Trump attacks Amazon over postal delivery
President claims Bezos newspaper assists in ‘scam’
President Donald Trump charged Saturday that The Washington Post, owned by billionaire Jeff Bezos, should register as a lobbyist, insinuating that it abetted his other company, Amazon, in pulling off a U.S. Postal Service “scam” to deliver its packages at a loss.
From his Easter weekend retreat in Mar-a-Lago, the president laid out his case in two tightly packed morning tweets.
Trump’s initial charge, which he has raised before, is that Amazon is part of a “scam” because, he claims, the post office loses $1.50 for every Amazon package it delivers. He then suggests that the scheme is protected through billions of dollars spent by Amazon on lobbyists.
Then, without noting that The Washington Post and Amazon are separate companies, Trump says Amazon’s huge lobbying effort “does not include the Fake Washington Post, which is used as a ‘lobbyist’ and should so REGISTER.”
The president does not elaborate on the Post’s alleged role nor mention that the newspaper has aggressively covered his administration.
While Trump says only that “it is reported” that Amazon packages are a money-loser for the Postal Service, he apparently is referring to an analysis by Citigroup last April that was later cited in a Wall Street Journal op-ed column.
The charge is that the Postal Service loses $1.46 for each package it delivers for Amazon. It fails to note, however, that the figure includes the Postal Service’s huge annual losses due to the accrual of almost $6 billion in unpaid mandatory retiree health payments. The USPS inherited these obligations when it was established as an independent agency in 1971.
The chief financial officer of the Postal Service, Joseph Corbett, writing in PostalReporter.com last year, noted that the post office is required by law to charge retailers at least enough to cover its delivery costs.
“By law our competitive package products, including those that we deliver for Amazon, must cover their costs,” he added. “Our regulator, the Postal Regulatory Commission (PRC), looks carefully at this question every year and has determined that they do. The PRC has also noted that competitive products help fund the infrastructure of the Postal Service.”
In July, Amazon told Fortune Magazine that the PRC, which oversees the Postal Service, “has consistently found that Amazon’s contracts with USPS are profitable.”
Ironically, Amazon could hurt the post office – and other package companies – if it successfully shifts more of its delivery to its own delivery network, which it’s been slowly doing over the past few years.
But with that network in its early stages, it’s a paying customer of the post office.
“Amazon has been a huge cash flow generating machine for the U.S. Postal Service given the scale and scope of the company’s global distribution,” said Daniel Ives, chief strategy officer and head of technology research for GBH Insights.
As for Trump’s charge, reiterated Saturday, that Amazon does not pay taxes, Amazon and other big e-commerce companies routinely collect sales taxes from the 45 states that have them.