The already frosty relationship between President Donald Trump and Amazon.com overlord Jeff Bezos plunged to a new low on Friday.
Trump trained his weaponized Twitter account on Amazon by pointing out that the United States Postal Service is getting “dumber and poorer” while making Bezos richer than King Midas thanks to giving the online mega-retailer a break on shipping costs.
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!
— Donald J. Trump (@realDonaldTrump) December 29, 2017
The Hill reports:
President Trump insisted on Friday that the U.S. Postal Service should be charging online retailers, like Amazon, more to deliver packages, saying the service’s cheap delivery rates were making it “dumber and poorer.”
“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!” he tweeted.
Trump’s tweet came after “Fox & Friends” aired a segment about technology trends expected in 2018. Among them was Amazon’s bet on augmented reality, which would reportedly allow online shoppers to see how products would look in their homes before making a purchase.
Trump is referring to the subsidy that the USPS is providing to Amazon that deprives it of a staggering amount of money that continues to be lost as Bezos’ baby continues to expand and consumers become more accustomed to the convenience of shopping from home. If they have a Prime membership, they can even get some of their merchandise delivered the same day in certain areas.
Earlier this year, Fortune magazine compared the special rate to a “gift card from Uncle Sam” in story that cited an analysis by Citigroup, “This Analyst Claims the U.S. Postal Service Is Giving Amazon a Huge Subsidy”:
[S]hipping industry watcher and money manager Josh Sandbulte thinks there’s an ugly underside to the USPS-Amazon collaboration. Sandbulte, writing in the Wall Street Journal last week, argued that the USPS effectively subsidizes the price of shipping Amazon’s packages.
According the Sandbulte, Congress has barred USPS from setting its parcel prices below its costs, to keep it from unfairly undercutting competitors like FedEx and UPS. But the formula for calculating those costs, set in 2006, hasn’t kept pace as packages have come to make up a higher and higher percentage of USPS volume. The law set the share of infrastructure costs associated with packages at 5.5%, but boxes now make up around 25% of Postal Service revenue.
Sandbulte cites an April analysis by Citigroup that put a price tag on the resulting distortion. If package delivery bore its fair share of Postal Service system costs, each box would cost $1.46 more to deliver. That “subsidy” is systemwide, and the USPS has courted other large e-commerce companies.
But Amazon’s size means that it benefits disproportionately, and ships around 40% of its deliveries with USPS. In Sandbulte’s view, this means the Postal Service is “picking winners and losers in the retail world.”
In a rapid response to Trump’s tweet, Bloomberg was quick to point out that:
Amazon regularly uses the U.S. Postal Service to complete what’s called the “last mile” of delivery, with letter carriers dropping off packages at some 150 million residences and businesses daily.
While full details of the agreement between Amazon and the Postal Service are unknown — the mail service is independently operated and strikes confidential deals with retailers — David Vernon, an analyst at Bernstein Research who tracks the shipping industry, estimated in 2015 that the USPS handled 40 percent of Amazon’s volume the previous year. He estimated at the time that Amazon pays the Postal Service $2 per package, which is about half what it would pay United Parcel Service Inc. or FedEx Corp.
The Postal Service reported a net loss of $2.1 billion in the third quarter of 2017 and has $15 billion in outstanding debt. The service has lost $62 billion over the last decade.
Liberals will rush to attack Trump with breakneck speed even if he is correct because Bezos is one of them.
In addition to Amazon, Bezos owns the virulently anti-Trump Washington Post, a sleazy propaganda organ that specializes in fake news based on anonymous sources and has been living off of its reputation since Watergate. No amount of Tom Hanks-Meryl Steep Hollywood magic is going to change the fact that WaPo is no longer a credible source for news despite their silly, melodramatic “Democracy Dies in Darkness” slogan.
To the left and especially the woebegone and morally-bereft Democrats, it matters not one bit whether the taxpayers are being fleeced by a cunning operator like Bezos. It’s all about resistance to Trump, and screw the American taxpayers because the blue jackass party has made it perfectly clear that it cares nothing about them.
Oh, and Amazon stock was slightly down after Trump’s tweet.