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Trump wanted to double postal rates for Amazon, others, says report

Amazon relies on the Postal Service for the so-called last mile (delivery from warehouses to customers' homes) on as many as 40 percent of all US orders, according to estimates

Spencer Soper & Devin Leonard | Bloomberg 

Trump, Donald trump, united states
Photo: Reuters

pushed US officials to double package delivery rates paid by Amazon.com Inc. and other companies, the Washington Post reported, highlighting that his beef with the e-commerce giant and founder Jeff Bezos goes beyond tweets.

Trump pressured US Postmaster General Megan Brennan to raise Amazon’s rates, which Brennan resisted by explaining that the agency was bound by contract and any changes would have to be approved by a regulatory commission, the newspaper said, citing unidentified people familiar with their conversations.

Amazon shares slipped 0.3 per cent to $1,576.65 in afternoon trading in New York. That’s roughly where they were before the report. The White House and Amazon declined to comment. The didn’t respond to a request for comment on Friday.

Trump recently ordered a review of the Postal Service’s finances and suggested on that it might start charging Amazon higher delivery rates. Bezos owns the Washington Post, which has drawn criticism from the president over its coverage of his administration.

Trump has repeatedly lambasted Amazon from his pulpit, including a March 29 broadside: “I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the US), and are putting many thousands of retailers out of business!”

While the US Postal Service’s contract with Seattle-based Amazon is confidential, the agency has argued that the relationship is beneficial and supports mail customers and other services. The is prohibited from charging shippers less than its delivery costs.

Amazon relies on the Postal Service for the so-called last mile (delivery from warehouses to customers’ homes) on as many as 40 percent of all US orders, according to analysts’ estimates. While the relationship is mutually beneficial, it saves Amazon as much as $2.6 billion a year versus rates charged by independent couriers such as United Parcel Service Inc. and FedEx Corp., analysts say.

Amazon is experimenting with its own delivery operations, including using independent contractors in their own vehicles — similar to ride-hailing services from Uber Technologies Inc.

First Published: Sat, May 19 2018. 21:20 IST
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