Commentary

Trump's Claims That Postal Service Loses Money On Amazon Draws Fire

So, is Amazon really costing “the American Taxpayer" “many billions of dollars” because the U.S. Postal Service loses “$1.50 on average for each package it delivers” for the online retailer, as President Donald Trump would have it in a series of recent tweets?

Of course. And Jeff Bezos, when he’s not dictating editorial policy at the Washington Post, is building rockets so he can mine all the green cheese on the moon.

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Actually, “the USPS has been on a financially unsustainable path for years,” snopes.com concludes. “… However, the notion that this state of affairs stems from losses attributable to a sweetheart deal with Amazon.com strays far from the defensible fact. By law, the USPS is required, at minimum, to break even on the deal.” 

Indeed, “the details about the deal are not public — they are considered commercially sensitive information — but some of the available evidence suggests the opposite: that Amazon has been a boon to the Postal Service,” writes Nick Wingfield for the New York Times.

“The big problem with Trump’s view of Amazon is not that he gets his facts wrong. By now, we should be used to ‘taking Trump seriously but not literally,’ in Salena Zito’s memorable phrase. And commentators are probably wrong that Trump’s attacks on Amazon stem solely from pique at aggressive media coverage from the Washington Post, which is owned by Amazon founder Jeff Bezos,” writes Cato Institute senior fellow Michael Tanner in the National Review.

“The much bigger issue is Trump’s Bernie Sanders–style misunderstanding of economics and his nostalgia for an imagined 1950s America.”

It may also be personal.

“The President’s net worth plummeted by more than $600 million in the past year, according to the Forbes 400 List of the wealthiest people in America,” writes Bob Fredericks for the New York Post. “And the magazine reported Wednesday that a big reason Trump’s real estate holdings had slumped was because retail values were struggling in response to Amazon’s gains.”

Fredericks reports that Forbes’ assistant managing editor Kerry Dolan “blamed the president’s real estate losses on e-commerce’s domination over retail” on a CNN appearance Tuesday, specifically mentioning the lease of the Niketown store and the Trump Tower property.

Not that the Postal Service doesn’t really have financial issues. It's just that they aren't of Amazon's making. Blame it on Congress for passing the Postal Accountability and Enhancement Act of 2006, says Barry Ritholtz in a Bloomberg “View” column, which requires it “to prefund its retirees’ health benefits for 75 years into the future.” 

Operationally, “the problem for the USPS isn't the packages from the likes of Amazon, but rather, the rest of the Post Office’s mandate. In its annual report, the USPS noted that 2017 saw ‘mail volumes declined by approximately 5.0 billion pieces, or 3.6%, while package volumes grew by 589 million pieces, or 11.4%,’” points out Ritholtz. “Amazon and other internet retailers are a source of profitable deliveries for the post office; the relationship is in no way a subsidy for the retailers.”

Amazon CEO Jeff Bezos has been notably silent.

“Amazon and Bezos have largely ignored Trump's Twitter storm, demonstrating what some crisis communications experts say has been a key lesson for corporate America about Trump’s presidency: His social media screeds alone may not have much bite or lasting impact on a company’s share value,” observes Fredreka Schouten for USA Today

“‘Most CEOs realize that this president, who is known to have no strategy, will move onto the next issue, so why elongate the pain' by engaging in a social media battle with him, Richard Levick, chairman and CEO of  Washington-based crisis communications firm LEVICK, tells Schouten.

The USA Today editorial board scolds the President for his dubious claims and ventures a friendly suggestion: “If Trump wanted to do something useful, he would press Congress to pass long-stalled measures to put the Postal Service on a sounder financial footing by closing under-utilized offices, cutting back on Saturday delivery, and reducing its labor costs  — rather than bash a success story of American capitalism.”

Trump also was chastised in some quarters for referring to the Postal Service as Amazon’s “Delivery Boy.”

Then again, when your hammer is social media and you reach a certain age …

“This is when I appreciate Twitter: It used to be, if you wanted to hear a 71-year-old man whining about the post office,” quipped Seth Meyer on “Late Night”, “you had to go to the post office.” 

1 comment about "Trump's Claims That Postal Service Loses Money On Amazon Draws Fire".
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  1. Stan Valinski from Multi-Media Solutions Group, April 7, 2018 at 2:12 a.m.

    You have to wonder if trump gives certain buds a "headsup" before twitter bashing a large corporation so they can all sell short?

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