Trump, Bezos, Amazon, and the Post Office

Omar Bekdash ‘18, Opinions Editor and Senior Columnist

In response to Trump’s trashing him on twitter two years ago, Jeff Bezos expressed a desire to eject Donald Trump into space on his new Blue Origin rocket. Since then, their relationship has not gotten much better, with President Trump happy to chime in every once in a while on Bezos, his e-commerce empire Amazon, and The Washington Post, a well-established newspaper now revitalized under Bezos’s leadership. A few days after Christmas, President Trump decided to resume the torrent of tweets towards the richest man in the world (net worth at $99 billion), accusing Bezos’s Amazon of exploiting the post office.

The post office, which services delivery companies like Amazon, FedEx, UPS, and also delivers mail directly to households, has recorded records losses of $5.6 billion last year (1). Whereas most in the USPS blame rising healthcare costs, President Trump has directed his blame towards Amazon, which has formed a close relationship with the postal service. The postal service carries Amazon-ordered goods on the “last leg” of delivery routes—when the goods are directly delivered to households. This has been particularly helpful in letting companies like Amazon offer quicker services in rural and suburban areas, allowing these companies to use the postal service’s well-developed infrastructure. As usage of first-class mail has entered a long decline, the USPS’s parcel delivery service is becoming an increasingly important part of its important function.

However, President Trump might be on to something. One study by the Wall Street Journal concluded that the USPS loses, on average, about $1.46 for every Amazon-ordered good they deliver. If the USPS raises the cost per parcel of delivery, it could solve some of their solvency problems. Ryhan Moghe ’18 disagrees, stating “that if you increase the price of something, then it will likely decrease the demand. And if prices become high enough, Amazon might just go ahead and bypass the Postal Service.” However, this may not be the case. Amazon is not a cash-strapped company. Indeed, tech giants like Amazon are awash in money. Citygroup analysts suppose that Amazon would be very well positioned to absorb the shock if the USPS decided to follow President Trump’s lead and raise prices. The question then become whether other much-smaller delivery services, like staples and Best Buy, would be able to weather such an action.

However, President Trump, as usual, did not offer any specific plan to shore up the post office’s finances. The biggest obstacle to enacting any change at the USPS seems to be, as of now, Trump himself. President Trump seems willing to complain about these issues, but ends up doing nothing in the end. Amidst his crusade to deregulate vast swathes of American bureaucracy, President Trump has purposely neglected to fill thousands of government positions, according to Politico. The post office is a casualty of Trump’s efforts to shrink the national government. The USPS’s nine-member Postal Service Board of Governors, which has the power to raise rates, has only two of nine positions filled. President Trump needs to appoint seven more people if he wants to, indeed, do anything.

Many speculate that his latest outburst is simply a sign of Trump’s habitual early-morning tirades on twitter. “I honestly think,” Max Sun ’18 contemplates, “that his beef with Jeff Bezos, who is the owner of Trump’s least favorite newspaper, The Washington Post, is the only explanation behind all of this.”

1. https://www.washingtonpost.com/news/the-switch/wp/2017/12/29/trump-calls-for-u-s-postal-service-to-raise-amazons-shipping-rates/?utm_term=.d77ed5f2beac
2. https://www.wsj.com/articles/why-the-post-office-gives-amazon-special-delivery-1499987531
3. https://www.politico.com/story/2017/10/10/trump-federal-government-appointments-vacant-243627