With his well-tweeted animosity toward Amazon and Jeff Bezos as a backdrop, President Trump has twice pushed Postmaster General Megan Brennan to double the rate the U.S. Postal Service charges the ecommerce giant and other major shippers, the Washington Post has reported.
Brennan has thus far resisted the demands, the Post reported, noting how the rates are contractually set and any changes would have to be reviewed and approved by the Postal Regulatory Commission. If put into effect, the changes would cost the companies billions in additional delivery charges.
Trump continues to push against Brennan, the report stated, which led him last month to issue an executive order calling for a review of the USPS’s business, particularly rates it charges Amazon and other major shippers. Many observers saw personal animus toward Amazon in the order, partly due to Bezos’s ownership of the Post, which is often critical of the president and his policies.
Some observers agree with Trump that Amazon is getting a sweetheart deal with the USPS, arguing in effect it subsidizes its business with the company in return for significant volume. However, the USPS is mandated by law to have revenue from any contract cover its costs, the details of which are secret.
Amazon spent $21.7 billion on shipping in 2017, including sorting, distribution and transportation charges. Analysts estimate the USPS delivers about 40% of Amazon’s packages.
This week, the USPS reported shipping and package income of $19.5 billion in 2017, up 11.8% from 2016, while posting a $1.3 billion loss. The loss is due largely to the albatross of prefunded pension obligations mandated in the 2006 Postal Reform Act, as well as plummeting mail volumes.
Also this week, Amazon was conspicuously absent from a group of 10 public-private drone test projects that were approved by the U.S. Department of Transportation – including one involving Google’s Project Wing – despite the maturity of its program. Amazon wanted to test drone delivery of online orders in New York City. DOT Secretary Elaine Chao encouraged Amazon and others to continue to work with the government.
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