President Trump is creating a new task force to evaluate the U.S. Postal System that will review “the expansion and pricing of the package delivery market and the USPS’s role in competitive markets.”
The move was unveiled in an executive order abruptly announced Thursday evening by the White House, following Trump’s repeated attacks on Amazon for having an negative financial impact on the U.S. Postal Service.
The task force will seek recommendations for “administrative and legislative reforms” for the postal service and will be chaired by Treasury Secretary Steven Mnuchin.
According to the executive order, the U.S. Postal Service has been hit with a total of $65 billion in losses since the 2007-2009 recession.
The task force will evaluate “the decline in mail volume and its implications for USPS self-financing and the USPS monopoly over letter delivery and mailboxes,” the operation’s business model, and the role the U.S. Postal Service plays in the U.S. economy and rural areas.
“It shall be the policy of my Administration that the United States postal system operate under a sustainable business model to provide necessary mail services to citizens and businesses, and to compete fairly in commercial markets,” the executive order says.
While the executive order makes no mention of Amazon, Trump has repeatedly railed against the retail giant, arguing it causes the U.S. Postal Service to “lose $1.50 on average for each package for Amazon” by delivering packages for the company at a discounted rate.
The statistic is pulled from a Citigroup research report from April 2017 that argues the U.S. Postal Service could pay its expenses if it lifted the average package delivery rate.
But a significant factor that has caused the U.S. Postal Service to lose money is a law that was established in 2006 that demanded the operation to prefund employee health benefits 75 years into the future — a mandate that totals approximately $5.5 billion a year.
Democrats have suggested removing the pension law so the U.S. Postal Service could receive a profit, or at least break even with operating costs.
Approximately 40 percent of Amazon deliveries utilize the U.S. Postal Service, according to NPR. The rate Amazon receives in its deal with the U.S. Postal Service is determined evaluated by the Postal Regulatory Commission each year.
Although Amazon has not revealed the rate they receive, the law demands that the contracts are profitable.
According to the U.S. Postal Service’s 2017 fiscal report, the company actually made more money in shipping and packages than in 2016. In fact, shipping and packages raised $2.1 billion more in revenue in 2017 than in 2016, despite an overall revenue loss of $1.8 billion.
