Trump taking Amazon package rate personally
He pushes postmaster general to double charges to ship firm’s items, sources say.
WASHINGTON — President Trump has personally pushed U.S. Postmaster Gen. Megan Brennan to double the rate the Postal Service charges Amazon.com and other firms to ship packages, according to three people familiar with their conversations, a dramatic move that probably would cost these companies billions of dollars.
Brennan so far has resisted Trump’s demand, explaining in multiple conversations this year and last that these arrangements are bound by contracts and must be reviewed by a regulatory commission, the three people said. She has told the president that the Amazon relationship is beneficial for the Postal Service and gave him slides that showed the variety of companies, in addition to Amazon, that also partner for deliveries.
Despite these presentations, Trump has continued to level criticism at Amazon. And last month, his critiques culminated in the signing of an executive order mandating a government review of the financially strapped Postal Service that could lead to major changes in the way it charges Amazon and others for package delivery.
Few U.S. companies have drawn Trump’s ire as much as Amazon, which has rapidly grown to be the secondlargest U.S. company in market capitalization. For more than three years, Trump has fumed publicly and privately about the giant commerce and services company and its founder, Jeff Bezos, who is also the owner of the Washington Post.
Trump says Amazon is being subsidized by the Postal Service, and he has accused the Post of being Amazon’s “chief lobbyist” as well as a tax shelter. He says Amazon uses these advantages to push bricks-andmortar companies out of business. Some administration officials say several of Trump’s attacks aimed at Amazon have come in response to articles in the Post that he didn’t like.
The three people familiar with these exchanges spoke on condition of anonymity because they were not authorized to discuss the White House’s internal deliberations.
Brennan and Trump have met at the White House about the matter several times, beginning in 2017, and most recently four months ago, the three people said. The meetings have never appeared on Trump’s public schedule. Brennan has spent her career at the Postal Service, starting 32 years ago as a letter carrier. In 2014, the Postal Service’s Board of Governors voted to appoint her as postmaster general.
Clouding the matter even further, Trump’s aides also have disagreed internally about whether Amazon is paying enough to the Postal Service, with some believing the giant commerce company should be paying more, while others believe that if it weren’t for Amazon, the Postal Service might be out of business, according to the three people.
Trump has met with at least three groups of senior advisors to discuss Amazon’s business practices, looking into issues such as whether the company pays the appropriate amount of taxes or underpays the Postal Service, according to the three people.
These groups include Treasury Secretary Steven T. Mnuchin, then-National Economic Council Director Gary Cohn and Domestic Policy Council Director Andrew Bremberg. Bremberg has served as a key liaison with Brennan.
One of Amazon’s biggest defenders within the White House was Cohn, who had told Trump that the Postal Service actually made money on the payments Amazon made for package delivery. Cohn announced his departure from the White House in March.
The White House, the Postal Service and Amazon — as well as Bezos, via an Amazon spokesman — declined to comment for this report.
While Trump has leveled a range of criticisms at Amazon, his efforts to increase the company’s shipping and delivery costs stand as the only known official action he’s taken to go after the company.
The company, meanwhile, has treaded carefully around Trump. It has dramatically expanded its spending on lobbying in the last few years, according to data from the Center for Responsive Politics, but Amazon officials have not been directly engaged with White House officials about the review, according to the three people familiar with the White House deliberations as well as others familiar with Amazon’s approach.
The company has, however, hosted more than a dozen lawmakers and governors at numerous Amazon facilities across the country to impress upon them the company’s economic footprint and job creation potential.
On March 7, when the company announced it would be building a new fulfillment center in Missouri and hiring 1,500 employees, it alerted the state’s two U.S. senators on Twitter, Democrat Claire McCaskill and Republican Roy Blunt.
Trump has berated Amazon and the Post on social media, briefly driving down Amazon’s stock price. And he has said publicly that he doesn’t believe the information he has been presented by some of his advisors and Brennan herself regarding the Postal Service’s contract with Amazon.
“I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy,” he wrote on April 3. “Amazon should pay these costs (plus) and not have them bourn by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!”
Details of Amazon’s contract with the Postal Service are secret, making it difficult for financial experts to assess claims about the relationship. Amazon has said that publicly releasing the contract, which contains detailed information on the company’s delivery systems, would give competitors an unfair advantage.
Amazon primarily uses the Postal Service for the “last mile” of its deliveries. It brings the packages to the post office closest to the final destination, and then the Postal Service takes it from there. The Postal Service says other companies also have “last-mile” agreements with it but declines to say which.
Amazon is the leading player in e-commerce but competes with other retail giants such as Walmart, Macy’s and Costco to offer fast and inexpensive delivery of products. The Postal Service competes with UPS, FedEx and others for delivery.
Amazon said it spent $21.7 billion on shipping in 2017, a figure that includes sorting, delivery center and transportation costs. Roughly 40% of its packages are delivered by the Postal Service, according to some analysts, a figure neither Amazon nor the Postal Service have confirmed. It is not known how much Amazon pays the Postal Service each year and what percentage of its items are shipped via the Postal Service.
The Postal Service, meanwhile, reported shipping and package income of $19.5 billion last year, an 11.8% increase from the year before. This increase wasn’t enough to stop the Postal Service from losing money for the 11th straight year.
That’s largely because of the continued decline in first-class mail and because of expensive health benefit costs for which the Postal Service must set aside funds for future retirees, according to data released by the agency.