US POTUS Donald Trump tweeted out that Amazon should pay ‘MUCH MORE’ to ship packages, as the US President claims that the current status quo makes Jeff Bezos’ Amazon richer while the US Postal Service loses money.
The feud between Trump and billionaire globalist Bezos has been on consistently shaky ground considering the Amazon CEO also owns anti-Trump news outlet The Washington Post.
‘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?’ the president asked on Twitter.
‘Should be charging MUCH MORE!’
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!
— Donald J. Trump (@realDonaldTrump) December 29, 2017
Via The Daily Mail…
The USPS has posted losses for 11 straight years, largely on the basis of gigantic legacy pension and health care costs.
And while online shopping has led to growth in its package-delivery business, fewer Americans send letters via first-class mail every year.
Federal regulators moved recently to allow bigger jumps to stamp prices beyond the rate of inflation, which could eventually increase companies’ shipping rates.
Amazon, on the other hand, has the markings of an unstoppable juggernaut – and one analysis shows that the Postal Service is giving it a free ride.
An April report from Citigroup found that the fast pace of change in the shipping business has left the USPS struggling to allocate its expenses correctly.
Bureaucrats have fixed the share of infrastructure costs associated with packages at a 5.5 per cent, but package shipments now make up 25 per cent of the USPS’s business.
Factoring in the actual expenses associated with delivering more packages than their price model allows for, boxes should cost postal customers $1.46 more than they do, on average – building the equivalent of a government subsidy into the final price.
‘It is as if every Amazon box comes with a dollar or two stapled to the packing slip — a gift card from Uncle Sam,’ a Wall Street Journal commentator wrote in June.
Amazon acquired Whole Foods Markets in August, pushing its third-quarter revenue to $43.7 billion.
Amazon’s stock price has jumped by 23 per cent in the past 90 days.
Yet the company continues to see shipping as a loss-leader, reporting that it lost $7.2 billion shipping packages in 2016.
Customers can receive free two-day shipping on most items by paying for a $99 annual ‘Prime’ membership. Some of those packages arrive via USPS but many are sent through UPS and FedEx.
Even with the cost of shipping, Amazon posted an overall profit of $2.4 billion in 2016, up from $596 million a year earlier.