President Trump has just resumed his continued series of critical sideswipes towards billionaire Jeff Bezos and his online retail giant Amazon. Trump suggested Bezos is getting too sweet a deal with the United States Post office and said the USPS “should be charging much more” because the post office is losing billions a year.
The president tweeted on Friday : “Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging much more”
The United States Post Office has lost $62 billion over the last 11 years of operation mainly due to payouts on legacy pensions, health insurance, and a rapidly declining amount of letters being sent by first class mail.
The exact details of any negotiation between the USPS and Amazon are not public. However, because of Amazon’s vast network of resources they are able to “tip the scales to their advantage”, as described by a Wall Street Journal commentator in July. Amazon drops off mass shipments to postal depots from their 20 or so “sort centers”. The packages are sorted by zip code and dropped off to post offices as close as possible to the package’s destination in a process that is called “last mile” delivery.
Bloomberg estimates that 40% of Amazon’s shipping is done via the post office and on average they are paying $2 a shipment. A Citigroup analysis from April estimated that each package should cost around $1.46 more. Citigroup estimated that a rate increase would cost Amazon $2.6 billion a year. However, Amazon has been developing their own shipping system and would not necessarily have to continue delivering via USPS in a large capacity if postal prices were increased.
President Trump has criticized Amazon previously in August when he tweeted: “Amazon is doing great damage to tax paying retailers. Towns, cities and states throughout the U.S. are being hurt–many jobs being lost!”. A temporary dip in Amazon stock price immediately occurred after those remarks.
Trump has also been critical of the Jeff Bezos owned Washington Post. In Early December Trump called for WaPo reporter David Weigel to resign after he posted a photo online of Trump’s appearance in Pensacola showing a half empty venue. After Trump tweeted that it was “a phony photo of an empty arena hours before I arrived at the venue, w/ thousands of people outside and on their way in”, Weigel apologized and removed the photo.
By: Jared Evan