President Donald Trump personally urged U.S. Postmaster General Megan Brennan to double how much the U.S. Postal Service charges Amazon and other companies to ship packages, according to a report by The Washington Post.
The Post reports that Brennan has told Trump that rates are set through contracts and the only way to change them is through a regulatory commission. A major change in rates could cost Amazon and other companies that ship packages billions.
USPS has been in dire financial straits in recent years, but package delivery is a growth area for the agency. Package volumes grew by 11.4 percent last year, according to USPS, and documents show that package revenue contributed a net total of more than $7.1 billion to the agency’s bottom line during fiscal year 2017.
Trump has frequently targeted Amazon in his social media blasts and policy proposals. In recent months, he has seized on Amazon’s partnership with USPS, blaming the deal for the postal service’s financial woes.
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!
— Donald J. Trump (@realDonaldTrump) December 29, 2017
Last month, Trump issued an executive order to review “expansion and pricing of the package delivery market and the USPS’s role in competitive markets” among other things. The order sets up a task force to review USPS’s finances and operations and report back to the president.
Amazon relies on USPS for many of its last-mile deliveries and in 2013, the two struck a landmark deal to deliver packages on Sundays. That appears to be working out for USPS, which said the growth in its package business was “a result of our successful efforts to compete in the ground shipping services and ‘last mile’ e-commerce fulfillment markets, including Sunday delivery,” in another financial report last year.
USPS has relationships with other companies that provide logistical support necessary for shipping packages like sorting. Discounts are not publicly available but an independent agency reviews them to make sure the price concessions for Amazon or another company don’t exceed the money the postal service saves when a company helps out with some of the logistical work required to ship packages.