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Donald Trump

Donald Trump targets Amazon as part of demand for ‘dumb’ US post office to raise prices

PUBLISHED : Saturday, 30 December, 2017, 2:27am
UPDATED : Saturday, 30 December, 2017, 2:53am

US President Donald Trump reignited his long-running feud with Amazon on Friday while simultaneously calling for the US Postal Service (USPS) to raise its prices.

Trump, who has criticised the retail giant in the past, invoked Amazon parcels as an example of the costs placed on the USPS.

“Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!” Trump wrote on Twitter.

The USPS, which runs at a significant loss, is an independent agency within the federal government and does not receive tax dollars for operating expenses, according to its website.

The organisation makes up a significant portion of the US$1.4 trillion US delivery industry. Other players include private companies such as the United Parcel Service (UPS) and FedEx.

Amazon was founded by Jeff Bezos, who remains the chief executive officer of the retail company. Bezos also owns The Washington Post, a newspaper that Trump has repeatedly railed against in his criticisms of the news media.

In tweets over the past year, Trump has said the “Amazon Washington Post” fabricated stories, and has complained that Amazon does not pay a fair amount of taxes, in doing so hurting other retailers.

This comes as part of a pattern by the former businessman of periodically turning his ire on big American companies since taking office in January.

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Representatives for the White House, the US Postal Service and Amazon were not immediately available for comment.

According to the US Postal Service’s annual report, the agency lost US$2.74 billion this year, and its deficit, from when it was spun off into an independent agency in 1971, has ballooned to US$61.86 billion.

In 2016, the USPS lost US$5.59 billion and had a total deficit of US$55.98 billion.

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The organisation had projected to lose US$4.2 billion and said in its annual report that the loss this year was lower than expected primarily because of a “US$2.2 billion reduction in workers’ compensation liability.”

While the postal service’s revenue for first class mail, marketing mail and periodicals is flat or declining, the revenue from package delivery is up 44 per cent since 2014 to US$19.5 billion in the 2017 financial year that ended on September 30, the postal service said.

Amazon has shown interest in the past in shifting into its own delivery service. In 2015, the company spent US$11.5 billion on shipping, 46 per cent of its total operating expenses that year.

In October, a report said Amazon was testing its own delivery service to move products more quickly out of its overcrowded warehouses and make more of them available for free two-day delivery.

However, Amazon said at the time that it was using the same carrier partners to offer the programme as it has used for years, including the US Postal Service, UPS and FedEx.