Trump administration recommends postal reforms that could lift rates

Trump administration recommends postal reforms that could lift rates

The president ordered creation of the task force, which was overseen by Mnuchin, last April after complaining that the Postal Service was not charging big users like Amazon enough to handle its shipments. During the 2018 fiscal year, the Postal Service recorded a net loss of $3.9 billion, which is an increase of more than $1 billion over the losses it suffered in 2017.

The task force created by Mr. Trump to investigate the Postal Service's finances did conclude that the mail system is losing money.

A new report out of Washington on the U.S. Postal Service could be bad news for Amazon.com, Inc.

Trump appointed the commission after months of intermittent threats and insults against Amazon and The Washington Post, which is owned by Jeff Bezos, the retail giant's founder and chief executive. In a statement, eBay said it is a "long standing partner of the United States Postal Service" and its "small business sellers rely on USPS to reach their customers".

Amazon shares dropped about 1% on the late-afternoon news to close at $1,668.40, losing almost 6% for the day amid a broader market downturn.

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Congress sets the formula used by the USPS to price packaging delivery, but that formula hasn't been adjusted since 2006.

Most of the recommendations made by the task force, including possible price hikes, can be implemented by the agency. Trump 2020 advisory board member Harlan Z. Hill said, adding that any sale would have to abide by the Constitutional mandate that the government guarantee mail delivery.

In regard to charging more for non-essential postal services, officials who briefed reporters said person-to-person mail and person-to-person packages would be considered essential postal services and would be exempt from the higher rates that would be levied on non-essential mail.

If prices jumped 10 percent, that would increase annual costs for Amazon by at least $1 billion, he said.

The task force also recommended the Postal Service pursue cost-cutting strategies to address rising labor and operating costs, and have greater flexibility in determining delivery frequency. When the current law was written, it assumed package delivery would make up about 5.5 percent of Postal Service revenue, but the rise of e-commerce companies like Amazon has pushed that percentage to about 25 percent. Our union will continue to strongly advocate for a robust public Postal Service and the rights of the hundreds of thousands of dedicated public servants that move the mail every day. "Recommendations would slow down service, reduce delivery days and privatize large portions of the public Postal Service". "Today's report contains achievable recommendations that fulfill the President's goal of placing the USPS on a path to sustainability, while protecting taxpayers from undue financial burdens and providing them with necessary mail services". The company didn't immediately respond to a request for comment.

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