It looks like President Trump is feuding with Amazon and the U.S. Postal Service. Trump took to Twitter to speak on some grievances he was having with the e-commerce website and the agency.
Trump called out the U.S. Postal Service for not upping its price when they are in desperate need of help. He also stated that the agency is "dumber and poorer" for helping Amazon become much more richer. Check out President Trump’s tweet below:
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!
— Donald J. Trump (@realDonaldTrump) December 29, 2017
While targeting Amazon is something the president does quite often, this recent callout draws fresh attention to the Postal Services financial problems.
Trump’s Feud With Amazon
This isn’t the first time Trump has called out Amazon. Just this year alone, Trump took to social media criticizing Jeff Bezos for acquiring The Washington Post. He also said the company does not pay sales tax, which is untrue.
According to Venture Beat, GBH Insights analyst Daniel Ives says Amazon should take Trump’s recent comments as a warning.
“We do not see any price hikes in the future. However, that is a risk that Amazon is clearly aware of and (it) is building out its distribution (system) aggressively,” Ives said.
US Postal Service Financial Issues
The postal service may have a government sanction monopoly over first-class mail, but it still competes with delivery services such as FedEx and UPS. The only difference between the postal service and its competition is that almost every aspect of the agency is operated by Congress — including pricing.
Unfortunately, Congress has tied the agency's hands with laws that cap price increases at the rate of inflation. There's also a law that limits the proportion of the U.S. Postal Services budget that could be devoted to its parcel business. Furthermore, the Postal Service must pre-fund its retiree health benefits and count them as an operating expense, which is costly.
It would be in the agency's best interest to increase its parcel delivery prices as Amazon is its top client. However, Amazon has already shown interest in shifting to its own delivery service. We’ve already seen testing drones for deliveries and if the prices rise, Amazon will have more than enough reason to start its own delivery service.
