Proposed Postal Service reforms could hike package delivery costs

Cornelia Mascio
Dicembre 6, 2018

A task force created by President Donald Trump to evaluate ways to stem billions of dollars in losses at the U.S. Postal Service is suggesting a range of options, including proposals that could significantly boost the cost of sending non-essential mail.

The rates the Postal Service charges Amazon and other bulk customers are not made public.

He said the task force review ordered by Trump last April had produced recommendations that would "fulfill the president's goal of placing the USPS on a path to sustainability".

Amazon's founder Jeff Bezos also owns the Washington Post, a newspaper whose critical coverage of the president has repeatedly drawn Trump's ire. "The USPS should have the authority to charge market-based prices for both mail and package items that are not deemed 'essential services, '" the task force said in its report (PDF).

Cowen & Co, in a May report, said the Postal Service and Amazon were "co-dependent", but that Amazon went elsewhere for most packages that needed to arrive quickly.

Treasury Secretary Steven Mnuchin said the report "contains achievable recommendations".

Such changes may result in higher prices on package deliveries for online retailers, including e-commerce giant Inc.

"I have stated my concerns with Amazon long before the Election". Amazon did not immediately respond to a request for comment.

Mark Dimondstein, president of the American Postal Workers Union, charged that numerous recommendations in the report were based on "myth and misinformation" and that instead of improving mail services "would deliver higher prices and less service to the public".

The report recommends handing the postal service the ability to redefine the meaning of the so-called "universal service obligation", which is a mission statement laying out the scope of the organization's services. The Postal Service reported a loss of $3.9 billion for its 2018 fiscal year, which ended September 30 - the 12th straight year the service has reported a financial loss.

"The USPS's business model - including its governance, product pricing, cost allocation and labor practices - must be updated in light of its current operating realities", the report said.

"The Package Coalition is concerned that, by raising prices and depriving Americans of affordable delivery services, the Postal Task Force's package delivery recommendations would harm consumers, large and small businesses, and especially rural communities", the group said in an emailed statement.

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