Trump claimed the US Postal Service “will lose $1.50 on common for every bundle it delivers for Amazon.”
President Donald Trump lit into Amazon.com for the second time in three days with a pair of Twitter messages that mentioned the web retailer “should pay actual prices (and taxes) now!”
The president on Saturday claimed, citing studies he did not specify, that the U.S. Postal Service “will lose $1.50 on common for every bundle it delivers for Amazon.” Amazon has mentioned the postal service, which has monetary issues stretching again for years, makes cash on its deliveries.
Amazon shed $53 billion in market worth on Wednesday after Axios reported that the president is “obsessed” with regulating the e-commerce big, whose founder and chief government officer, Jeff Bezos, additionally owns the Washington Submit newspaper. These losses have been pared on Thursday, the ultimate day of a shortened buying and selling week, whilst Trump tweeted that Amazon was utilizing the postal service as its “Supply Boy.”
White Home spokeswoman Lindsay Walters mentioned on Thursday that whereas the president was displeased with the e-commerce big, and significantly cases the place third-party sellers on the location did not acquire gross sales tax, there have been no administrative actions deliberate in opposition to Amazon “right now.”
Amazon.com and the Washington Submit have been common punching luggage for Trump. In July, the president mused about whether or not the newspaper was “getting used as a lobbyist weapon” to maintain Congress from wanting into Amazon’s enterprise practices. He echoed that touch upon Saturday, saying the Submit “is used as a ‘lobbyist’ and may so REGISTER.”
Trump is spending Easter Weekend at his resort in Palm Seashore, Florida, and arrived on the close by Trump Worldwide Golf Membership early Saturday, simply after the tweets have been revealed. He additionally criticized Amazon over Twitter throughout his winter trip at Mar-a-Lago, saying in December that the postal service “ought to be charging MUCH MORE for bundle supply.”
Amazon recurrently makes use of the USPS to finish what’s referred to as the “final mile” of supply, with letter carriers dropping off packages at some 150 million residences and companies every day. It has a community of greater than 20 “type facilities” the place buyer packages are sorted by zip code, stacked on pallets and delivered to publish places of work for the ultimate leg of supply.
Whereas full particulars of the settlement between Amazon and the U.S. Postal Service are unknown — the mail provider is independently operated, and strikes confidential offers with retailers — David Vernon, an analyst at Bernstein Analysis who tracks the delivery business, estimated in 2015 that the USPS dealt with 40 p.c of Amazon’s quantity the earlier yr. He estimated on the time that Amazon pays the postal service $2 per bundle, which is about half what it could pay UPS or FedEx.
A sudden enhance in postal charges would price Amazon about $2.6 billion a yr, in line with a report by Citigroup from April 2017. That report predicted United Parcel Service and FedEx would additionally increase charges in response to a postal service hike.
Citigroup additionally mentioned that the “true” price of delivery packages for the USPS is about 50 p.c increased than its present charges, main some editorial writers to conclude that Amazon was receiving the kind of subsidy cited in Trump’s Thursday tweet.
However the postal service’s losses have little to do with Amazon and extra to do with its massive health-care obligations and the dwindling use of first-class mail. The publish workplace fees a number of the world’s lowest stamp costs.
In a 2017 assertion to Fortune Journal, Amazon mentioned its partnership with the postal service was reviewed yearly by a fee that for many years had reviewed and accepted delivery contracts.”The Postal Regulatory Fee has constantly discovered that Amazon’s contracts with the USPS are worthwhile,” the corporate mentioned within the assertion. “Amazon has invested lots of of thousands and thousands of in a community of greater than 20 bundle sortation amenities that inject immediately into the USPS final mile community bypassing most of USPS community. This funding resulted in additional environment friendly processes in addition to hundreds of jobs and associated financial advantages in native communities.”
The president’s tweet additionally assumes that Amazon could be compelled to pay if the Postal Service elevated its charges for packages. However Amazon has been establishing its personal delivery operations within the U.S. and elsewhere on the planet to attenuate prices.
Beneath a brand new service being rolled out this yr, Amazon would oversee the pickup of packages from warehouses of third-party retailers and supply to dwelling addresses.