Trump blames internet companies, including Amazon, for Postal Service struggles

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KEY POINTS
  • The President has previously pointed the finger at Amazon for its use of the U.S. Postal Service.
  • The federal agency had an $8.8 billion loss in its most recent fiscal year.
  • However, USPS revenue from packages has actually been growing, while other forms of revenue have been shrinking.
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President Trump said on Tuesday that internet companies, including Amazon, are to blame for the decline of the U.S. Postal Service.

The comments, which came during Tuesday’s coronavirus task force briefing at the White House, recall a series of attacks in 2018, when Trump repeatedly blamed Amazon for hurting the post office, once saying that Amazon uses the USPS as “their delivery boy.”

The comments came after a reporter asked the president about comments from Rep. Gerry Connolly, D-Va., suggesting that Trump had requested that $25 billion meant for the USPS be cut from the Coronavirus Aid, Relief and Economic Security, or CARES, act, which Trump signed into law on March 27.

“This is the new one. I’m the demise of the Postal Service,” Trump said on Wednesday. “I’ll tell you who’s the demise of the Postal Service, are these internet companies that give their stuff to the Postal Service…They drop everything in the post office and they say, ‘You deliver it.’ And if they’d raise the prices by, actually, a lot, then you’d find out that the post office could make money or break even, but they don’t do that, and I’m trying to figure out why.”

The USPS indeed reported a $8.8 billion net loss in the fiscal year that ended on September 30, 2019. However, the proportion of USPS revenues coming from shipping packages has been rising, while other revenue sources, such as first-class mail and marketing mail, are falling.

One big reason for the Post Office’s continuing shortfall, according to previous analysis by CNBC, is a requirement that the USPS prefund health benefits for its workers. Other worker-related expenses, such as workers’ compensation, fluctuate from year to year based on “changes in actuarial assumptions, such as interest and inflation rates, and employee and retiree demographics,” as the USPS said in its 2019 annual report.

The Postal Regulatory Commission oversees the USPS. Representatives of Amazon, the PRC and the USPS did not immediately respond to requests for comment.

Meanwhile, Amazon has protested the award of a major defense contract to a rival, blaming Trump for the loss.

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