Unless one lives under a rock, we’ve all heard the current president’s constant carping about Jeff Bezos. It seems that all things Bezos are “bad, terrible, disgraceful," (or any of the litany of Trumpish childish negatives here), in Donald Trump’s eyes. Of course, with Trump’s history of “everything envy” we must examine the validity of the tiny handed one’s carping.
Due to the more complex nature of the issue, we’ll address the Amazon/USPS claim first and separately. Five times recently, Trump has pointed his Twitter poison arrows at Bezos’ company, Amazon, over what he insists is a bad deal for the United States Postal Service. Writing recently that the agreement, which sets what Amazon pays the Postal Service for many orders, costs American taxpayers billions of dollars, he claimed, “I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy.” Available evidence suggests that, on the contrary, Amazon’s business has been a boon to the Postal Service.
As we Americans increasingly, and predictably, eschew snail mail for electronic information delivery, the USPS has experienced a steady decline in the amount of mail it ships. The total pieces of mail it shipped last year was 149 billion, down from 212 billion a decade earlier. If this were the case for parcels as well, things would be far worse than the admittedly poor state of financial affairs in which USPS currently finds itself. There is, however, a bright spot — its business of package shipping, including Amazon orders, has grown by more than 40% over the same span (5.7 billion packages in 2017, up from 3.3 billion in 2008). Without Amazon’s business, the financial picture at the Postal Service would most likely be far bleaker, most analysts say.
As with all large private shippers, USPS negotiates a “volume discount” for volume shipping. Unlike many of these shippers, Amazon helps lower USPS costs by organizing the packages it takes to the Post Office by destination ZIP code in over 35 sorting centers around the country, leaving less work that must be done by postal workers. The company then relies on the Postal Service strictly for last-mile delivery to customers, short trips that further limit the cost of delivering each package.
Here’s a shocker: Mr. Trump’s figures appear to have come from an opinion piece published last year in The Wall Street Journal and written by an investor whose firm held shares in FedEx. Coincidentally, Amazon Prime shipping packages are mostly (preferentially) shipped via UPS, not FedEx. Who’d have thought a Fedex stockholder might be less than objective? On the other hand, Kevin Kosar, vice president of policy at the R Street Institute, a nonprofit conservative-leaning (my italics) think tank, who has studied the Postal Service, said he considered it “wildly unlikely” that Mr. Trump has reviewed the Postal Service’s contract with Amazon and that the president is “kind of talking through his hat.”
Clearly, while Trump screams “foul,” USPS, its employees, and even conservative third-party analysts tell a different tale. So, what’s new? Trump is simply ignorant, which has never stopped him and probably never will. I wonder if the fact that Jeff Bezos also owns the Washington Post has anything to do with Trump’s unbridled rants? Just sayin’.
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