President Donald Trump keeps slamming Amazon and the United States Postal Service.
On Thursday, Trump ordered the creation of a task force to study the USPS and its financial difficulties.
Trump previously tweeted that Amazon was “costing the United States Post Office massive amounts of money for being their Delivery Boy.”
An increase in package deliveries due to e-commerce is one of the brightest points in the USPS’ troubled financials — and Amazon is partly to thank for that.
However, the agency may be undercharging customers, including Amazon, to ship packages, something Citi estimates could be saving the e-commerce giant up to $2.6 billion.
President Donald Trump can’t stop slamming the United States Postal Service as he feuds with Amazon.
On Thursday, Trump ordered the creation of a task force to investigate the USPS and its “unsustainable financial path.” Trump’s order stated that the USPS had lost $65 billion since the Great Recession and needed to be “restructured to prevent a taxpayer-funded bailout.”
The order follows weeks of criticism of the USPS — and specifically, its deal with Amazon.
“Only fools, or worse, are saying that our money losing Post Office makes money with Amazon,” Trump tweeted earlier in April. “THEY LOSE A FORTUNE, and this will be changed. Also, our fully tax paying retailers are closing stores all over the country…not a level playing field!”
Trump doubled down with another tweet, saying Amazon is “costing the United States Post Office massive amounts of money for being their Delivery Boy.”
“Amazon should pay these costs (plus) and not have them bourne by the American Taxpayer,” he said. “Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!”
I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy. Amazon should pay these costs (plus) and not have them bourne by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!
— Donald J. Trump (@realDonaldTrump) April 3, 2018
And when asked about the issue by reporters, Trump said, “Amazon has the money to pay the fair rate at the post office, which would be much more than they’re paying right now.”
It’s true that because of the rise of e-commerce and some retailers’ subsequent struggles, stores have been closing across the US. And it’s true that in February, the Postal Service posted a net loss of $540 million in the first quarter.
What is more complicated is whether Amazon is to blame.
“Trump is trying to say that Amazon is the reason the post office is losing millions of dollars,” Logan Purk, an analyst at Edward Jones, told Business Insider. “And in reality, that’s not the case.”
But there is plenty of evidence that the Postal Service’s business model is unsustainable — and that Amazon is profiting because of that.
Amazon is giving the Postal Service a lifeline
The USPS is in rough shape.
Last year, it reported a net loss of $2.7 billion on …read more
Source:: Business Insider