Trump Says Amazon Is Getting ‘Richer’ and the Post Office ‘Dumber and Poorer’ Off Low Delivery Rates
President Donald Trump said Friday the U.S. Postal Service should charge Amazon (AMZN) more to deliver packages, the latest in a series of public criticisms of the online retailer. The company’s stock opened nearly 1% lower.
The post office “should be charging MUCH MORE” for package delivery, the president tweeted from his Mar-a-Lago estate in Florida, where he’s been spending the holidays.
“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?” Trump told his 45 million followers.
Trump regularly criticizes Amazon and its chief executive officer, Jeff Bezos, who also owns the Washington Post newspaper and is currently the world’s richest man. In August, Trump accused the company of causing “great damage to tax paying retailers,” even though the internet giant began collecting sales tax on products it sells directly in April.
As with prior missives targeting the company, Trump’s message appeared to concern investors. Amazon stock was positive in premarket trading on Friday but opened down as much as 0.64% after Trump’s post to Twitter. It was down 0.4% at about 9:45 a.m. in New York.
Amazon regularly uses the U.S. Postal Service to complete what’s called the “last mile” of delivery, with letter carriers dropping off packages at some 150 million residences and businesses daily.
While full details of the agreement between Amazon and the Postal Service are unknown—the mail service is independently operated and strikes confidential deals with retailers—David Vernon, an analyst at Bernstein Research who tracks the shipping industry, estimated in 2015 that the USPS handled 40% of Amazon’s volume the previous year. He estimated at the time that Amazon pays the USPS $2 per package, which is about half what it would pay United Parcel Service (UPS) and Fedex (FDX).
Both shippers were up less than 1% in early trading.
The Postal Service reported a net loss of $2.1 billion in the third quarter of 2017, and has $15 billion in outstanding debt. The service has lost $62 billion over the last decade.
USPS’s chief financial officer, Joseph Corbett, wrote in a post for PostalReporter.com in August that the service is required by law to charge retailers at least enough to cover its delivery costs.
“The reason we continue to attract e-commerce customers and business partners is because our customers see the value of our predictable service, enhanced visibility, and competitive pricing,” he wrote.
He said Congress should pass provisions of legislation introduced last year by former Representative Jason Chaffetz, a Utah Republican, that would allow the postal service to raise some rates and discontinue direct delivery to business customers’ doors.
Amazon has been experimenting with a new delivery service of its own that is expected to see a broader roll-out in the coming year. Under the program, Amazon would oversee the pickup of packages from warehouses of third-party merchants and the delivery to home addresses.