SEATTLE/WASHINGTON: President Donald Trump called on the US Postal Service on Friday to charge ‘much more’ to ship packages for Amazon, picking another fight with an online retail giant he has criticised in the past.
“Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!” Trump wrote on Twitter.
The president’s tweet drew fresh attention to the fragile finances of the Postal Service at a time when tens of millions of parcels have just been shipped all over the country for the holiday season.
The US Postal Service, which runs at a big loss, is an independent agency within the federal government and does not receive tax dollars for operating expenses, according to its website.
Package delivery has become an increasingly important part of its business as the Internet has led to a sharp decline in the amount of first-class letters.
The president does not determine postal rates.
They are set by the Postal Regulatory Commission, an independent government agency with commissioners selected by the president from both political parties.
That panel raised prices on packages by almost 2 per cent in November.
Amazon was founded by Jeff Bezos, who remains the chief executive officer of the retail company and is the richest person in the world, according to Bloomberg News.
Bezos also owns The Washington Post, a newspaper Trump has repeatedly railed against in his criticisms of the news media.
In tweets over the past year, Trump has said the “Amazon Washington Post” fabricated stories.
He has said Amazon does not pay sales tax, which is not true, and so hurts other retailers, part of a pattern by the former businessman and reality television host of periodically turning his ire on big American companies since he took office in January.
Daniel Ives, a research analyst at GBH Insights, said Trump’s comment could be taken as a warning to the retail giant.
However, he said he was not concerned for Amazon.
“We do not see any price hikes in the future. However, that is a risk that Amazon is clearly aware of and (it) is building out its distribution (system) aggressively,” he said.
Amazon has shown interest in the past in shifting into its own delivery service, including testing drones for deliveries.
In 2015, the company spent $11.5 billion on shipping, 46 per cent of its total operating expenses that year.
Amazon shares were down 0.86 per cent to $1,175.90 by early afternoon.
Overall, US stock prices were down slightly on Friday.
Satish Jindel, president of ShipMatrix Inc, which analyses shipping data, disputed the idea that the Postal Service charges less than United Parcel Service Inc and FedEx Corp, the other biggest players in the parcel delivery business in the United States.
Many customers get lower rates from UPS and FedEx than they would get from the post office for comparable services, he said. — Reuters
Oman Observer is now on the WhatsApp channel. Click here
