postal Service stated, according to the documents.
The Postal Service faced pressure from Amazon in April, as the pair were in the process of negotiating new pricing agreements. The USPS held a teleconference with Amazon on April 9, wherein Amazon voiced concerns about the agency’s “viability to them as continued shipping partner,” according to the documents,
“Amazon made it very clear that the USPS is alone, globally, among their partners in having this pricing uncertainty,” the documents state. “Additionally, Amazon is concerned that any stimulus from the Treasury will come with stipulations, causing concern and further risk.”
Amazon pressed the Postal Service to answer questions about its financial woes, which were exacerbated by the pandemic. Among the questions it asked were: “What does the USPS look like in the next few weeks, the next few months and the next several years?”
Amazon declined to comment on the nature of the company’s relationship with the USPS or what members of Amazon’s leadership were present during the April 9 meeting with the Postal Service.
“For more than two decades, Amazon has partnered closely with the United States Postal Service to invent and deliver for our customers, which has resulted in significant revenue for the USPS and thousands of American jobs,” Amazon spokesperson Rena Lunak said in a statement. “USPS continues to be a great partner in serving Amazon customers.”
Snowflake’s complicated ties to Amazon are a big risk as investors prepare for one of year’s hottest IPOs
The airline industry may be reeling from the coronavirus pandemic, but Amazon‘s air cargo business has rapidly accelerated in recent months.
Between May and July, Amazon added nine planes to its Amazon Air fleet, “the most it has added over a three-month span since its inception,” said the report issued Thursday by DePaul University’s Chaddick Institute for Metropolitan Development.
“Amazon Air expanded rapidly during summer 2020, a period otherwise marked by sharp year-over-year declines in air-cargo traffic,” the report states.
Amazon’s air fleet, launched in 2016, is a critical part of its push to provide one- and two-day delivery. The company still relies on outside carriers for a significant share of its deliveries, but it has gradually moved more of its logistics operations in-house, allowing it to better control costs and delivery speeds. Analysts believe Amazon’s air fleet, combined with its massive network of airplanes, truck trailers and vans, could one day position it to rival UPS and FedEx.
The coronavirus pandemic has generated even more pressure on Amazon to ensure fast delivery, as it saw a surge in online orders from stuck-at-home shoppers who turned to the company for essential goods and groceries, along with other products like office supplies and electronics.
While its fleet has grown since May, Amazon Air still remains smaller than its rivals, including FedEx, which operates 463 planes, UPS’ fleet of 275 planes and DHL’s 77 planes, DePaul researchers said in a separate report published in May.
Amazon’s $1.5 billion air hub in Northern Kentucky could help give it an edge, the report said. The hub, scheduled to open in 2021, is designed to have capacity for 100 Amazon-branded planes and handle an estimated 200 flights per day.
“The massive investment being made in a large hub at Cincinnati/Northern Kentucky International Airport, however, could change everything,” the report said. “This hub appears to be the lynchpin to Amazon’s efforts to develop a comprehensive array of domestic delivery services across the United States.”
Jeff Williams introduces the new Apple Watch capable of taking an FDA-approved electrocardiogram at the company’s annual product launch, Wednesday, Sept. 12, 2018, in Cupertino, Calif.
Karl Mondon | Digital First Media | Getty Images
Apple’s invitation for big event included the tag line “Time Flies,” a hint that we can expect to see a slew of announcements related to its Apple Watch on Tuesday.
At least one analyst believes there’ll be a new model, the Apple Watch 6.
Health and fitness has been a major focus for the product ever since Apple started selling it in 2015. The team has rolled out feature after feature, moving from basic activity tracking to heart rhythm monitoring and more.
But there are technical and scientific limitations to what can be packed into a wrist-worn device. Some of the most challenging applications that have eluded wearable makers so far include noninvasive and continuous blood sugar, as well as blood pressure tracking. If either of those sensors were announced, it would be a major breakthrough, but we don’t expect those at Tuesday’s virtual event.
More likely, Apple will roll out some more achievable wins that will still put it ahead of the competition. The Apple Watch has dominated the wearables market for the last five years, but Google‘s proposed acquisition of Fitbit could give it an infusion of new talent and cash (if regulators approve the deal), and Amazon made a splashy entrance into the space earlier this year with its Halo fitness wearable.
