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Trump, Amazon and the Post Office
: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Apr 2018: A.14.
President Trump on Monday continued his Twitter tantrum against Amazon, which seems to irritate him even more
than CNN. He should train his fire on Congress for the post office’s problems.
Over the weekend the President tweeted that “the U.S. Post Office will lose $1.50 on average for each package it
delivers for Amazon. That amounts to Billions of Dollars.” He popped off again Monday morning: “Only fools, or
worse, are saying that our money losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this
will be changed.”
The source for Mr. Trump’s tweets appears to be an op-ed by Josh Sandbulte that ran in our pages last summer,
which argues that Amazon free rides on the post office with its last-mile delivery deal. Amazon drops off presorted
packages at United States Postal Service (USPS) depots, and postal workers deliver them to homes on their
Congress has mandated that USPS deliver mail to every address in America six days a week, which is a fixed
business cost that Amazon and some other large e-retailers piggy-back on. The incremental labor and
transportation costs to deliver Amazon’s packages are typically small and hard to measure.
Mr. Sandbulte contends the agency should allocate more of its fixed costs to packages, and a Citigroup analysis
last year estimated parcels would on average cost $1.46 more if shippers were required to absorb a greater share.
The post office isn’t a profit-maximizing business, so perhaps the agency is leaving money on the table. But the
“last-mile” deal is nonetheless a boon for taxpayers since the additional revenues help defray the post office’s fixed
Over the past decade, the post office has lost more than $60 billion even while failing to make required retirement
health payments. Operating costs not including retirement obligations have outpaced revenue growth over the
past four years, notwithstanding a 60% increase in shipping and package revenue.
When businesses lose money, they shave costs or go bankrupt. Private package-delivery competitor UPS has
announced plans to freeze its pension plan for non-unionized workers, and FedEx employs independent
contractors. But collective-bargaining agreements constrain the post office’s ability to improve efficiency.
According to USPS’s annual report, the number of deliveries measured across all work hours hasn’t increased
Congress has also refused to reduce USPS’s fixed costs by changing the six-day delivery mandate despite
pleadings from prior postmasters general. A modified schedule could impel Amazon and other online retailers to
pay more for deliveries. Alas, lawmakers can’t even pass de minimis reforms. Last year a bipartisan bill was
introduced in the House that would enroll postal retirees in Medicare and convert door delivery to clustered drop-
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offs. It’s gone nowhere.
One reason is that the status quo benefits rural residents as well as businesses that use mail advertisements.
Maybe President Trump could use his bully pulpit to press Congress for postal reforms. Taxpayers would surely be
better off if the post office were as efficient and innovative as Amazon.
Costs; Postal &delivery services; Retirement; Post offices; Editorials
Trump, Donald J
: Citigroup Inc; NAICS: 551111; : CNN; NAICS: 515210; : United States Postal Service;
NAICS: 491110; : Twitter Inc; NAICS: 519130; : Congress; NAICS: 921120; : FedEx
Corp; NAICS: 484110, 492110, 551114
Trump, Amazon and the Post Office
Wall Street Journal, Eastern edition; New York, N.Y.
Apr 3, 2018
REVIEW &OUTLOOK (Editorial)
Dow Jones &Company Inc
New York, N.Y.
United States, New York, N.Y.
Business And Economics–Banking And Finance
Page 2 of 3
(c) 2018 Dow Jones &Company, Inc. Reproduced with permission of copyright owner.
Further reproduction or distribution is prohibited without permission.
The Wall Street Journal
Get It! @ ASU, Get It! @ ASU
? 2018 ProQuest LLC
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