Jeff Bezos Amazon
Donald Trump opened up a new chapter in his running feud with Amazon CEO Jeff Bezos on Friday, saying the United States Postal Service should be charging the online shopping giant more for shipping.

'Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer?' the president asked on Twitter.

'Should be charging MUCH MORE!'

Trump's jab at Amazon's bottom line is a continuation of his longstanding battle with Bezos, who also owns The Washington Post.

The Post, one of the newspapers Trump most loves to hate, has drawn his ire since early in his presidential campaign for generating negative coverage of the Republican.

The USPS has posted losses for 11 straight years, largely on the basis of gigantic legacy pension and health care costs.

And while online shopping has led to growth in its package-delivery business, fewer Americans send letters via first-class mail every year.

Federal regulators moved recently to allow bigger jumps to stamp prices beyond the rate of inflation, which could eventually increase companies' shipping rates.

Amazon, on the other hand, has the markings of an unstoppable juggernaut - and one analysis shows that the Postal Service is giving it a free ride.


An April report from Citigroup found that the fast pace of change in the shipping business has left the USPS struggling to allocate its expenses correctly.

Bureaucrats have fixed the share of infrastructure costs associated with packages at a 5.5 per cent, but package shipments now make up 25 per cent of the USPS's business.
Amazon USPS shipping
Although the USPS spends 25 per cent of its infrastructure costs dealing with package delivery, a bureaucratic bungle has resulted in the service only figuring in 5.5 per cent โ€“ giving shippers like Amazon the equivalent of a $1.46 subsidy on every package shipped
Factoring in the actual expenses associated with delivering more packages than their price model allows for, boxes should cost postal customers $1.46 more than they do, on average - building the equivalent of a government subsidy into the final price.

'It is as if every Amazon box comes with a dollar or two stapled to the packing slip - a gift card from Uncle Sam,' a Wall Street Journal commentator wrote in June.

Amazon acquired Whole Foods Markets in August, pushing its third-quarter revenue to $43.7 billion.
Amazon prime shipping
Amazon's 'Prime' service offers year-long two-day shipping for a fixed discount price, creating a loss-leader that Amazon has been able to partially offload on shipping companies.
Amazon's stock price has jumped by 23 per cent in the past 90 days.

Yet the company continues to see shipping as a loss-leader, reporting that it lost $7.2 billion shipping packages in 2016.

Customers can receive free two-day shipping on most items by paying for a $99 annual 'Prime' membership. Some of those packages arrive via USPS but many are sent through UPS and FedEx.

Even with the cost of shipping, Amazon posted an overall profit of $2.4 billion in 2016, up from $596 million a year earlier.