On Friday, President Donald Trump said that the United States Postal Service should be charging more to ship Amazon packages, starting another fight with the e-commerce giant he has often criticized.
In a tweet the President said why is the U.S. Postal Service, which continues to lose billions of dollars annually, while charging companies such as Amazon amongst others very little to deliver packages, making Amazon richer and the Postal Service poorer and dumber.
The tweet by the president drew new attention to the Postal Service’s fragile finances during a time when millions of parcels were just shipped across the country during the holiday shopping season.
The USPS, which operates at a huge loss, is independent within the U.S. government and does not receive any tax dollars for its operating expenses, says its website.
The delivery of packages has become more and more an important part of the USPS business, as the Internet led to a huge decline in the number of first class letters that are sent out.
The president is not involved in determining the postal rates. The rates are established by an independent agency within the government known as the U.S. Postal Regulatory Commission that has commissioners who are selected by the president from both major parties. The panel increased prices in November by almost 2% on packages.
Jeff Bezos founded Amazon and remains its CEO. He is considered the world’s richest person. Bezos also is the owner of The Washington Post, which is a newspaper that Trump has often railed against when criticizing the news media.
In his tweets during the last year, the President has said the “Amazon Washington Post” had fabricated stories. He said the Amazon does not pay its sales taxes, and thus hurts other retailers.
A Wall Street research analyst said that the comment by Trump could be considered a warning to Amazon. However, he has said he was not worried for Amazon.
The analyst added that there likely will not be any price hikes soon, but that is a risk Amazon is aware of and it is building its distribution system very aggressively.
Amazon has indicated an interest during the past of shifting to its own service for deliveries including the testing of drones to deliver packages. In 2015, over $11.5 billion was spent by Amazon on shipping, which for that year represented 46% of all its operating expenses.