WASHINGTON (Reuters) – The United States postal service should have more flexibility to increase rates on packages, as recommended by a task force set up by President Donald Trump, which affects the profits of Amazon.com Inc. and others could be great online retailer. The working group was announced in April to find ways to stop the financial losses of the service, an independent authority within the federal government. His founding was followed by Trump's criticism that the post office Amazon did too much for too little money.
United States postal service letter Lakesha Dortch-Hardy ranks mail on November 29, 2012 in Chicago. The USPS, which relies on the sale of stamps and other products instead of taxpayers' money, has been struggling for years with high costs and falling letter volumes as consumers communicate more online. REUTERS / John Gress (UNITED STATES – Keywords: EMPLOYMENT OF SOCIAL BUSINESS)
The postal service lost nearly $ 4 billion in fiscal year 2018, ending September 30, even as parcel deliveries increased.
For more than a decade, it has lost money, the task force said, partly because the revenue from letters, bills, and other ordinary letters in an increasingly digital economy was not offset by increased revenues from an explosion of deliveries from online -Shopping.
The President repeatedly attacked Amazon for treating the Postal Service as a "delivery boy" by paying less than he paid for supplies and for the loss of $ 65 billion of service since the global financial crisis of 2007 to 2009 without providing evidence.
Jeff Bezos, founder of Amazon, also owns the Washington Post, a newspaper whose critical coverage of the president has repeatedly drawn Trump's wrath.
The fees charged by the postal service Amazon and other major customers are not published.
"None of our findings or recommendations relates to a company," a senior official said Tuesday.
Amazon shares closed 5.8 percent at $ 1,669.94, while eBay fell 3.1 percent to $ 29.26.
The Package Coalition, which includes Amazon and other online and catalog senders, warned against increasing the prices of their parcels.
"The Package Coalition is concerned that the Postal Task Force's package delivery recommendations would harm consumers, large and small businesses, and especially rural communities, by raising prices and withdrawing affordable delivery services," the group said in a statement E-mail statement.
Most Task Force recommendations, including possible price increases, can be implemented by the Agency. Changes, such as the frequency of mail delivery, would require laws.
The Task Force has given the postal service the power to charge market-based fees for anything that is not considered an essential service, such as the supply of prescription drugs.
BATH NEWS FOR AMAZON
"Although the USPS has price flexibility in its parcel delivery segment, parcels have not been rated in terms of profitability. The USPS should have the power to levy market-based pricing on both mail and consignments that are not considered "essential services".
That would be bad news for Amazon and other online sellers who send billions of packages per year to customers.
"If they go at market prices, this will definitely have a negative impact on Amazon's business," said Marc Wulfraat, president of logistics consulting firm MWPVL International Inc.
If prices rose by 10 percent, annual costs would increase Amazon by at least $ 1 billion, he said.
The task force also recommended the postal service
The postal service should also restructure the $ 43 billion of pre-financing it owes to the Postal Service's pension fund, the task force said.
Cowen & Co said in a May report, the Postal Service and Amazon is "co-dependent", but Amazon has gone to other places for most of the packages that would arrive quickly.
Cowen estimated that the Postal Service delivered approximately 59 percent of US parcels from Amazon in 2017, and that by 2023, parcel delivery could account for 50 percent of the postal service's revenue. "Recommendations would slow down the service, shorten delivery times, and privatize large parts of the public postal service. Most of the report's recommendations, if implemented, would penalize both businesses and individuals, "the union said in a statement.
Amazon, FedEx Corp. and United Parcel Service Inc. have not returned any comment requests.