Is Amazon really ripping off the US Postal Service?

Trump went after the online retailer on Twitter, saying USPS “should be charging MUCH MORE” to deliver packages.

By Jen Kirbyjen.kirby@vox.com  Dec 29, 2017, 5:40pm EST

Donald Trump went after the US Postal Service on Friday, claiming that the mail carrier is “losing many billions a year” charging low package rates, “making Amazon richer” and the Postal Service “dumber and poorer.”

Donald J. Trump
?
@realDonaldTrump
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!
8:04 AM - Dec 29, 2017
 36,109 36,109 Replies   25,467 25,467 Retweets   107,488 107,488 likes

It is not clear, exactly, what prompted Trump’s tirade Friday morning. It might be the general package-heavy Christmas season, or it might have to do with a Washington Post story detailing the White House’s worries for 2018. Amazon’s Jeff Bezos owns the Post, and its critical coverage of the president has inspired his ire before.

Donald J. Trump
?
@realDonaldTrump
The #AmazonWashingtonPost, sometimes referred to as the guardian of Amazon not paying internet taxes (which they should) is FAKE NEWS!
8:06 AM - Jun 28, 2017
 29,697 29,697 Replies   13,184 13,184 Retweets   53,162 53,162 likes

Amazon’s stock took a slight dip after Trump’s tweet, which also suggested the Postal Service should be charging “MUCH MORE.”

But is Trump right that Amazon is ripping off the Postal Service? The question of whether it should or could charge more is complicated. The Postal Service does lose billions each year, and has for the past decade. And it’s likely that Amazon gets a good deal, given that it ships millions of boxes a year.

But the Postal Service’s problems are deeper than just delivering packages. Larger institutional problems in the age of email and two-hour delivery are really to blame — but also much, much harder to fix.

The Postal Service bleeding money — but its parcel services are doing okay

The US Postal Service’s financial woes are, by now, well-documented: In November 2017, the Postal Service made a net loss of $2.7 billion. Magnified over decades, that figure represents a cumulative net loss of more than $63 billion since 2007. That is “many billions of dollars.”

But break down the losses, and the situation is a bit more nuanced. Delivering packages, it turns out, is a growth business, and it actually makes the Postal Service money: The revenue from package increased $2.1 billion, and was up 11.8 percent for fiscal year 2017. The problem is the revenue from first-class mail — still the biggest source of the USPS’s revenue — is declining.

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https://www.vox.com/2017/12/29/16830128/amazon-trump-twitter-postal-service-feud