Is Trump's 'Task Force' Targeting USPS Relationship With Amazon?

Proposed Postal Service reforms could hike package delivery costs

Proposed Postal Service reforms could hike package delivery costs

Postmaster General Megan Brennan said in a statement that the focus needs to be on achieving the legislative and regulatory reforms that are urgently needed to reduce costs and allow the Postal Service to "function with greater flexibility to adapt to a dynamic marketplace". During the 2018 fiscal year, the Postal Service recorded a net loss of $3.9 billion, which is an increase of more than $1 billion over the losses it suffered in 2017. But Amazon and its CEO, Jeff Bezos, have been frequent targets of Trump's attacks, with the president widely seen as targeting the company because Bezos owns The Washington Post, which has reported critically on the president.

Amazon announced that customers bought more products during this year's "Cyber Monday" than any other single day in Amazon's history.

"None of our findings or recommendations relate to any one company", a senior administration official said December 4.

The Package Coalition, which includes Amazon and other online and catalog shippers, warned against any move to raise prices to deliver their packages. Trump 2020 advisory board member Harlan Z. Hill said, adding that any sale would have to abide by the Constitutional mandate that the government guarantee mail delivery. "The USPS should have the authority to charge market-based prices for both mail and package items that are not deemed 'essential services, '" the task force said in its summary. The report didn't say how much the Postal Service should increase its prices.

If so, Amazon and other e-commerce leaders could take a significant cost hit in years ahead.

"Although the USPS does have pricing flexibility within its package delivery segment, packages have not been priced with profitability in mind".

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"Only fools, or worse, are saying that our money losing Post Office makes money with Amazon", Trump tweeted in April.

Gordon Glazer, senior consultant for San Diego-based parcel consultancy Shipware LLC, noted that there appears to be a disconnect relating to the Task Force report indicating that the USPS must pursue new cost-cutting strategies that will enable it to meet the changing realities of its business model.

The administration found that the Postal Service has not accounted for a decline in mail volume and the growth in package volume in its current pricing structure.

The report also recommended the USPS restructure prepayments of employee retirement and health benefits, improve its governance, and explore new services to improve its finances.

Amazon uses the Postal Service to complete what's called the "last mile" of delivery. "Today's report contains achievable recommendations that fulfill the President's goal of placing the USPS on a path to sustainability, while protecting taxpayers from undue financial burdens and providing them with necessary mail services".

Amazon, FedEx Corp and United Parcel Service Inc did not return requests for comment.

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