- President Donald Trump continues to slam Amazon, arguing that the company is financially hurting the United States Postal Service.
- He blames the USPS’ declining financials on an increase in package delivery from Amazon’s booming e-commerce business.
- No matter how the Trump administration regulates Amazon, the USPS will likely not survive in its current form – a quasi-government run agency with a democratic mission to deliver mail in every American town and city.
- When the country’s official postal service was founded in 1792, it could’ve never anticipated the creation of the internet (and Amazon). Treating the USPS like a traditional business conflicts with its civic mission.
Amazon is “costing the United States Post Office massive amounts of money for being their Delivery Boy,” he tweeted on Tuesday, continuing, “Amazon should pay these costs (plus) and not have them bourne by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!”
It’s unclear whether Amazon is directly to blame for USPS’ struggling finances. As Business Insider’s Kate Taylor notes, the USPS’ business model is likely unsustainable in its current form, largely because it relies on stamp sales for much of its revenue.
The postal service, however, was doomed financially from the start. And that has a lot to do with the democratic purpose it sought to serve in cities across the US.
In 1792, the Post Office Department (USPOD) was established with a far-reaching civic goal to spread information freely across all states. That year, the national Postal Act mandated lower prices for newspapers, forbade postal workers to open private mail, and encouraged Congress to create postal routes. The Postal Policy Act of 1958 further cemented the USPS’ mission to promote the “social, cultural, intellectual, and commercial intercourse” in every American town and city (and that the general treasury should assist the USPS as necessary). The service flourished throughout the 19th and most of the 20th century (before the internet).
While there was no one catalyst for the USPS’ plummet, the nation’s shift from physical mail to email was a big contributor. The service’s letter-delivery revenue had long subsidized its package deliveries, but following the internet boom people started sending fewer letters. The USPS has taken a huge hit.
Many economic and political analysts said we should prepare the USPS’ grave long before Trump began slamming Amazon. The service’s revenue has declined by $US5.1 billion in the past decade. And in February, the USPS posted a net loss of $US540 million in the first quarter of 2018.
Even if the Trump administration set new regulations on Amazon, the USPS will probably still struggle, because the quasi-government run agency was never meant to operate as a profits-focused retailer. Unlike its competitors UPS and FedEx, the USPS has built so many locations that it’s able to offer “last-mile” delivery, an expensive service that traditional retailers would lose money on if they did it themselves. The USPS now has a monopoly on letter delivery and more domestic locations than McDonald’s, Starbucks, and Walmart combined.
Similar to public plazas and mass transit, the USPS’ first priority is to serve civilians. It’s also notoriously hard for cities and states to not lose money from maintaining subways and publicly owned parks, which is why those services are heavily subsidized by tax dollars and user fares. The USPS does not receive federal money, but Congress still controls the service’s budget and operations.
“It is supposed to compete and innovate but it is stifled by law and saddled with a governance structure that impedes innovation,” she writes, arguing that the USPS should break up into two separate entities. One would be private – “defined in a way that meets the reality of the information age” – and the other would be public.
While USPOD could’ve never anticipated email, Amazon Prime, and Cyber Monday, it’s unclear if the modern-day USPS will be able to preserve its original, civic mission in the 21st century.