WASHINGTON – President Donald Trump has personally pushed U.S. Postmaster General Megan Brennan to double the rate the Postal Service charges Amazon.com and other firms to ship packages, according to three people familiar with their conversations, a dramatic move that probably would cost those companies billions of dollars.
Brennan has so far resisted Trump's demand, explaining in multiple conversations occurring this year and last that these arrangements are bound by contracts and must be reviewed by a regulatory commission, the three people said. She has told the president that the Amazon relationship is beneficial for the Postal Service and gave him a group of slides that showed the variety of companies, in addition to Amazon, that also partner for deliveries.
Trump has continued to level criticism at Amazon. And last month, his critiques culminated in the signing of an executive order mandating a government review of the financially strapped Postal Service that could lead to major changes in the way it charges Amazon and others for package delivery.
Few U.S. companies have drawn Trump's ire as much as Amazon, which has grown to be the second-largest U.S. company in terms of market capitalization. For more than three years, Trump has fumed publicly and privately about the giant commerce and services company and its founder Jeff Bezos, who is also the owner of the Washington Post.
Trump alleges Amazon is being subsidized by the Postal Service, and he has also accused the Post of being Amazon's "chief lobbyist" as well as a tax shelter — both false charges. He says Amazon uses these advantages to push brick-and-mortar companies out of business.
The three people familiar with these exchanges spoke on the condition of anonymity because they were not authorized to discuss the White House's internal deliberations.
Brennan and Trump have met at the White House about the matter several times, beginning in 2017, and most recently four months ago, the three people said. The meetings have never appeared on Trump's public schedule.
Clouding the matter even further, Trump's aides have also disagreed internally about whether Amazon is paying enough to the Postal Service, with some believing the giant commerce company should be paying more, while others believe that if it weren't for Amazon, the Postal Service might be out of business, according to the three people.
Trump has met with at least three groups of senior advisers to discuss Amazon's business practices, probing issues such as whether they pay the appropriate amount of taxes or underpay the Postal Service, according to the sources.
The White House, the Postal Service and Amazon — as well as Bezos, via an Amazon spokesman — declined to comment for this report.
Details of Amazon's contract with the Postal Service are secret for competitive reasons, making it difficult for financial experts to assess claims about the relationship. Amazon said it spent $21.7 billion on shipping costs in 2017, a figure that includes sorting, delivery center and transportation costs. Roughly 40 percent of its packages are delivered by the Postal Service, according to some analysts, a figure neither Amazon nor the Postal Service has confirmed.
The Postal Service, meanwhile, reported shipping and package income of $19.5 billion last year, an 11.8 percent increase from one year before. This increase wasn't enough to stop the Postal Service from losing money for the eleventh straight year. That's largely because of the continued decline in first-class mail, and expensive health benefit costs that the Postal Service must set aside for future retirees, according to agency data.