It has been reported that Donald Trump, President of the United States, put pressure on the Postmaster General to double the charges applied to Amazon by the national postal service. It is well known that Trump has been vocal in his criticism of Amazon and his belief that USPS is effectively subsidising the ecommerce firm.
It’s the latest report in the ongoing saga of Trump’s largely Twitter based war on Amazon. Not only does he criticise Amazon founder and CEO Jeff Bezos but he thinks the ecommerce giant is a material threat to American small businesses. He said in April on Twitter:
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 Trump, President of the United States of America
Sources for the Washington Post say that President Trump personally pressured U.S. Postmaster General Megan Brennan to double the rates for postage that it charges to Amazon and other companies to ship packages. Brennan is believed to have resisted the pressure and is said to have explained to POTUS that all such arrangements are made under contract and would need to be reviewed by the regulatory commission. Brennan apparently also explained that the relationship with Amazon in general is beneficial for USPS.
It is thought that Amazon spent $21.7B on shipping in 2017 and that includes sorting, delivery and fulfilment centre costs and transport charges. And analysts believe that the United States Postal Service delivers roughly 40% of Amazon packages in the USA. So it is very clear that Amazon represents a significant chunk of the USPS business. USPS reported shipping and package income of $19.5B last year (up 12% year on year) but did also lose money largely due to a decline in first-class mail volumes.