Postal Service to get $10B virus-aid loan

Trade-off is data on agency’s largest private-sector contracts such as Amazon

The Treasury Department agreed Wednesday to lend the U.S. Postal Service $10 billion in emergency coronavirus relief funding in exchange for proprietary information about the mail service’s most lucrative private-sector contracts.

The Postal Service, subject to confidentiality restrictions, will provide the Treasury Department copies of its 10 largest “negotiated service agreements,” or contracts with high-volume third-party shippers such as Amazon, FedEx and UPS, and receive a crucial injection of cash that postal officials say will keep the debt-laden agency solvent for at least another year, according to a copy of the loan’s term sheet obtained by The Washington Post.

The Postal Service contracts with private-sector shippers for “last-mile” delivery from distribution centers to consumers’ homes, and it offers those firms small discounts because of the volume of packages they provide.

(Amazon founder and chief executive Jeff Bezos owns the Post.)

President Donald Trump has derided the agency over those deals, which industry experts say account for only marginal cost savings, calling the Postal Service Amazon’s “delivery boy” and falsely claiming the agreements are the reason the agency has struggled financially.

Trump in April called the Postal Service “a joke” and said he would not approve any emergency funding for the agency unless it quadrupled package prices, a move postal financial experts say would quickly bankrupt the agency by chasing customers away to private-sector competitors.

Treasury Secretary Steven Mnuchin had previously sought to leverage the loan, attached to an early round of coronavirus relief spending, in exchange for sweeping operational control of the Postal Service.

The requests turned the Postal Service, typically an independent agency, into a political football as the possibility of an election in November conducted largely through the mail grew more likely.

The Treasury Department, even before agreeing to the loan, achieved most of its desired terms. The Postal Service’s governing board in June installed a new postmaster general, Louis DeJoy, who was a major Trump booster and GOP fundraiser. The Postal Service also sought an outside firm to evaluate its largest service contracts, with the aim, expert say, of justifying a package-rate increase.

Postal advocates said Wednesday that they worried the terms requiring the Postal Service to disclose the contents of the service agreements would open the door to high parcel rates.