Washington Post refutes Trump claim that Postal Service loses money on every e-commerce package it delivers

On April 24, President Trump told reporters that the U.S. 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."

That's not true, writes Glenn Kessler, editor of The Washington Post's Fact Checker column. Unlike most of the president's many inaccurate statements, it could matter, because "Trump is threatening to veto financial aid for the beleaguered U.S. Postal Service unless it hikes the price it charges for delivering packages — which he said should be quadrupled."

USPS is losing money overall, mostly because more people send emails than snail mail these days, and because Congress requires it to prepay pension and health benefits for its employees, Kessler writes. The service is also at a disadvantage because it can't charge extra postage for first-class mail sent to remote (and therefore more expensive to deliver) locations.

Package delivery has been an increasing share of USPS volume and revenue over the past three years. "Of course, revenue is not profit. And we do not know the details of the contracts between USPS and Internet retailers," Kessler reports. "But USPS says it has been raising prices." Amazon contracts with USPS instead of developing its own "last mile" delivery service, but USPS said in a 2019 report that Amazon and other big shippers are testing and implementing their own last-mile services.

The emergence of competitors is significant since, under a 2006 law, USPS is prohibited from losing money on competitive service deliveries. If USPS were losing money to Amazon or another carrier on package deliveries, it would essentially be required to raise its prices to cover costs. But its most recent revenue filing shows that first-class package service revenue was 148 percent of costs associated with such deliveries, while ground parcel post covered 189% of costs.

Kessler asked the Treasury Department for a clarification of Trump's remarks. "Essentially, Treasury’s answer is that USPS’s calculation methods are off-kilter and provide a misleading picture of profits and losses — even as it concedes that USPS is following the law," Kessler writes. He gives Trump four Pinocchios, the most that The Fact Checker hands out in a single case. The Post is owned by Jeff Bezos, who owns Amazon, a fact to which Trump has alluded.