A Treasury-led task force is proposing that the U.S. Postal Service charge more for certain package deliveries, going after Amazon and other online retailers that President Donald Trump has said benefit at the post office’s expense, The Wall Street Journal reports.
The Postal Service hasn’t priced package deliveries with profitability in mind, according to the task force’s report released Tuesday. It says the agency should be able to charge market-based prices for mail and package items that aren’t deemed essential services. The report, requested by Trump in April, recommended raising prices for many types of commercial package deliveries, a growing business for the Postal Service.
Higher rates on package services would hit Amazon, which relies on the Postal Service to deliver up to 45% of its packages, according to a Morgan Stanley estimate. Analysts have estimated it’s cheaper for Amazon to use the Postal Service than traditional carriers such as FedEx and United Parcel Service because the online retailer primarily injects sorted packages into the Postal Service network, paying for only the last leg of delivery.
FedEx and UPS would also be subject to the higher rates, as they often use the Postal Service for last-mile delivery. The two carriers would likely offset higher costs by passing them on to large shippers, including retailers such as Target and Walmart.