Trump Keeps Heat on Amazon Over Postal Deal
President Donald Trump continued his campaign against Amazon.com on April 3, again claiming the company is costing tax payers billions of dollars through a special deal with the U.S. Postal Service.
Amazon pared gains April 3 after Trump’s latest tweet. The stock fell more than 5% on April 2 after Trump and a Republican senator took aim at the Seattle-based company.
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“I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy,” Trump said on Twitter. “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?)!”
There’s no evidence that the president is correct.
While its contract with Amazon is confidential, the Postal Service has argued that its e-commerce services benefit the organization and its mail customers. It is legally prohibited from charging shippers less than its delivery costs.
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Trump has been unrelenting in his criticism of Amazon in the past several days, on subjects from the Postal Service to taxes and retailing. In a pair of Twitter messages March 31, Trump said Amazon “must pay real costs (and taxes) now!”
Amazon regularly uses the USPS to complete what’s called the “last mile” of delivery, with letter carriers dropping off packages at some 150 million residences and businesses daily. It has a network of more than 20 “sort centers” where customer packages are sorted by ZIP code, stacked on pallets and delivered to post offices for the final leg of delivery.
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 postal service $2 per package, which is about half what it would pay publicly traded UPS Inc. and FedEx Corp.
UPS ranks No. 1 and FedEx No. 2 on the Transport Topics Top 100 list of the largest North American for-hire carriers.
