It’s Time to Take Trump Seriously About Amazon

In March, President Trump sent out a tweet that accused online retail giant Amazon of paying little to no taxes to both local and state governments. He accused Amazon of using the United States Postal Service (USPS) to deliver its goods at a huge loss to the United States, adding that Amazon is putting thousands of small retailers out of business.

These concerns are not new. Trump has lambasted the company long before he became president. However, the feud between the president and Amazon has reached a new level of tension. Amazon’s stocks plummeted in the wake of the president’s tweets. And, President Trump does not seem to be ready to end his criticism anytime soon.

Critics of President Trump say that he is “obsessed” with the company because its CEO Jeff Bezos is connected with the Washington Post, which has criticized the president harshly on several occasions. However, this doesn’t mean Trump is wrong about the company. The deal that the company has that the United States Postal Service is a bad one for America and its taxpayers.

While it is true that the Postal Service as some serious financial problems and Amazon does help to offset some of those costs, the USPS does get the bad end of the deal when it comes to package delivery.

Amazon struck a deal with the USPS for the postal service to handle portions of its package deliveries. Amazon pre-sorts and prepares packages for delivery while the post office deliveries the packages to their final location.

As fewer and fewer Americans are sending letters, and more people are sending packages, it is evident that the USPS must focus on that aspect of its business to stay afloat in the future.

The USPS had to spend $200 million several years ago to furnish carriers with Internet-connected handheld scanners. These are needed for real-time package tracking. They also spent $5 billion to purchase new delivery vehicles. These costs were undertaken to directly serve the needs of Amazon and other package delivery needs.

The Postal Service improperly allocates its costs for package delivery, which resulted in a great deal for Amazon — but a poor one for the USPS. It is estimated that the USPS undercharges Amazon for delivery of packages by nearly $1.50 for each package.

The U.S. Postal Service has lost more than $65 million since 2007. It is expected to lose about $6 million more in 2018. The increase in parcel volume has coincided almost perfectly with the USPS’s deterioration in finances, according to CitiGroup, which analyzes the Postal Service finances.

The Postal Service is responsible for more than two-thirds of Amazon’s deliveries. Yet, it allocates just over 5.5 percent of its total costs to package delivery. This cost will only rise as technology increases and delivery schedules become more demanding as people expect next day and even same deliveries.

The postal service has run up more than $15 billion in credit since 2006, and has not paid any of its pension cost since 2011. The employees and taxpayers are on the hook for the sizable losses that are being incurred by the post office.

The Postal Service needs to add at least $1.46 to the price of its delivery charges. While President Trump’s critics may argue that he is attacking Amazon because of some personal vendetta, one cannot ignore the fact that Amazon has dealt a devastating financial blow to the Postal Service.

Trump just signed a surprise executive order to audit the United States Postal Service’s finances, which is appropriate given the fact that the USPS is so deep in the red.

A special task force was created by the president to look at the Postal Service’s finances, operation, pricing and delivery. It will also deeply examine the service’s business model.

It’s hard to argue that the Postal Service does need reform, and it seems that President Trump has taken a step in the right direction in spite of what critics say.

~ Conservative Zone


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23 responses to “It’s Time to Take Trump Seriously About Amazon”

  1. Agreed. Charge commercial postal services user what they really owe. Not just Amazon, all commercial accounts. Also, with the limited use of first class postage, raise the stamp cost to $1. Finally, remove the cost of living indexing imposed on the USPS.
    BTW, Priority mail is a fantastic service and beats both UPS, DHL and FedEx!

  2. The company lets the taxpayer pick up the tab for their cheap, really cheap delivery deal with the USPS. It is obvious the USPS like all government or quasi government agencies does NOT understand the idea of PROFIT or a BUDGET. Obviously for the post office just being busy other than delivering mail is what they seek. Hum? Can we find a more astute leader for this agency? I reminds me of the people who negotiated NAFTA or the multiple lousy trade deals with Iran, China, the Middle East, the orient in general, or Europe. Deals for PROFIT are the idea. And this is a disgusting theme we have seen for far too long with our hard earned taxes. And make no mistake the taxpayer is still picking up the tab for the USPS.

  3. Another important point is the sales tax not being collected by internet sales which is an important part of states funds for infra structure funding which is matched by federal funds. The sales tax also funds many important state cost such as education and etc. Local merchants collect sales tax and when they go out of business it is just a down hill spiral.

  4. You’re crazy! Amazon pays the same as everyone else in their class. Amazon in fact has saved the post office from going belly up. Wise up and stop licking Trumps butt. He’s mad at Jeff Bezos for having more money than him. Jealousy is what drives him

    • how the hell would YOU know what Amazon pays or other commercial clients?

      saved the post office from going belly up? imbecile! i suppose Amazon has saved the U.S. govt from going belly up too huh? smh

      jealousy is what drives the billionaire POTUS? yeah, right! hot air is what drives you

  5. Of course President Trump is right about Amazon. You can see mall and store closures all across the country – because it is cheaper and more convenient for shoppers to use Amazon. It’s called a free market – build a better mouse trap and the world will beat a path to your door. How many local hardware stores were closed down when Home Depot and Lowe’s came along? Many people have lost their jobs due to Amazon causing those store closures. A lot of people lost their jobs when the home computer came out too – automation both in factories and the stores are costing jobs as well. But aren’t all these things progress? When the world changes you have to change with it or get left behind.

