President Donald Trump on Monday doubled down on his criticism of the U.S. Postal Service's arrangement with Amazon, saying he would change how much the country's largest online retailer pays in shipping fees.
"Only fools, or worse, are saying that our money losing Post Office makes money with Amazon," he tweeted Monday morning. "THEY LOSE A FORTUNE, and this will be changed."
The tweet marked the third time since Thursday that Trump has lashed out against Amazon.
The retailer's stock closed down 75.35 points to 1,371.99, a drop of 5.2 percent.
Last week he attacked the retailer for paying "little or no taxes to state & local governments" and said the company uses "our Postal System as their Delivery Boy (causing tremendous loss to the U.S.)."
Two days later, he asserted that the Postal Service loses an average of $1.50 on each Amazon delivery. "This Post Office scam must stop. Amazon must pay real costs (and taxes) now!" he tweeted.
Amazon collects local taxes in the 45 states that require it, although third-party sellers using the Amazon site may have other arrangements.
Trump also incorrectly said The Washington Post is a lobbyist for the retailer. (The Post is owned by Jeff Bezos, the founder and chief executive of Amazon. It operates independently of Amazon.)
Amazon and the Postal Service declined to comment on Trump's tweet Monday morning.
Amazon regularly uses the 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. It has a network of more than 20 "sort centers" where customer packages are sorted by ZIP code, stacked on pallets and delivered to post offices for the final leg of delivery.
Citigroup also said that the "true" cost of shipping packages for the Postal Service is about 50 percent higher than its current rates, leading some editorial writers to conclude that Amazon was receiving the type of subsidy cited in Trump's Thursday tweet.
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But the Postal Service's losses have little to do with Amazon and more to do with its large health-care obligations and the dwindling use of first-class mail. The post office charges some of the world's lowest stamp prices.
The president's tweet also assumes that Amazon would be forced to pay if the Postal Service increased its rates for packages. But Amazon has been setting up its own shipping operations in the U.S. and elsewhere in the world to minimize costs.
Under a new service being rolled out this year, Amazon would oversee the pickup of packages from warehouses of third-party merchants and delivery to home addresses.
The Postal Regulatory Commission, an independent federal agency, oversees the Postal Service's pricing structure and annually reviews its contract with Amazon.
Amazon does receive a discount from the Postal Service, though the details of that arrangement have not been disclosed. An independent regulator reviews the contract every year to make sure that it continues to be profitable for the Postal Service.
Although Monday's tweet was the first time the president implied that he would try to change how much the Postal Service charges Amazon, he has railed against its pricing structure in the past. In December, Trump attacked the company's arrangement with the service and said the agency should raise the shipping rates it charges Amazon.
"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?" he tweeted. "Should be charging MUCH MORE!"
A fast rise in parcel deliveries -- many of them from Amazon -- has helped offset some of the Postal Service's losses in recent years. In 2017, the Postal Service delivered 589 million more packages than it did a year earlier, amounting to an 11.4 percent growth in volume and $2.1 billion increase in revenue.
Information for this article was contributed by By Ros Krasny, Justin Sink, Spencer Soper and Gerrit De Vynck of Bloomberg News.
Business on 04/03/2018