Commentary: Amazon has saved the U.S. Postal Service
Recently, the U.S. Postal Service and Amazon have been the topic of some of President Trump’s tweets. Personally, I think the president uses Twitter mostly to rally his supporters to an issue rather than to inform. While I realize calling him out has gone badly for some who have previously done so, (although I’m pretty sure he has no interest in my opinion) I couldn’t ignore one of his recent Twitter blasts, which reads as follows:
“Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy. 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?)!”
The main issue I have with the tweet is that it suggests that the Postal Service is losing money primarily because of its contract with Amazon. This is not the case. As a rural letter carrier for 30 years, I can tell you that the increase is business from Amazon has probably saved the USPS. With declining letter and magazine mail volume the last decade or so, revenues from e-commerce package delivery have been a postal lifesaver.
The truth is that reported USPS losses are almost totally due to the onerous pre-funding requirement that was imposed on the USPS by Congress in 2006 through the Postal Accountability and Enhancement Act (PAEA). It required the Postal Service to pre-fund retiree health benefits 75 years into the future, in just a 10-year period. These $5.4-5.8 billion yearly payments account for 87 percent of reported USPS losses since 2007, and 100 percent since 2013. No other business or entity is required to make such a payment. This act has greatly affected USPS’s ability to invest in and properly maintain equipment and delivery vehicles.
The tweet also implies that taxpayers are bearing the cost of the reported losses. The fact is that the USPS receives no taxpayer dollars for operating expenses. Postal revenue is generated through the sale of postage, products and services. Excluding the pre-funding requirement, the Postal Service has produced an operating profit four of the last five years, in large part due to increasing e-commerce revenue.
While the exact details of the USPS/Amazon contract aren’t publicly known, I can state with confidence that continuing increases in parcel delivery revenue, along with legislation to realign the pre-funding requirement, are key to preserving the most-trusted federal agency for the American public. The Postal Service has the ability to operate in the black if not burdened with unreasonable congressional mandates. If people appreciate the job USPS does, they should encourage their representatives in Congress to support common-sense postal reform.
Kelly Magalis, of Stephens City, is president of the Virginia Rural Letter Carriers Association.