Trump orders Postal Service audit after taking dig at Amazon

Trump orders Postal Service audit after taking dig at Amazon

The president issued an executive order after hours last night, aimed at evaluating the U.S. Postal Service.

President Donald Trump's new executive order asking for an evaluation of the United States Postal Service doesn't name Amazon, but a CNBC analyst called it a "shot across the bow" at the Seattle-based online retail giant. Much of that anger appears to be directed at founder Jeff Bezos, who also happens to own The Washington Post, a paper that hasn't always painted the president in flattering light.

But Amazon is probably helping, not killing, the USPS: A Citigroup analysis previous year reportedly said that Postal Service prices would have to be increased by $1.46 per package in 2017, $1.41 in 2018 and $1.31 in 2019 to reflect the true costs of delivery and close its revenue shortfall. The special commission is expected to submit a report on its findings and recommendations within 120 days. "The U.S.P.S.is on an unsustainable financial path and must be restructured to prevent a taxpayer-funded bailout".

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Amazon largely uses the USPS, which has low fixed rates and a mandate to deliver mail to all Americans, for its so-called last-mile delivery - sorted packages are dropped off at a post office to be delivered to customers' homes along postal workers' usual routes.

Amazon is the frequent target of Trump's ire: In the past, he has accused Amazon of harming retailers and having "a huge anti-trust problem". But package delivery is actually a rare growth area for the service.

Whether or not Amazon spurred the government audit, Schulman says its analysis of the Postal Service should be conducted as a part of routine business. The obsession isn't shared by aides: despite Trump's repeated claims, his own advisers have said that the sheer volume of packages Amazon ships through the Postal Service has helped keep it afloat. The USPS says that it is legally prohibited from charging Amazon and other shippers less than its delivery service costs, and that regulators have repeatedly examined and approved the Amazon deal. One former White House official said Trump looks at the Post the same way he looks at The National Enquirer. Another potential opportunity for hurting Amazon: giving a multi-billion-dollar Defense Department cloud-computing contract to a competitor, as some of the president's advisers have encouraged him to do.

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The Postal Service issued a statement Friday welcoming the task force.

Still, the demand hasn't been enough to offset its growing costs. Package volumes grew by 11.4 percent last year, according to USPS and documents show that package revenue contributed a net total of more than $7.1 billion to the agency's bottom line during fiscal year 2017.

The agency is also drowning in "higher than normal" costs of retiree benefits, including pensions and health care.

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