Postal Service reviews contracts
Package delivery fees scrutinized
WASHINGTON — Weeks before a Republican donor and top White House ally becomes postmaster general, the U.S. Postal Service has launched a review of its package delivery contracts and lost its last senior official who was not appointed by President Donald Trump.
The moves, confirmed by six people with knowledge of the Postal Service’s inner workings but not authorized to speak publicly, underscore how Trump is moving closer to reshaping an independent agency he has dubbed “a joke.”
The Postal Service in recent weeks has sought bids from consulting firms to reassess what the agency charges companies such as Amazon, UPS and FedEx to deliver products on their behalf — often in the “last mile” between a post office and a customer’s home. Higher package rates would cost shippers and online retailers billions of dollars, potentially spurring them to invest in their own distribution networks instead of relying on the Postal Service.
Trump for years has alleged, without evidence, that the Postal Service is undercharging companies,
particularly Amazon (whose founder and chief executive, Jeff Bezos, owns The Washington Post). The agency has steadfastly rejected that assessment, saying it charges what it can given a competitive marketplace.
The Postal Service and White House declined to comment.
Trump has recently threatened to withhold a $10 billion line of credit approved by Congress in a coronavirus stimulus package unless the Postal Service quadruples what it charges to deliver packages. Independent analysts warn that such a change would devastate the agency, which increasingly has relied on such deliveries for a fast-growing portion of its business.
But recent developments show Trump’s efforts to reshape
the Postal Service are gaining traction. Every member of the agency’s bipartisan governing board is a Trump appointee. Democratic Vice Chairman David Williams resigned April 30. The postmaster general and deputy postmaster general also sit on the board, but do not vote on postal rates or personnel matters.
And last week the panel announced it has tapped Louis DeJoy, the finance chairman of the 2020 Republican National Convention, as the new postmaster general. DeJoy did not respond to a request for comment.
Also, Deputy Postmaster General Ronald Stroman announced his resignation on May 8. Stroman had years of experience working with congressional Democrats and had become the agency point man on vote-by-mail initiatives for the November election.
Stroman did not respond
to a request for comment.
Postal leaders have told lawmakers they expect the agency to lose $13 billion this year as the pandemic causes the volume of personal and marketing mail — on which the Postal Service makes its highest profit margin — fall by close to 20% and 45%, respectively.
Package volumes, though, have skyrocketed as a homebound nation dived into ecommerce. Packages typically constitute 5% of postal volume, but 30% of its revenue, postal experts say. During the pandemic, volume has surged 70%, propping up the agency’s finances. The Postal Service frequently contracts with shippers and internet retailers to perform “last mile” delivery, or the final leg of an item’s journey, to a customer’s home.