President Donald Trump’s new executive order asking for an evaluation of the United States Postal Service doesn’t name Amazon, but a CNBC analyst called it a “shot across the bow” at the Seattle-based online retail giant.
The order asks a task force to issue a report on the financially struggling USPS within 120 days, examining pricing of the package delivery market, among other factors.
“The USPS is on an unsustainable financial path and must be restructured to prevent a taxpayer funded bailout,” said the order.
However, social media posts reveal there’s more to the story. Twitter shows the timeline of Trump’s attack on Amazon.
“I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy,” read one Tweet on April 3.
Analysts estimate Amazon uses the postal service for nearly half of its shipping needs and gets a big deal for the high volume.
The Washington Post reported per-package costs work out to roughly half the standard rate charged by other big shippers.
However, a former Postmaster General told analysts Amazon is actually profitable for the Postal Service, at a time when overall mail has declined significantly.
That's why the new executive order could be more about Amazon CEO Jeff Bezos’s other property, The Washington Post.
“I still don't believe it's Amazon that its target,” NBC political director Chuck Todd told KING 5. “I really believe it's Jeff Bezos that's his target, and it's all intertwined with The Washington Post.”
“A company being singled out by the government should be worrisome not just for Amazon but for any company in the country,” said Jeff Shulman of UW's Foster School of Business.
Whether or not Amazon spurred the government audit, Shulman says its analysis of the Postal Service should be conducted as a part of routine business.
“The Post Office should be doing these things anyway,” said Shulman. “The question becomes is an executive order necessary to have the organization evaluate these things and is the timing now? Really, they should do this fairly regularly.”
Meanwhile, the Postal Service in a statement Friday appeared to welcome the task force audit.
“As we have repeatedly stressed, these business model problems are serious, but solvable, and the President’s executive order establishing the Task Force on the United States Postal System provides an opportunity to further consider these important public policy issues,” read the statement in part.
Analysts also note that the USPS retiree pension and health care cost structure account for a large part of the Postal Service’s financial problems.
As for Amazon, war of words aside, the tech behemoth actually does significant work with the government, securing a big cloud contract with the CIA and is in the running for a possible contract with the Pentagon.
“The CIA contract that Amazon got was highly valuable not just for the revenue but for the brand value it created,” said Shulman.
“Amazon’s future is really bright regardless of what happens with government contracts coming up,” he continued.