By Tracey Lien / Los Angeles Times
President Donald Trump took aim at the U.S. Postal Service Friday, admonishing the service for its financial losses and for failing to charge more.
“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!” Trump posted on Twitter.
It is unclear why the president chose Friday to lash out at the postal service. The agency last reported its earnings on Nov. 17. During its 2017 fiscal year, spanning Oct. 1, 2016 to Sept. 30, 2017, it recorded $69.6 billion in revenue, a decrease of $1.8 billion from the previous year. The postal service reported a loss of $2.7 billion.
In its fiscal year, mail volumes declined by about 5 billion pieces, or 3.6 percent, while package volumes rose by 589 million pieces, or 11.4 percent. Despite the growth in package volume offsetting some of the decline in mail volume, The Postal Service said overall volume declined by 4.9 billion pieces.
That increase could be attributed to Amazon.com orders — the company announced this week that holiday shoppers broke spending records on its platform. Globally, Amazon reported more than 1 billion items ordered during the holiday season. From Thanksgiving to Cyber Monday alone, shoppers around the world bought more than 140 million products from Amazon.
Amazon uses all the major carriers, including UPS, FedEx and the U.S. Postal Service to handle its deliveries.
In 2013, Amazon reached a five-year deal with the Postal Service to offer delivery on Sundays. The specifics of the deal have not been made public. Citigroup analysis cited by the Wall Street Journal estimates that Amazon receives a $1.46 discount per package. Amazon did not immediately respond to a request for comment.
The Postal Service is the second-largest civilian employer in the United States with about 640,000 workers, so “a 1 percent change in 10-year Treasury rates can cause an increase or decrease in workers’ compensation liability of approximately $2 billion,” the agency said in its 2017 annual report to Congress.
The Postal Service is also obligated to serve rural regions, many of which would otherwise go unserved. In a fact sheet published this year, the USPS said it is the only delivery option for much of rural America, and that it delivers to 43 million rural addresses.
“Paying for that infrastructure is becoming increasingly challenging, due to the cost of serving approximately 1 million new delivery points annually,” according to the report. “This challenge is exacerbated as mail volumes decline and mandated costs continue to rise. Under existing laws and regulations, our business model is broken.”
The Postal Service has over the years introduced modest increases to the costs of shipping.
The next rate increase, which will take effect Jan. 21, 2018, will increase the cost of postage stamps from 49 cents to 50 cents, and large flat envelopes from 98 cents to a dollar.