U.S. President Donald Trump on Thursday ordered the creation of a task force to study the U.S. Postal Service and its financial difficulties, after recently claiming without evidence that deliveries for Amazon.com Inc (AMZN.O) were costing the service money. The executive order never mentions the word "Amazon", but there's little doubt that Trump's ongoing feud with Jeff Bezos - who also owns the Washington Post, which POTUS calls "fake news" - is the impetus here.
Under the executive order, a task force chaired by the US Treasury Secretary will investigate the postal service's business model-including pricing-and offer recommendations on reform. Earlier this month, in comments to the press, Trump said, "Amazon is going to have to pay much more money to the Post Office". According to the 2017 USPS financial statement, the declining revenue of mail delivery is being offset by shipping and package delivery.
President Trump has long taken issue with the U.S. Postal Service, but now he's doing something about it. It added that the agency had been unable to make payments for its retiree health benefit obligations that "totaled more than $38 billion" at the end of fiscal 2017. The USPS instituted Sunday deliveries of Amazon packages in 2013, for example, despite its longtime practice of suspending mail deliveries on that day of the week.
Trump's executive order acknowledges both issues. For the first time, a year ago the Postal Service missed payments it owes to the federal retirement system, for a combined total of $6.9 billion.
In fact, the Postal Service has lost money for years, but it actually makes money on package deliveries, with Amazon accounting for a large chunk of that.
The USPS actually set a record on December 18, 2017, when more than 37 million packages were delivered - the most packages delivered in a single day in its more than 200-year history.
Another scenario is that Amazon would absorb any increased cost from using the USPS to deliver packages. "The prefunding requirement began as an effort to ensure Postal Service liabilities would not become a taxpayer burden if the Postal Service were to someday cease to exist", a 2015 report by the Postal Service's Office of Inspector General explained. But the USPS is still most likely undercharging businesses - not just Amazon - to ship packages.