President Trump has reportedly lobbied U.S. Postmaster General Megan Brennan to raise the rates the U.S. Postal Service charges Amazon.com to ship its packages. The President reportedly pushed for rates to as much as double for Amazon, along with other firms. The move could have cost the firms as much as billions.
The rates the U.S. Postal Service charges Amazon, along with the other companies, are determined by contracts and must be reviewed by a commission made up of regulators. Brennan has reportedly told the President this and has also communicated to him that the relationship Amazon has with the service is beneficial.
Fact check organizations have concluded the U.S. Postal Service does not lose a fortune on Amazon deliveries in particular, as Mr. Trump has claimed in the past. According to PolitiFact, the Postal Service made about $19.5 billion last year. Deals with private shippers like Amazon accounted for $7 billion of that. The USPS does not disclose the value of private contracts with private firms, but Amazon is by far the biggest e-commerce customer the Postal Service has.
While it’s true that the USPS does lose a fortune ($2.7 billion in 2017 and an astounding $65.1 billion since 2007), much of those losses stem from healthcare costs and a 2006 law passed requiring the service to pre-fund them for future retirees.
These facts have not been enough to quell the President’s criticisms, with Mr. Trump signing an executive order mandating a government review of the USPS that could lead to changes in the way it charges private shippers like Amazon, last month.
“Only fools, or worse, are saying that our money losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed. Also, our fully tax paying retailers are closing stores all over the country…not a level playing field!” the President has tweeted.
Amazon mainly uses the USPS for what’s called the “last mile” of deliveries: It drops packages off at the nearest location to their final destination and the USPS takes them the rest of the way. Other firms also have “last mile” contracts with the Postal Service but the USPS has declined to name them.
President Trump and Amazon’s CEO Jeff Bezos have had a contentious interactions in the past. Mr. Trump accused Bezos of using The Washington Post, which Bezos owns, as a tax shelter to help Amazon avoid paying taxes.
“Finally trashed by @realDonaldTrump. Will still reserve him a seat on the Blue Origin rocket. #sendDonaldtospace,” Bezos, responded in a tweet in December 2015.
This angered Trump who, at the time, who was trying to appear as a credible candidate in the Republican presidential primaries.