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President Trump launched a Twitter attack against online retailing giant Amazon.com in early April 2018, alleging that the company's package delivery contract with the United States Postal Service (USPS) has caused the latter to lose money and placed an undue financial burden on American taxpayers: Although he said it with characteristic bombast, Trump wasn't the first to claim that the company's working relationship with the USPS disproportionately benefits Amazon.com. A July 2017 opinion piece in the Wall Street Journal argued that the Postal Service effectively subsidizes Amazon's shipping by setting its rates lower than the market will bear: Nor are the fiscal challenges faced by the USPS a brand new concern. In early 2017, the trade web site PostalTimes.com posted an editorial observing that the Amazon.com partnership was initially seen as potentially beneficial to the struggling USPS, but turned to be otherwise: However, it's one thing to point out that the partnership could have been more mutually beneficial and quite another to allege that its deal with Amazon.com is the main cause of the USPS's financial woes. As the New York Times noted in 2013, legal constraints imposed on the Postal Service by Congressional fiat have hampered its profitability for years: The USPS posted a $2.7 billion net loss in 2017, marking its eleventh straight year of financial decline. It has averted bankruptcy only by defaulting on the mandate to prepay retiree health benefits, to the tune of tens of billions of dollars. But the balance sheet also showed that although first-class and marketing mail revenues were down from the previous year, shipping and package delivery revenues were up. A significant portion of those gains were attributable to deals with companies like Amazon.com. According to a report by PBS NewsHour, the USPS routinely handles around 40 percent of Amazon's last mile (distribution center to customer's door) deliveries — almost the same volume as that handled by FedEx and UPS combined — thanks to its ability to offer lower rates based on existing mail routes and daily delivery schedules. Although the details of the agreement are proprietary, it's safe to assume that no matter how competitive its rates, the Postal Service isn't charging less than its own costs. That's because federal law requires the revenue for each competitive product to cover its attributable cost, and the balance sheet is closely monitored by the Postal Regulatory Commission (PRC), an independent agency. On the other hand, the PRC enforces strict price caps on so-called non-competitive products such as first-class mail — caps which, in the words of the USPS's chief financial officer, Joseph Corbett, are wholly unsuitable to ensuring the Postal Service’s continued ability to provide prompt and reliable universal services in a self-sufficient manner. Postal Service officials have lobbied for greater latitude in adjusting prices to meet fiscal requirements. The USPS has been on a financially unsustainable path for years and could conceivably reach the point of requiring a government bailout unless lawmakers take action to revise the statutes governing its management, particularly with regard to issues such as funding retiree health benefits. However, the notion that this state of affairs stems from losses attributable to a sweetheart deal with Amazon.com strays far from the defensible fact. By law, the USPS is required, at minimum, to break even on the deal. And that puts the lie to Trump's claim that the cost of the Postal Service's alleged sweetheart deal with Amazon.com is ultimately bourne [sic] by the American taxpayer. The USPS doesn't receive any tax dollars — but even if it did, since no money has been lost on the Amazon deal there are no such taxpayer costs to be bourne.
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