The United States Postal Service plans to raise rates for the Parcel Select service used by Amazon, FedEx, and UPS by 9.1 to 12.3 percent, according to a new filing with the Postal Regulatory Commission.
Parcel select is the last-mile service that gets packages across the finish line to customers’ homes. It’s one of several price increases across USPS’s business that will take effect Jan. 27, 2019, if approved by regulators. The financially troubled institution says the “new rates will keep the Postal Service competitive while providing the agency with needed revenue.”
The proposed price hikes come six months after President Donald Trump ordered a review of the USPS’s “expansion and pricing of the package delivery market and the USPS’s role in competitive markets,” among other things. The executive order set up a task force to review the Postal Service’s finances and operations and report back to the president with the goal of creating conditions to “operate under a sustainable business model.”
The USPS is in financial trouble. It reported a decrease of $1.8 billion in revenue in 2017 compared to the previous year, a drop driven largely by a decline in regular mail, like letters and postcards.
Trump’s executive order didn’t target Amazon specifically but Trump has repeatedly attacked the Seattle e-commerce giant on Twitter, accusing it of ripping off USPS.
Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!
— Donald J. Trump (@realDonaldTrump) December 29, 2017
A spokesperson for USPS said the price increases are not in response to pressure from Trump. Amazon could not be immediately reached to comment on the announcement.
