For Full Story: FreightWaves

Article By: Chad Prevost

 

A Trump administration review of the struggling U.S. Postal Service proposes sweeping changes in its operations that is raising alarm bells for Amazon and other major businesses. The report, requested last April by President Trump, prescribes raising prices for many types of commercial package deliveries.

The task force, led by treasury secretary Steven Mnuchin, spent weeks meeting with companies and trade associations in affected industries like retail and package delivery. Officials from the Office of Management and Budget and other federal agencies have also been involved.

Among other things, the report says package deliveries “have not been priced with profitability in mind.” It adds that USPS should have the authority to charge market-based prices for mail and package items that aren’t deemed essential services. It’s the commercial delivery portion of USPS’s business, however, that has become the most profitable.

A number of aspects of the report should be welcomed. USPS needs attention and leadership. The report calls for stronger oversight by the Postal Service Board of Governors, which sat empty until last April. It also suggests the agency consider other revenue streams, such as renting out unused real estate to businesses, charging outside shippers for access to people’s mail boxes, and issuing hunting and fishing licenses. Some of the proposed changes, including increasing package prices, can be enacted without intervention from Congress, but other proposed changes would require lawmakers to act.

The main focus of attention is on Amazon, however, and the proposal to increase prices on the commercial (or non-essential) delivery items. This is no doubt because of the president’s open animosity toward Amazon—which is owned by Jeff Bezos, who owns the Washington Post, which the president despises.

The administration on Tuesday denied targeting Amazon, saying the report’s recommendations would hit the coffers of all retailers with a large volume of online sales.

“None of our findings or recommendations are linked to any one customer or competitor of the Postal Service,” said a senior administration official. “We based our analysis on the needs of the entire economy and all its businesses.”