USPS Eyes Hikes To Last-Mile Package Delivery Fees

The United States Postal Service (USPS) has been around for more than two centuries, but it could deliver its last piece of mail later this year as it might run out of money by the fall or raise prices so high customers will go elsewhere.

The Washington Post reported that USPS has been considering its package delivery contracts, seeking bids from consulting firms to reassess how much it charges companies like UPS, FedEx and Amazon to deliver packages in the "last mile" of their journeys.

President Donald Trump has said USPS isn’t charging these companies enough. Last month, he threatened to withhold a $10 billion line of credit for the agency that was approved by Congress in the COVID-19 stimulus package unless USPS quadruples its package delivery prices

“The Postal Service is a joke because they’re handing out packages for Amazon and other internet companies, and every time they bring a package, they lose money on it,” Trump told reporters in the Oval Office, according to a separate report by The Washington Post.

But higher rates could cause shippers billions of dollars and might prompt them to look elsewhere for delivery. The Post cited independent analysts who said that increasing rates would destroy USPS, which relies on these types of deliveries for a fast-growing portion of its business.

The agency has said its fees are competitively priced.

USPS executives have told lawmakers they expect the agency to lose $13 billion this year because of decreasing mail volume due to the pandemic, according to the Post.

House Speaker Nancy Pelosi has introduced a measure that would forbid the Treasury from attaching conditions to the loan.

Last week, Louis DeJoy, the finance chairman of the 2020 Republican National Convention, and a Trump ally, was named postmaster general. His selection was led by Treasury Secretary Steven Mnuchin, the Post reported. The administration could insist on raising package mailing prices in exchange for emergency funding for the agency, which leaders say could run out of money by October.



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