Workouts for everyone stuck at home
Members exercise inside Chelsea Piers Fitness, Manhattan’s largest fitness facility on the first day of the re-opening of gyms in New York City following the outbreak of the coronavirus disease (COVID-19) in New York, September 2, 2020.
Mike Segar | Reuters
The wellness space is an attractive opportunity for any consumer technology company, because it’s both a big market and largely unregulated. Apple’s growing team includes veteran fitness trainer and consultant Jay Blahnik, who likely has big plans for Apple Watch.
In March, CNBC reported that Apple is working on a new app code-named Seymour that guides users through exercise routines on the Apple Watch and iPhone. Users can follow along via downloadable videos and try out a range of activities from cycling to strength training. By offering this kind of fitness content, Apple is moving closer to Peloton‘s territory. Along with its spin bikes and treadmills, Peloton sells a subscription-based video library of fitness classes.
It would be a timely move for Apple, given that many gyms across the country remain closed and home workouts may still seem like a safer option during a pandemic.
From there, we could see Apple offering more tailored workouts for people with medical conditions like type 2 diabetes, which might even involve personalized coaching. Such a service could be subscription-based, if Apple can show there’s an appetite for it.
An oxygen sensor
One long-rumored sensor that we could see from Apple on Tuesday is a pulse oximeter, which would allow the watch to detect blood oxygen levels. A blood oxygen detection feature was detected by 9to5 Mac in a snippet of code back in the spring, strongly suggesting that it’s on the horizon.
If the code is any indication, Apple could start notifying users if their blood oxygen levels drop to concerning and potentially dangerous levels.
This new feature will likely be released alongside medical studies, just as Apple has done in the past. The Apple Heart Study, which it unveiled in collaboration with Stanford University, looked at how effectively the Apple Watch could be used to detect a condition known as atrial fibrillation. Apple has an electrocardiogram sensor baked into its Apple Watch Series 4 and Series 5 devices to monitor the heart’s rhythm and return health information directly to consumers.
If Apple announces the sensor, it’s possible that the company will look to screen asymptomatic people rather than honing in those with a specific medical condition. Apple wants its device to be accessible and relevant to a large population of users. But it would need to prove to doctors that it won’t generate unnecessary anxiety and concern by delivering false positive results.
Apple might look to target users with specific medical conditions, including Covid-19. A pulse oximeter baked into a consumer wearable might well be useful in helping medical professionals monitor patients at home who have been diagnosed with the virus. Doctors are still debating whether the currently available devices, which work by clipping onto a patient’s finger to measure heart rate and oxygen saturation, might be helpful in monitoring shortness of breath, which can be hard for patients to assess themselves.
What do you think will be announced at Tuesday’s event? Let us know @CNBCTech.
A view of Amazon Prime delivery vans in Amazon hub, Woodside, a day after protest in Staten Island Borough in New York City amid Coronavirus Pandemic on April 1, 2020.
John Nacion | NurPhoto | Getty Images
Amazon has made two key hires to its e-bike delivery team in New York City, including a former Uber manager, signaling it may be looking at the technology as another way to offer faster delivery times.
Alex Vickers joined Amazon in June to serve as a senior program manager on the company’s electric bikes unit. He previously worked on the business development team at Jump, an e-bike rental company which was Uber acquired in 2018 and then sold to mobility start-up Lime in May. Vickers announced his move to Amazon in a LinkedIn post on Monday.
Amazon also hired Justin Ginsburgh in June to lead the e-bike team. Prior to Amazon, Ginsburgh co-founded New York City’s Citi Bike bikeshare service and had leadership roles at JetBlue and Lyft-owned bikeshare service Motivate, where he worked alongside Vickers.
Both Vickers and Ginsburgh are based in New York City. It’s unclear how many employees are working on Amazon’s e-bike team, which is overseen by Amazon’s last-mile delivery unit, or what Amazon’s plans are for the technology. Representatives from Amazon didn’t immediately respond to a request for comment.
The recent hires indicate Amazon may be looking to e-bikes as another mode of transportation for last-mile delivery, the process of picking up packages from delivery stations and dropping them off at doorsteps, which is a critical and costly piece of the logistics puzzle for Amazon.
