US President Donald Trump formed a task force that is now scrutinizing US Postal Service operations, with proposals to overhaul the agency in order to restore some fiscal balance. The Postal Service has hit some major financial woes, and will certainly need some strategic positioning in order to recover. Thus, these proposals include new changes to how the agency prices packaging shipped by a retailer like Amazon, a company who seems to be frequently at the front of his attacks.
On Tuesday, the Treasury-led task force released a report that says the US Postal Service should price packages “with profitability in mind” which, apparently, involves the institution of higher postal rates on basic e-commerce goods and other post-distributed non-essential items.
President Trump originally commissioned this report earlier in the year, but only a few months after his first vocal attacks on Amazon over, what he considers to be, ripping USPS; treating the agency like its very own “Delivery Boy.” Trump even went so far as to accuse Amazon CEO Jeff Bezos—who also privately owns The Washington Post—of conflating the newspaper’s coverage of Amazon, which is unfair; calling the Bezos internal relationship the “Amazon Washington Post”.
Looking more closely at the report, we can see that the recommendations are actually quite broad. The report calls for stronger Postal Service Board of Governor’s oversight; which actually makes sense as this Board has been basically empty for the most of Trump’s occupation of the Oval Office. The report also calls for the agency to take into consideration other forms of revenue which could include renting out unused real estate to other businesses as well as charging outside shipping agencies for access to mailboxes. The report also mentions issuing hunting and fishing licenses as another revenue stream option.
While all of these are certain ideas that the struggling agency could consider, it is the package rate hike proposal that is likely to receive much—if not all—of the scrutiny.
To put this into perspective, the USPS reported the fiscal year 2018 results with an overall volume decline of 3.2 billion pieces. More importantly, they reported a net loss of $3.9 billion for the fiscal year. While revenue was up $1 billion year-over-year, the increase has been mostly due to shipping and packaging; and that sector showed a revenue growth rate of 10 percent year-over-year.