Trump Convenes Task Force to Study Postal Service Operations

Packages pass through a scanner at an Amazon fulfillment center in Baltimore. Associated Press files

The Postal Service welcomed the presidential commission, saying "an open and transparent review process in which the perspectives of all stakeholders are fully represented to develop reform proposals could benefit American businesses and consumers".

The order said a decline in first-class mail volume, coupled with legal mandates that force the USPS to incur substantial and inflexible costs, resulted in a deficit where revenues can no longer fund pension liabilities and retiree health obligations owed to current employees.

That development may represent an escalation in Trump's attacks on Amazon for its dealings with the service, analysts said.

Trump explained in the order that the Postal Service was on "an undercover financial course", and "needs to be compared to protect against a taxpayer-funded bail out".

President Trump has repeatedly accused Amazon of not paying its fair share for postage.

Trump's executive order acknowledges both issues. The revenue breakdown, however, suggested that shipping and packages were one of the few categories where the USPS made more money year-on-year.

The task force will be chaired by Treasury Secretary Steven Mnuchin, with help from the directors of the Office of Management and Budget and Office of Personnel Management. Credit Suisse estimates this could amount to a hit of $1 billion to $1.8 billion to Amazon's bottom line.

The Postal Accountability and Enhancement Act in 2006 made it illegal for the Postal Service to ship parcels at below cost.

The USPS reported a net loss of $2.7 billion on $69.6 billion in revenue in 2017.

President Donald Trump has repeatedly called out Amazon in recent weeks, arguing that the retailer must pay the USPS more per package because it is ripping off the service. However, experts have countered that the while the service does lose money delivering first class mail, e-commerce package deliveries are profitable.

Claims that Amazon is taking advantage of the Postal Service have not passed muster with fact checkers. Credit Suisse says Amazon's dependency on the USPS is a worrisome silver bullet that could damage the company's ability to delight its customers.

It's not clear what effect the task force would ultimately have, since most changes to the Postal Service's business structure would require new legislation.

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