President Trump’s criticisms against Amazon have escalated with his latest attack suggesting that he would take measures to change the agreement between the online retail giant and the United States Postal Service. Amazon’s stock fell as a result. In previous attacks Trump has alleged that Amazon avoids paying tax or pays little to local and state governments. Additionally Trump has alleged that on every Amazon package it delivers the USPS loses approximately $1.50.
However some of Trump’s assertions are incorrect. With regards to taxes for instance the online retail giant is involved in collecting local taxes by the 45 states which require it. Third party sellers on Amazon may however have other arrangements of their own.
Postal Regulatory Commission
The pricing structure of the Postal Service is overseen by a federal agency known as Postal Regulatory Commission which reviews the Amazon contract on an annual basis. Probably due to the volume of business the Postal Service grants Amazon a discount though the exact details are private. Every year an independent regulator conducts a review of the contract to ensure that it is profitable for the postal service.
In recent years the growing parcel delivery business of the postal service which has been made possible by the expansion of e-commerce has assisted in offsetting some of the losses the USPS has been incurring in recent years. Last year the number of packages delivered by the postal service increased by 589 million compared to a year earlier. This resulted in an increase in revenue amounting to $2.1 billion and a volume growth of 11.4%. The volume of mail delivered by the postal service fell by 3.6% or 5 billion pieces. Overall the USPS recorded revenues amounting to $69.6 billion last year and a loss of $2.7 billion.
Observers however say that the attacks on Amazon are driven by the fact that the founder of the online retail giant, Jeff Bezos, owns Washington Post which he has derided in the recent past alongside other mainstream media outfits. Sources say that Trump is of the view that Bezos influences editorial decisions at the Post and this is the reason for the bile. The executive editor of the Washington Post, Martin Baron, however denies that.
“I can’t say more emphatically he’s never suggested a story to anybody here, he’s never critiqued a story, he’s never suppressed a story. Frankly, in a newsroom of 800 journalists, if that had occurred, I guarantee you, you would have heard about it,” saidBaron.