Trump, USPS and Amazon: What can be done?

14 April, 2018, 20:19 | Author: Julian Harrison
  • Post Office mailman with a friendly dog

"It shall be the policy of my administration that the United States postal system operate under a sustainable business model to provide necessary mail services to citizens and businesses, and to compete fairly in commercial markets."

In his previous tweets, Trump has insisted that the Postal Service is losing money on the package deliveries it handles for Amazon.

First among the issues the commission is to address is "the expansion and pricing of the package delivery market and the USPS's role in competitive markets".

From there, Trump assigns a new task force to dig into the U.S.P.S. and do their thing within 120 days. "The USPS is on an unsustainable financial path and must be restructured to prevent a taxpayer-funded bailout".

It's a decision that came after the president's renewed attack on Amazon on March 31 when he tweeted: "It is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon".

While the terms of the contract remain confidential, the Postal Service has indicated that the pact with Amazon is profitable and points out that it's legally prohibited from delivering packages at rates below its delivery costs.




Amazon is the frequent target of Trump's ire: In the past, he has accused Amazon of harming retailers and having "a huge anti-trust problem".

The federal government will be taking a closer look at the U.S. Postal Service's finances. Revenue from packages grew by more than $2 billion from the prior year, by far the most of any service category.

A White House official said the presidential order was meant to come up with solutions to the problems at the Postal Service. But the USPS is still most likely undercharging businesses - not just Amazon - to ship packages.

The Postal Service says the law requires that such negotiated contracts must cover the Postal Service's costs and that postal regulators have studied the contract and approved it. "That amounts to Billions of Dollars".

Those gains, however, are not enough to offset declines in its mail business, its "main source of revenue and contribution". The task force will also review how the decline in mail volume is affecting the USPS, along with its work force and operations. Those obligations for current and past employees stood at $38 billion at the end of its most recent fiscal year. That appears to be working out for USPS, which said the growth in its package business was "a result of our successful efforts to compete in the ground shipping services and "last mile" e-commerce fulfillment markets, including Sunday delivery", in another financial report a year ago.

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