President Trump Orders Postal Service Finances Investigation; Attacks ‘Sweetheart’ Amazon Deal

In the continuing escalation in his attack on Amazon, President Donald Trump issued an executive order yesterday for the establishment of a federal task force, led by Treasury Secretary Steven Mnuchin or his designee, to investigate the finances of the U.S. Postal Service (USPS), which has lost more than $65 billion during the past 11 consecutive fiscal years. The special commission is expected to submit a report on its findings and recommendations within 120 days.

President Trump has frequently complained that the USPS continues to lose money, in part, due to a “money-losing” bulk rate delivery contract it has with Amazon to deliver packages. Amazon is primarily using the Postal Service and its letter carriers for the “Last Mile” delivery of packages to an estimated 150 million homes and businesses, including on Sundays.

“It shall be the policy of my administration that the United States postal system operate under a sustainable business model to provide necessary mail services to citizens and businesses, and to compete fairly in commercial markets,” Trump wrote in the executive order. “The USPS is on an unsustainable financial path and must be restructured to prevent a taxpayer-funded bailout.” The executive order calls for an examination of USPS policies, pricing and workforce costs, and will recommend reforms.

According to one report in Reuters, Wall Street analysts estimate that Amazon pays the USPS roughly half what it would be required to pay UPS or FedEx to deliver a package. UPS and FedEx also maintain negotiated contracts with the Postal Service for “Last Mile” delivery services. And Amazon is in the process of building its own delivery network.

Some pundits argue that President Trump’s tweets against the online retail juggernaut are politically driven, given that Amazon CEO Jeff Bezos also owns the Washington Post, which has been highly critical of Trump and his policies. Trump’s ongoing public statements and tweets against Amazon, and how the online retailer is destroying the traditional brick-and-mortar retail industry, have negatively impacted Amazon’s stock price.

The main drag on USPS finances, in reality, has been the mandate that it pre-fund its retiree health care obligations to the tune of more than $38 billion. For the first time, last year the Postal Service missed payments it owes to the federal retirement system, for a combined total of $6.9 billion.

Last month, a bipartisan “Postal Service Reform Act of 2018” bill was co-sponsored by senators Tom Carper (D-Del.), Jerry Moran (R-Kan.), Heidi Heitkamp (D-N.D.) and Claire McCaskill (D-Mo.). If passed, the Senate legislation would make sweeping changes to current rules and regulations. Among them, the passage of the postal reform bill would eliminate the existing statutory pre-funding payment schedule, cancel any outstanding payments and amortize future payments over 40 years. (Click here for more detailed explanation of the bill, and the subsequent response it received from printers and mailers.)
more at:  http://www.piworld.com/article/president-trump-orders-postal-service-finances-investigation-attacks-sweetheart-amazon-deal/#ne=d7f0e6e16b0d037f71fc050491da5623&utm_source=today-on-piworld&utm_medium=newsletter&utm_campaign=2018-04-13

Related Posts

Amazon.com Announces First Quarter Results

*Operating cash flow increased 69% to $67.2 billion for the trailing twelve months, compared with $39.7 billion for the trailing twelve months ended March 31, 2020. *Net sales increased 44% to $108.5 billion in the first quarter, compared with $75.5 billion in first quarter 2020. Excluding the $2.1 billion favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 41% compared with first quarter 2020. *Operating income increased to $8.9 billion in the first quarter, compared with operating income of $4.0 billion in first quarter 2020. *Net income increased to $8.1 billion in the first quarter, or $15.79 per diluted share, compared with net income of $2.5 billion, or $5.01 per diluted share, in first quarter 2020.

USPS Reports Consistent Service Across All Mail Categories

The U.S. Postal Service provided updated third quarter service performance data through the week of June 25th which shows consistent and improved delivery performance across all First-Class, Marketing and Periodical mail categories since the second quarter. Performance numbers below include the weeks of April 1 through June 25: *First-Class Mail: 87.5 percent of First-Class Mail delivered on-time against the USPS service standard, a more than 9 percent increase over the second quarter. *Marketing Mail: 90.9 percent of Marketing Mail delivered on time against the USPS service standard, a nearly 6 percent increase over the second quarter. *Periodicals: 79.2 percent of Periodicals delivered on time against the USPS service standard, a nearly 8 percent increase over the second quarter.

Bertelsmann Expands Global Network of Start-ups

Bertelsmann has further expanded its global network of start-up investments. Last year, the international media, services and education group made more than 70 investments worldwide, through the funds bundled in its Bertelsmann Investments division. At the same time, the company completed a number of exits, and profits from the disposal of these investments – most notably by the Bertelsmann Asia Investments (BAI) fund in China – made an appreciable contribution to Group net income. Overall, at the end of the year Bertelsmann had holdings in more than 160 innovative start-ups and investment funds. Thomas Rabe, Chairman and CEO of Bertelsmann, said: “Investments in young digital companies with innovative business models play an important role in the implementation of our strategy. With these investments, we ensure the transfer of knowledge, about digital trends that support us in the transformation, as well as about promising markets. We have massively expanded our network of start-up holdings in recent years, especially in our strategic growth regions of China, India and Brazil, and have repeatedly demonstrated that we are an ideal partner for innovative founders who want to expand their activities.” Click Read More below for additional information.
Back To Top
×Close search
Search