PARCEL EXPRESS
Transportation Report
IN A REPORT ISSUED IN APRIL 2017, CHRISTIAN
Wetherbee, an analyst for Citigroup Inc., concluded that
the U.S. Postal Service (USPS) would have to raise its artificially low parcel rates by as much as 50 percent in order to
break even on its fast-growing parcel offerings. The biggest
question, Wetherbee wrote, was who or what would break
through the Washington inertia and “trigger” such a change.
Enter the president of the United States.
It is easy to dismiss Donald J. Trump’s April 12 executive
order creating a task force to analyze all of USPS’s operations as a political vendetta against Jeff Bezos, the owner of
The Washington Post—which has been on Trump’s toilet
list for years—and founder and CEO of Amazon.com Inc.,
the Seattle-based e-tailing goliath and USPS’s biggest parcel
customer. For months, Trump has pounded on the idea
that USPS virtually gives away its parcel services, citing
reports that it loses $1.50 on each Amazon shipment, a
claim considered by many to be dubious if not untrue.
It could be quite easily surmised that Trump would have
little, if any, interest in USPS’s financial condition if not for
the Bezos-Amazon-Washington Post connection. In addition, the executive branch has no daily pull over USPS. The
president’s role is limited to signing bills into law that affect
the quasi-governmental agency. The Postal Regulatory
Commission (PRC), created by Congress in 1970 to operate
as an independent entity, approves all USPS’s rate proposals. Changes in postal operations, from the closure of local
post offices to modification of USPS’s pension obligations,
are the province of Congress. The Postmaster General is
appointed by the PRC.
Yet the president is a “starting gun,” meaning most of
what he says or does has consequences. The executive
order, which requires Treasury Secretary Steven T.
Mnuchin, who has been appointed to lead the task force, to
report back to Trump with its recommendations within 120
days, could hasten what Wetherbee last year called a “day of
If the president’s goal is to hurt Amazon, he may want to think twice.
The unintended consequences of
Trump’s call for a USPS task force
