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Government The Almighty Buck United States

Trump Threatens To Block Aid For US Post Office If It Does Not Raise Prices (reuters.com) 292

An anonymous reader quotes a report from Reuters: President Donald Trump on Friday threatened to block federal aid for the U.S. Postal Service unless it raises shipping rates for online companies like Amazon.com, prompting criticism that the move would hurt consumers relying more than usual on packages during the coronavirus outbreak.

The president has long accused the post office of charging too little for packages, saying that deliveries for Amazon and others cost the service money. Amazon founder and CEO Jeff Bezos owns the Washington Post newspaper, which Trump has accused of unfair coverage of his administration. "The Postal Service is a joke. Because they're handing out packages for Amazon and other internet companies, and every time they bring a package, they lose money on it," Trump told reporters in the Oval Office. "The Post Office should raise the price of a package by approximately four times." The president also accused post office officials of being "very cozy" with big online merchants.
With the U.S. Postal Service slated to run out of money this summer, the U.S. Congress authorized the Treasury Department to lend it up to $10 billion as part of an earlier $2.3 trillion coronavirus stimulus package. Treasury Secretary Steven Mnuchin said his team was meeting with post office officials "and actually, we are going to put certain criteria for a postal reform program as part of the loan."

Trump told Mnuchin at the event he would not support aid unless the postal service raised its rates. "If they don't do it, I'm not signing anything and ... I'm not authorizing you to do anything," Trump said. Later on Friday, Trump said: "I will never let our Post Office fail. It has been mismanaged for years, especially since the advent of the internet and modern-day technology. The people that work there are great, and we're going to keep them happy, healthy, and well!"
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Trump Threatens To Block Aid For US Post Office If It Does Not Raise Prices

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  • by Methuselah2 ( 1173677 ) on Friday April 24, 2020 @10:39PM (#59987786)
    Both FedEx and UPS must be delighted at the prospect of the USPS increasing prices!
    • by Actually, I do RTFA ( 1058596 ) on Saturday April 25, 2020 @01:09PM (#59989632)

      FedEx and UPS make tons of money shipping to rural areas. But they drop off packages at the local post offices and have them do the financially unprofitable work of teh last few miles. This would raise their costs dramatically.

      Never forget that the USPS is suffering financially for several reasons, but one is that they serve *every* American with pretty damn good service.

  • More Trumpster Dumpster nonesense:

    https://www.politifact.com/fac... [politifact.com]

    • Re: (Score:2, Interesting)

      by uvajed_ekil ( 914487 )

      More Trumpster Dumpster nonesense:

      https://www.politifact.com/fac... [politifact.com]

      And, of course, if the postal service raised prices as much as that moron suggests, that would be even more incentive for Amazon to ramp up their own delivery service, and for us to choose FedEx and UPS more often. Their volume would plummet, and they'd be forced to lay off staff and close under-performing (read rural) offices. If you want to kill off the USPS, dramatically raising parcel rates is a good way to start. It takes a real idiot to single out "internet companies" in 2020.

  • It is basically cheaper to order a product from China than from North America because China subsidizes their shipping. At that point, why bother to order the product from a shop in North America? It is a good idea if (North) America subsidizes shipping as well because it can help us salvage what is left of our feeble manufacturing industry. However, there is the likes of Amazon and Walmart who get orders of magnitude cheaper shipping (not to mention their massive subsides) than the average mom and pop shop
    • It is basically cheaper to order a product from China than from North America because China subsidizes their shipping.

      Its deeper than that.

      When you mail something from country C to country A, you only pay the fees of country C to deliver it. Countries have agreements similar to internet routing's "settlement free peering."

      Now, even without government-funded subsidy, if more mail goes from C to A than from A to C, then C wins and A loses with regard to carrier economics.

      One could argue that the people living in A benefit by getting packages that they want, and fair enough, but nobody has paid for the delivery of thos

      • It makes sense if shipping from country A to country A is cheaper than country C to A, because country C is far, far away. Country A is local. If I want a hard drive, I get it from country C instead of country A because C has the cheaper shipping. This puts another nail in the coffin of business located in country A--even though it is RIGHT THERE, get it? So if you have cheaper shipping in country A, then it is likely to get the sale. Also, maybe you can help country A get into the international market by h
      • by gmack ( 197796 )

        3) end the settlement free delivery agreements so that those that get these deliveries pay the actual cost of them.