Amazon has invested heavily to expand its last-mile delivery capabilities, launching Amazon-branded vans and a network of contracted Flex drivers, as well as testing self-driving delivery robots and a fleet of delivery drones. It has also opened up hundreds of delivery stations across the country over the past few years, which help ensure its two-day, and increasingly one-day, delivery speeds.
Amazon has experimented with bike delivery before. It tested, then later shut down, bike delivery for its Prime Now delivery service in Seattle and New York City.
The company has also been testing electric cargo bikes for Whole Foods deliveries in New York City since last December, as part of a city-run pilot program aimed at easing congestion and reducing dependence on cargo vans for deliveries. Amazon continues to grow the team working on cargo bike delivery in New York City, according to a job listing posted in August.
Other companies like DoorDash, Uber Eats, Postmates and Grubhub, use bike couriers in New York City, but they’re largely limited to food deliveries.
Snowflake CEO Frank Slootman, far right, addresses the team at an all-hands meeting.
Courtesy of Snowflake
Data storage software company Snowflake has raised its estimated IPO price by around 30% since last week, according to an updated S-1 filing Monday. Snowflake’s IPO is on track to be one of the most popular debuts in a flurry of tech IPOs this month, with both Berkshire Hathaway and Salesforce agreeing to buy shares in concurrent private sales.
Snowflake now expects to debut at a share price between $100 and $110, according to the filing. In its last filing on Sept. 8, the company said its shares would likely debut between $75 and $85.
The new price estimate would value Snowflake between $27.7 billion and $30.5 billion. The previous estimate range would have valued Snowflake between $20.9 billion and $23.7 billion.
Last week, Snowflake revealed in a filing that Berkshire Hathaway and Salesforce each agreed to buy $250 million of stock at the IPO price in a concurrent private placement. Berkshire Hathaway also agreed to buy 4.04 million shares in a secondary transaction from former CEO Bob Muglia. At the midpoint of the new estimated price range, Berkshire Hathaway’s total stake in Snowflake after the IPO would be valued at $674.4 million, compared to the roughly $550 million it would have been worth at the midpoint of the previous range.
Snowflake gives businesses new ways to store and access data in the cloud, rather than relying on databases tied to hardware. The company is growing fast, reporting that revenue in the first half of 2020 more than doubled to $242 million from $104 million a year earlier. However, it faces a complicated relationship with Amazon Web Services — it relies on AWS to host a significant portion of its business, while also competing against its Redshift cloud data warehouse offering.
Republican bill seeks to limit liability protections for tech platforms without getting rid of them completely
Three top Republicans are seeking to limit a liability shield for tech platforms while maintaining some key protections through a new bill that would reform Section 230 of the Communications Decency Act.
The Online Freedom and Viewpoint Diversity Act aims to maintain the key provisions of Section 230 that would allow platforms to keep operating openly while limiting the types of content they could moderate if they wish to maintain their liability exemption. The bill was introduced by Senate Commerce Committee Chairman Roger Wicker, R-Miss., Judiciary Committee Chairman Lindsey Graham, R-S.C. and Judiciary Committee Tech Task Force leader Marsha Blackburn, R-Tenn.
“We do think that it is important that there be a revisit and not a repeal of Section 230,” said Blackburn, who sits on both the Commerce and Judiciary Committees, in a phone interview with CNBC on Wednesday. Blackburn said the modern internet is not the same as that which existed at the time of Section 230’s creation, saying tech companies are no longer in their “infancy.”
Section 230 was enacted in the 1990s to protect tech platforms from being held liable for their users’ content. It also allowed platforms in the burgeoning tech industry to engage in good faith content moderation without taking on responsibility for their users’ posts.
It is considered to be one of the key pillars of the modern internet. The tech industry has long held that Section 230 is what enables players like Facebook and Google to continue running their businesses without fearing a deluge of costly, petty lawsuits. The law is even more important to smaller tech start-ups, larger platforms argue, that can’t bear the cost of such legal expenses.
