Amazon, USPS deal profitable
Despite Trump’s hostile stance, service seen as a bright spot
The US Postal Service has repeatedly said it doesn’t lose money on the Amazon accord.
By Ben Brody, Bloomberg News

President Trump has frequently assailed the pricing agreement between Amazon and the US Postal Service. Yet the deal has repeatedly been described as a money-maker for the beleaguered agency.

Trump — who faces accusations from Democrats that funding cuts and operational changes at the post office are meant to stop mailed votes for Democratic challenger Joe Biden from being counted — claimed in an interview with Fox News on Monday that Amazon is “maybe the biggest problem with the post office’’ because of the losses that the service takes on package deliveries.

USPS has been losing billions of dollars a year for more than a decade as people use e-mail and other online services to correspond, in addition to its onerous pension obligations.

But its commercial package delivery service, which includes agreements with companies such as Amazon, FedEx, and United Parcel Service Inc., is lucrative, the post office and lawmakers have said.

Terms of the Postal Service’s delivery deal with Amazon are confidential, however USPS has repeatedly said it doesn’t lose money on the agreement. In addition, the post office must cover its costs in its commercial package delivery business under the law. Amazon regularly uses the postal service to complete what’s called the “last mile’’ of delivery.

In fact, shipping and packages have been the only growth segment for the Postal Service and jumped more than 50 percent to $8.3 billion in revenue in the third quarter, which ended June 30, according to fiscal 2020 results released Aug. 7. Every other service category fell in both revenue and volume, in part due to the coronavirus pandemic. The pandemic drove up costs, including for personal protective equipment and paid sick leave, contributing to a net loss of $2.2 billion in the period, roughly in line with the year before.

Trump claimed in the interview, without showing evidence, that the Postal Service loses about $3 per package with Amazon. He had previously claimed the loss was $1.50.

“They take a lot of this mail into areas where they could never go because the postal system is massive,’’ he said. Amazon is dropping “packages into the post office by the thousands.’’

Spokesmen for USPS and Amazon didn’t comment on Trump’s allegations.

Back in 2018, when Trump repeatedly blamed the deal for the post office’s woes, two top Democratic lawmakers who said they reviewed the deal with Amazon, declared that retailers shipping packages represented a rare bright spot for the Postal Service. The agreement with Amazon and other retailers has been “one of the few areas of growth in Postal Service revenues, experiencing double-digit increases in recent years and accounting for nearly 30 percent of its operating revenue in fiscal year 2017,’’ according to a letter led by the late Representative Elijah Cummings in June 2018.