- President Trump again accused Amazon of profiting from the US postal service, challenging the company to “build its own post office” at a press conference on Friday.
- Trump has often complained that Amazon and other online retailers are taking advantage of USPS at lower-than-market shipping rates.
- The president said he plans to use $ 10 billion in coronavirus emergency aid as leverage to exert more control over the cash-strapped USPS, suggesting it should quadruple its prices.
- Logistics experts have said that Amazon benefits significantly from the USPS, but higher rates could also make it harder for the postal service to compete with shipping companies, which hurts its long-term financial position.
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On Friday, President Donald Trump revised his claim that Amazon is responsible for the financial challenges of the US postal service at a press conference and suggested that the USPS should let the company manage its own shipments.
“If they raise the price of a package as they should – four or five times, it should be – or they let Amazon build their own post office, which would be impossible to do because the post office is huge and serves every little piece of the country … it would be a whole new ball game, “said Trump.
Trump has repeatedly accused Amazon, as well as other online retailers, of contributing to the financial difficulties of USPS by receiving below-parcel delivery rates – effectively arguing that the USPS is unfairly subsidizing shipping costs for the 1.2 trillion dollar company.
In 2018, the USPS was approaching cumulative losses of nearly $ 70 billion, and last month, a group of Democratic lawmakers said the coronavirus epidemic could close the USPS by June.
At a press conference on Friday, Trump confirmed on Thursday a Washington Post report that his administration plans to use an emergency loan included in the $ 2 trillion coronavirus rescue program as leverage to force the Cash-strapped US postal service to make massive changes to its structure and management.
“If they don’t raise the price, I don’t sign anything,” said Trump, referring to the emergency loan, which must first be approved by the Treasury Department.
Trump’s criticisms of Amazon’s relationship with USPS are not new, and he has suggested for years that USPS has been increasing the rates charged for delivering packages to the company in order to recoup its losses.
“Why is the US post office, which loses several billion dollars a year, while charging Amazon and others so little to deliver their packages, it makes Amazon richer and the post office dumber and poorer? ” Trump tweeted in December 2017.
Trump’s reasoning may have some merit: logistics analysts have said that Amazon has been able to build a transportation network, in which the company can save money by delivering its own packages, by significantly pressing USPS.
A December report from Morgan Stanley said that Amazon’s internal delivery network “picked” the densest zip codes in the United States. USPS is then responsible for delivering Amazon packages to rural areas. Maintaining rural areas, where homes are more scattered, is more expensive – and USPS is unable to recoup these losses by serving urban areas on behalf of Amazon.
The Washington Post, however, said that increasing package delivery rates could also make it more difficult for USPS to compete with Amazon and other shipping companies like UPS and FedEx, which would hurt its financial condition in the long run.
Rachel Premack and Grace Panetta contributed to the reporting on this story.