But in recent years, Section 230 has garnered criticism from Republicans and Democrats alike who believe its protections are now outdated as tech platforms have grown to become some of the most valuable companies in the world. The law has also become a target for President Donald Trump, who issued an executive order this summer directing the Federal Communications Commission to create new rules on Section 230 protections and the Federal Trade Commission to take action against companies engaging in “deceptive” acts of communication. The order, however, has little power without action from Congress.
The new Republican bill would primarily revise three aspects of Section 230:
- It would narrow the scope of the types of content that tech platforms could not be prosecuted for removing. Currently under Section 230, platforms have a long leash to limit the reach and availability of any “material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected.” But under the new bill, “otherwise objectionable” would be replaced with specific categories of content that is “promoting self-harm, promoting terrorism, or unlawful.”
- It would seek to remove subjective judgement by tech platforms on what types of content falls into these buckets by replacing the standard of what the platform “considers to be” objectionable to what it “has an objectively reasonable belief is.”
- It clarifies the definition of an “information content provider” as any person or entity that “editorializes or affirmatively and substantively modifies the content of another person or entity” besides cosmetic changes to the format or layout of the content. That could deny 230 protections to platforms that delete user comments that are not covered by the Good Samaritan clause, for example.
Blackburn said the reasonableness standard and more specific language is meant in part to address bias in content moderation. Blackburn and other conservatives have repeatedly accused tech companies of building biased algorithms or employing moderators whose choices reflect their own leanings. While tech companies have apologized for several incidents in which content was mistakenly or unfairly removed, they’ve held that their moderation practices are consistent with their policies.
“We know that there are not going to be other alternatives to these platforms until we get these liability protections brought up to date, and we also think that there is not going to be accountability for bias until we get this brought up to date,” Blackburn said.
But narrowing the scope of what can be considered “objectionable” content could make it more risky for tech platforms to remove borderline content or content that falls into a gray area of the law. For example, while there are laws that prevent companies from promoting products with false health claims, they likely wouldn’t prevent a celebrity from sharing provably bogus health information that could pose a danger to their followers. While unforeseen circumstances can always happen, Blackburn said the categories in her bill would cover much of the harmful content shared online.
“Through the growth, development, evolution of the online space, is it conceivable that something else at a future date would be added? Of course,” Blackburn said. “What this does is take away the generality and putting in its place something specific because one of the objections that we’ve heard regularly and one of the shields that Big Tech would use is to say, ‘Well, our content moderators considered this to be objectionable.’ So to begin to put some language in place that is more definitive is, I think, a step in the right direction.”
Carl Szabo, vice president and general counsel of the tech industry group NetChoice, said the bill would prevent tech platforms from removing exactly the type of content Congress has warned them about.
“This bill would thwart social media’s ability to remove Russian or Chinese election interference campaigns, misinformation about Covid-19, and cyberbullying from their services,” said Szabo, whose members include Amazon, Facebook, Google, TikTok and Twitter. “Furthermore, the bill would prevent online services from removing the very content Congress demands they remove – notably medical misinformation and efforts to undermine our elections.”
Blackburn brushed off such criticisms from the industry as nitpicking. She said much of content people would worry about would fall under the terms included in the bill and said her focus was on bringing a bill that would revise Section 230 without repealing it.
“What I was seeking to do is to modify this and bring it to a point that we can get agreement and we can reform and not repeal because our innovators in this space are still going to need Section 230 protections,” Blackburn said, highlighting the need to give new innovators opportunities to benefit from protections that give them a chance to compete with the dominant players.
But such specificity could prevent many Democrats from getting on board with the bill, which is notably missing any Democratic co-sponsors. While Blackburn said she’s confident it will receive bipartisan and bicameral support, Democrats have pressed tech platforms throughout the election cycle to apply more fact-checks on medical misinformation and misleading election content and have shrugged at accusations of bias.
Several other bills reforming Section 230 have been introduced or are in the works. Graham introduced a separate bill, the EARN IT Act, with Sen. Richard Blumenthal, D-Conn., which would tie the liability protections to efforts to report child sexual abuse material. Industry critics claimed the bill would undermine encryption that protects users’ privacy, but the bill passed in the Judiciary Committee with a unanimous vote in July with amendments that watered down, but failed to eliminate, some of their concerns.