        Now why is it that #3 is never discussed?

        Mainly because there is an international agreement regarding postal rates and getting that changed is a whole bureaucratic process involving committees and a vote by all involved countries

  • by Anonymous Coward on Friday April 24, 2020 @10:41PM (#59987792)
    This has nothing to do with the USPS, it has to do with the fact that Bezos has more money than Trump, Bezos owns the WaPo (which rips Trump a new one practically on a daily basis), and fuck America and fuck American citizens and what they need, Donny needs to take another poke at Bezos to assuage his delicate ego. FFS I don't even like Bezos much myself, I think he's a rich asshole who has so much money he isn't even really human anymore, but shit Trump does in his middle-school feuds with people like Bezos just hurts everyone because he's the goddamned PRESIDENT and should fucking behave better than that!
  • by stikves ( 127823 ) on Friday April 24, 2020 @10:51PM (#59987832) Homepage

    It looks like they are trying to avoid a "good crisis to go to waste". The issues are mixed, and they are actually not directly related to each other:

    1. Post office loses money, on paper, because of the mandate to prefund all future retirement accounts, fully. There is no other enterprise on Earth that does remotely the same thing

    2. This is actually a good thing for the long term strength of USPS. But I am not sure it was the goal when the rule was enacted.

    3. Post office makes money from Amazon and bulk mailers. Because the postal worker needs to make the route, in case they need to pick up the occasional mail, and it is better to earn some money than none.

    4. Post office has competitive prices, but if they raise any further they will lose business. Amazon had already started their own local deliveries, and FedEx Home is sometimes cheaper. Raising prices would backfire and *reduce* the revenue.

    5. The China issue... It is complicated, but they can sell a product, including shipping for a lower cost than the domestic postage price here. It is some archaic international rule, and I agree that needs to be fixed.

    • 3. Post office makes money from Amazon and bulk mailers. Because the postal worker needs to make the route, in case they need to pick up the occasional mail, and it is better to earn some money than none.

      That's not the way I've observed it working. I work from home so can go out to the mailbox whenever. The mailman drives by in the morning, and I usually pick up my letter mail (and junk mail) from the mailbox around 10 am. The mailman then comes by again around 3-5 pm putting any small Amazon packages i

      • The mailman then comes by again around 3-5 pm putting any small Amazon packages into my mailbox.

        It must be a regional thing, because that's not what happens where I live. I also work from home (for now), and I've watched the mail truck on a daily basis. The truck comes to my house, puts the paper mail (and any small packages that will fit) into the mailbox, then carries all other packages to my door. The postal truck only comes to my street once per day. It's efficient as it can possibly be in that regard.

    • Check the USPS' own statement [usps.com] about finances. It's not the pre-funding (which, by the way, is required for businesses since 1974). Their pension costs were $3.4 billion last year - but they lost $8.8 billion. Even if 100% of those pension costs were because of #talkingpoint Prefunded Pensions - they still lost more just in normal operations.

      It's not the pension funding - it's structural with too low of revenue, too high of costs. Both.

      • by Cyberax ( 705495 )
        USPS is most definitely saying that pensions are a problem. It's just that 2018 and 2019 were outliers, as USPS actually re-started doing capital investments. Prior to that, losses were attributed to pre-funding: https://about.usps.com/news/na... [usps.com] - out of 5,591 net loss 5,800 is because of pre-funding.
    • I'm an economist, which drives what follows.

      "Average Cost" is the total cost divided by the number of units.

      "Marginal Cost" is the cost of one more unit than you are doing now.

      "Fixed Cost" is the set of costs that you can't change in the short term.

      In the long term, with one price for all comers, you either cover your average costs, or you go under. You will also generally grow until AC=MC.

      Now, if you are the USPS, you probably have excess capacity--space on trucks, drivers in the field, and so forth.

      If yo

  • by Tablizer ( 95088 ) on Friday April 24, 2020 @11:31PM (#59987988) Journal

    Trump overrates the value of his little package.

  • by jsepeta ( 412566 ) on Saturday April 25, 2020 @12:18AM (#59988104) Homepage

    Trump couldn't manage a paper bag.

  • by account_deleted ( 4530225 ) on Saturday April 25, 2020 @10:31AM (#59989088)
    Comment removed based on user account deletion

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