  6. The local business has to pay rent, hire employees and make a contribution to the community to be successful.

    Amazon’s greatest inefficiency is the cost of unit package deliveries vs the local store replenishing stock by the case or truckload requires a lot of automation, slave-driven employees and cheap shipping costs.

    Some businesses have capitalized on Amazon services, other have crashed and burned. The time for equity in the system has come.

    POTUS has a handle on it. Let’s see where it goes. Yes, Jeff Bezos owns the WashPost and employs drones (columnists) to endlessly attack the President. I get the poison in my local paper every day. A totalitarian owning a major media outlet AND controlling the retail business is a danger to the country. He could grow up – we can pray for that.

  7. Carolyn,
    From reading the article I wouldn’t call the post office “saved” as you put it.

    “The postal service has run up more than $15 billion in credit since 2006, and has not paid any of its pension cost since 2011. The employees and taxpayers are on the hook for the sizable losses that are being incurred by the post office.”

  8. Raise the cost of a stamp to $1.00? Who’ll buy them? We can pay bills online, send greeting cards online, etc! IMO we’re getting close to seeing the demise of postage stamps now and raising them to $1.00 will only speed up that demise.

    /

  9. With the proliferation of Amazon’s doorstep delivery the USPS is not the Nation’s only infrastructure system, indirectly, being taken advantage of and abused by Amazon’s operations. All those delivered items must be packaged and that packaging is grossly increasing the tonnage of recycling/landfill waste being dealt with across the Nation.

    What is more, with Amazon’s venture into the food industry (i.e., including Whole Foods) they have correspondingly become a generator of tremendous food waste. In fact, “The Wall Street Journal” reporters: Heather Haddon and Laura Stevens, recently published an article on Amazon’s stonewalling if its investors’ request to; “outline its plans for mitigating the environmental impact and cost of wasted food.” In response (according to the article); “Amazon has petitioned the SEC to remove 15 shareholder-led resolutions from the list of proxies to be considered at its last two annual meetings, according to ISS Analytics, the data arm of Institutional Shareholder Services Inc. Only Exxon Mobil Corp. has challenged more proxy resolutions.”

    It appears to me President Trump’s inquiry into Amazon’s hijacking of USPS operations has merit and is not a blind passion-driven initiative.

  10. The above may be one if not most of the reason that the USPS is losing money, but the worst thing about Amazon is that they don’t have to charge state sales tax. It makes them uncompetitive with brick and mortar stores and are gypping the state government out of a much needed income.

  11. When small business companies are put out of business they no longer pay state and local fees which internet companies escape the regulatory compliance. The internet sales needs to be compliant under state and local regulations and pay their fair share.

  12. This story is so full of holes and incomplete information for the public that it’s sickening. I am a retired postal worker whose job it was to charge companies for their mass shipping and amazon gets no further breaks on postage then any other company.
    As far as the losses accrued by the post office they go back to congress passing a law that requires them to pre- pay the benefits for retirees 75 years in advance and to pay for it over a 10 year period. That’s pre-paying for people that aren’t even born yet. Around 2010 the congressional auditors found the post office was already pre-paid by 70 billion dollars but still refused to cancels the payments. This money is being paid in addition to the fact that the post office every year has to pay for all current retirees pension and benefits every year. Also congress continually has refuse to return any of the money to keep the post office operating at a profit because they already spent it on their own retirement as the money goes into the same account that pays their retirement benefits.
    Also the post office has had to restrict their increases in rates due to regulations that stop them from raising rates to compete with other companies. They are also required by law to keep the cheapest rates possible for books and advertisements for the media. If it wasn’t for that additional money required to be paid every year the post office actually would have made a profit almost every year. Some years may not have been by much but it still would have been a profit. As far as the scanners and vehicles that this article talks about those were expenses needed to continue to compete with UPS, FEDEX, and DHL as everyone wants to know where there package is when they order something.
    You also can’t blame just one political party over the other because neither of them have ever done anything to correct this mess. Also as far the taxes that some people are complaining about I can’t answer for those , I can say as an amazon user that anything that ships from the plant in my home state I have to pay taxes on.

  13. I guess the only consumers that have to pay sales tax are those that live in states that have Amazon Fulfillment Centers. There are 5 Amazon Fulfillment Centers in TN where I live, therefore Tennesseeans pay sales tax. That is typically the rule of thumb for any mail order companies.

    • We have no fulfillment centers in Iowa but have been paying sales taxes on everything bought from amazon for the past 2 years.

  14. Amazons shipping prices have really exculated. I couldn’t believe it when I ordered a $4.00 charewire for my Drill and the shipping was $8.95. Ridiculous. I didn’t order it. I have also noticed that the great deals we used to get are also gone.

    No longer a fan of Amazon. I will shop else ware

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