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April 06, 2018 06:03 PM

Real Or Fake: Is Amazon Costing The USPS Money?

There's a Twitter war going on between President Donald Trump and Amazon over the retailer's contract with the U.S. Postal Service for package delivery. 

Trump is claiming the Post Office is losing billions because of Amazon. 

President Trump has taken to Twitter to attack the retail giant Amazon five times in the last week.

Trump contends that Amazon is ripping off the United States Postal Service. 
But that claim is fake. 

Amazon's deal with the post office helps make up a third of the postal service's revenue.  

"The fact that Amazon is their number one customer nowadays, it's really a godsend to the USPS. Because, without Amazon's business, the USPS would be asking for lot more subsidy," Georgetown Business Professor Arthur Dong said. 

Then a couple of days ago Trump tweeted: "the post office is losing billions of dollars," at U.S. taxpayers' expense.


While it's real that the post office had $2.7 billion in losses last year, what's fake about that claim is that it's at taxpayer's expense.  

The post office is not funded by U.S. tax dollars. 

The postal service began losing money in the early 2000s with the rise of Internet usage.  

Between 2016 and 2017 overall revenue fell $1.8 billion for USPS but shipping and packages saw a $2.1 million increase.  

The Postal Regulatory Commission says its shipping and packaging business from entities like Amazon helped the "financial picture of the Postal Service. " 

And a federal law even ensures that the post office has to make a profit from these online retailers. 

A majority of the postal service losses come from the required $5.5 billion a year it pays into a health fund for postal service retirees.  

Trump is right Amazon does get a discount for shipping in bulk, but that is available to other businesses too. 





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