Trump’s Beef With Amazon Leads To Questions About USPS

President Donald Trump hasn’t let up on Amazon, and his recent tweets are putting an unwanted spotlight on the United States Postal Service (USPS).

The president has been tweeting criticisms about the eCommerce giant for over a week, but recently turned his ire towards the USPS.

“I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy,” Trump wrote.

According to the Financial Times, the tweets have now put a spotlight on the postal service, which already has its own share of critics who believe that the agency — like Amazon — puts sales growth ahead of short-term profits.

And in a report last year, Citigroup accused the post office of essentially subsidizing Amazon, while private-sector companies such as UPS have complained that the post office undercharges Amazon to prevent itself and FedEx from getting more deliveries from online businesses.

“The post office is not doing well with Amazon, that I can tell you,” Trump also tweeted this week. “The playing field has to be level for everybody. That’s very important.”

Trump isn’t entirely correct with his assessment. As letter volumes fell from 203 billion to 154 billion between 2008 and 2016, eCommerce raised parcel volumes from 3.3 billion items to 5.2 billion over the same period.  Still, the post office has posted a net loss for the past 11 years.

In fact, the Citigroup report stated that if the post office wanted to cover its real costs, it had to raise prices, with some analysts saying it might even need to increase its fees by 50 percent. That would definitely put a dent in Amazon’s wallet, increasing its annual costs by $2.6 billion.

But Steve Hutkins, a New York University professor who runs a Save the Post Office blog, said the USPS does not need to worry about maximizing its profits. “The postal service is just trying to break even. There is no reason to produce profits. They’re just trying to stay above water.”

It remains to be seen what Trump is planning for Amazon and the USPS, but he does have some power. The post office board is currently empty and he has the authority to fill its nine vacant seats. In addition, Amazon’s contract with the post office expires this year.


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