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Trump's Amazon battle continues, as postal task force recommends changes

Trump has repeatedly attacked Amazon on Twitter for treating the Postal Service as its "delivery boy."
/ Source: Reuters

WASHINGTON — The United States Postal Service should have more flexibility to raise rates for packages, according to a task force created following criticism by President Donald Trump that it provides too much service to for too little money.

The task force, which was created in April, was asked to make recommendations on how the U.S. Postal Service, an independent agency within the federal government, could address financial losses. The postal service lost almost $4 billion in fiscal 2018, which ended on Sept. 30, even as package deliveries rose.

“The USPS is on an unsustainable financial path which poses significant financial risk to American taxpayers,” said Treasury Secretary Steven T. Mnuchin in a press release. “President Trump tasked us with conducting a thorough evaluation of the USPS, and today’s report contains achievable recommendations that fulfill the President’s goal of placing the USPS on a path to sustainability, while protecting taxpayers from undue financial burdens and providing them with necessary mail services.”

The postal service has been losing money for more than a decade, the task force said, partially because the loss of revenue from letters, bills and other ordinary mail in an increasingly digital economy have not been offset by increased revenue from an explosion in deliveries from online shopping.

The president has repeatedly attacked Amazon on Twitter for treating the Postal Service as its "delivery boy" by paying less than it should for deliveries and contributing to the service's $65 billion loss since the global financial crisis of 2007 to 2009, without presenting evidence.

The rates the Postal Service charges Amazon and other bulk customers are not made public.

"None of our findings or recommendations relate to any one company," a senior administration official said on Tuesday.

The task force recommended that the Postal Service have the authority to charge market-based rates for anything that is not deemed an essential service, like delivery of prescription drugs.

It also recommended that the Postal Service address rising labor costs. "The USPS must pursue new cost-cutting strategies that will enable it to meet the changing realities of its business model," the task force said.

The Postal Service should also restructure $43 billion in pre-funding payments that it owes the Postal Service Retiree Health Benefits Fund, the task force said.

Most of the recommendations made by the task force can be implemented by the agency. Changes, such as to frequency of mail delivery, would require legislation.

Amazon, eBay Inc, FedEx Corp and United Parcel Service Inc did not immediately return requests for comment.