Trump's fight against Amazon is looking bleak as a major USPS partner ditches the post office in hopes to work with the e-commerce behemoth

  • The US Postal Service lost a big partner this week when terminated their long-standing exclusive arrangement with the postal service.
  • In the call in which he announced the end of the partnership, CEO Ken McBride praised Amazon’s delivery network.
  • It’s a major loss for President Donald Trump’s long-standing feud against Amazon founder Jeff Bezos. Among other sentiments, Trump has accused Amazon of swindling the USPS.

The long-standing e-commerce partner of the US Postal Service dumped the post office this week. CEO Ken McBride is instead going all in on FedEx, UPS, regional delivery services, Uber Delivery, and others. But Amazon takes the cake when it comes to innovation in shipping during the e-commerce era, McBride told investors on a call Thursday evening.

“Amazon has an amazing network they built worldwide despite only having 27 going to 40 planes,” McBride said. “And they built it in the last few years and they have built it with e-commerce in mind and a lot of the other carriers have networks that are much older.”

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It’s becoming clearer than ever that Amazon is developing a 3rd-party logistics service to edge out FedEx and UPS now that has dumped USPS

It’s hardly the first time Amazon, which filed as a transportation company earlier this month, has flare-ups with USPS. Last year,President Donald Trump railed for months against Amazon’s use of USPS for delivering parcels. He said Amazon was cleaning up by shipping goods with the post office’s low costs.

“Amazon has the money to pay the fair rate at the post office, which would be much more than they’re paying right now,” Trump told reporters last year. Trump has often made public his distaste with Amazon.

Indeed, USPS lost $US3.9 billion in fiscal year 2018, according to a December 4 report from the Task Force on the United States Postal System. Its cumulative losses are nearing $US70 billion.

Read more:
USPS is haemorrhaging billions of dollars a year and it might sell the rights to your mailbox to turn a profit

That’s hardly because of Amazon, though. A larger contributor to the post office’s woes is a 2006 law passed underPresident George W. Bush surrounding prefunding retirement benefits. That law required USPS to determine how much it would spend on pensions over the next 75 years and quickly build up a fund to cover all of it.

According to USPS’ inspector general, the new requirement to prefund retiree benefits accounted for $US54.8 billion of the agency’s $US62.4 billion loss incurred between 2007 and 2016.

Still, ending its exclusive partnership with USPS is likely to be a major loss. As the post office’s e-commerce partner, generated $US586.9 million in revenue in 2018, an uptick of 25% from 2017.

Right now, works with Amazon in Australia and the UK. McBride said he wants to expand that relationship to the US in 2019.

Whatever the cause of USPS’s financial woes, the move from to end its partnership with USPS is a clear warning for the anti-Amazon battle Trump is waging – and Trump’s war against its founder, Jeff Bezos (who he sometimes calls “Jeff Bozo“).

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