The US Postal Service should have the flexibility to raise shipping rates for certain packages, according to sweeping reforms recommended by a Trump administration task force, a move that would increase costs for Amazon and other internet retailers.
President Donald Trump ordered an evaluation of the US Postal Service’s finances in April, after weeks of accusing Amazon of not paying its fair share of postage. The Postal Service reported a loss of $3.9 billion for its 2018 fiscal year, which ended Sept. 30 — the 12th straight year the service has reported a financial loss.
Trump has repeatedly accused Amazon of taking advantage of its delivery partnership with the US Postal Service, with taxpayers shouldering the costs. Earlier this year, in comments to the press, Trump said, “Amazon is going to have to pay much more money to the post office. There’s no doubt about that.”
The task force blamed the decline in revenue on the rising popularity of digital alternatives to traditional letters and bills delivered by the Postal Service.
“Although the USPS does have pricing flexibility within its package delivery segment, packages have not been priced with profitability in mind. The USPS should have the authority to charge market-based prices for both mail and package items that are not deemed ‘essential services,'” the task force said in its report (PDF).
The task force also recommended the Postal Service pursue cost-cutting strategies to address rising labor and operating costs, and have greater flexibility in determining delivery frequency. It also suggested restructuring $43 billion in prefunding payments that the Postal Service didn’t make to the Postal Service Retiree Health Benefits Fund.
The US postmaster general said the Postal Service is reviewing the task force’s recommendations.
“The recommendations contained in the report should be evaluated together with legislative and regulatory reforms to address our urgent financial challenges,” US Postmaster General Megan J. Brennan said in a statement. “Reforms are necessary to enable the Postal Service to further reduce costs, grow revenue, compete more effectively, function with greater flexibility to adapt to a dynamic marketplace and to prudently invest in our future.”
Amazon is one of the USPS’ biggest single customers, prompting the agency to offer specialized services. But Amazon and its CEO, Jeff Bezos, have been frequent targets of Trump’s attacks, with the president widely seen as targeting the company because Bezos owns The Washington Post, which has reported critically on the president.