Amazon’s profits may hurt by Postal Task Force recommendation

Amazon’s profits may hurt by Postal Task Force recommendation

47
0
SHARE

Task force of President Donald Trump has recommended that to increase the rates for its packages, the United States Postal Service should have to be more flexible and if become effective it would be affecting the profits of large online retailers like Amazon.com Inc, who use USPS for delivery of their products.

In quest of finding ways to pause the financial losses of USPS, an independent agency of federal government, after following a criticism by the President upon it for charging Amazon comparatively very less against the provided services, a task force was set up by the Trump’s government in April.

Despite enjoying the rise in packages deliveries, in fiscal 2018 ended on September 30, the Postal Service faced loss of about $4 billion.

The task force pointed out that for more than a decade, the Postal Service has been losing the opportunity to offset the sufferings of revenue losses, in an increasingly digital economy, caused particularly due to decline in bills, letters and other ordinary mail with the increasing revenue from boosting deliveries of online shopping.

The President without mentioning evidence has been repeatedly holding Amazon responsible for contributing to the losses of $65 billion of the Postal Service since the global financial crisis of 2007 to 2009. He also termed the Postal Service as “delivery boy” for being under paid by the Amazon for delivering its services of online shopping.

But a senior administration official said on Tuesday “None of our findings or recommendations relate to any one company”.

Till now the rates have not been made public which the Postal Service has been charging to Amazon and other bulk customers.

Amazon and other catalog and online shippers through their Package Coalition has warned against any move of rising prices by the Postal Service for their package deliveries.

The Package Coalition is concerned that, by raising prices and depriving Americans of affordable delivery services, the Postal Task Force’s package delivery recommendations would harm consumers, large and small businesses, and especially rural communities,” the group said in an emailed statement.

For the non essential services like prescription drug delivery, task force has recommended the Postal Service as authorized to charge market-based rates for such deliveries.

SHARE
Previous articleIKEA opening Planning Studio in Mahattan by Spring
Next articleWall Street Show Strong Recovery At The End
I handle much of news coverage for tech stocks, and occasionally cover companies in different sectors. In the past, I've written for other financial sites and published independent investment research, primarily on tech companies. I have a B.A. in Economics from Columbia University. I'm based out of San Diego, but grew up in Southern New Jersey. I play basketball and tennis in my spare time, am a long-time (and long-suffering) fan of Philadelphia's sports teams, and alternate daily between using an iPad Air, a Galaxy Note 3, and one or two Windows PCs.

NO COMMENTS

LEAVE A REPLY