Trump’s USPS Privatization Drive Could Endanger Rural Deliveries, E-Commerce Giants Like Amazon

The U.S. Postal Service, with $100 billion in losses since 2007, is at the center of Trump’s privatization plans. Rural mail, e-commerce logistics, and electrification contracts could face upheaval, according to sources familiar with the matter.

Trump Explores Privatizing USPS Amid Mounting Losses

The Washington Post (via Reuters) reported on Saturday that three persons familiar with the situation said that U.S. President-elect Donald Trump has recently shown a strong desire in privatizing the USPS.

For its fiscal year ending September 30, the United States Postal Service recorded a net loss of $9.5 billion, an increase of $3 billion from the previous year. The majority of this loss was attributable to a rise in non-cash workers' compensation expense compared to the previous year. Since 2007, the agency has lost over $100 billion.

According to the Washington Post, Trump expressed his belief that the government should not provide financial support to the organization after learning about its yearly deficits.

High-Level Talks Focus on USPS Future

According to the story, Trump has met with his nominee for commerce secretary, Howard Lutnick, at Mar-a-Lago to discuss privatizing the Postal Service. Trump takes office on January 20.

The story cited two other sources acquainted with the topic and stated that individuals who will be working under Elon Musk and Vivek Ramaswamy at the Department of Government Efficiency had also had initial discussions regarding significant changes to USPS.

A representative from the United States Postal Service stated that the organization had eliminated 45 million man-hours of work and saved $2 billion in transportation expenditures over the past three years.

Modernization Efforts and Potential Industry Impact

The agency is also looking to save $3.6-$3.7 billion a year by updating its transportation network and postal processing to modern standards, which will require regulatory permission, according to the spokeswoman.

Per Investing.com, Amazon relies on the USPS for the "last-mile" delivery from its fulfillment centers to customers, so any effort to privatize the Postal Service might have a negative impact on the e-commerce industry in the US, according to the Washington Post. Because it is the only carrier willing to deliver to rural areas, it might also damage small companies and consumers that rely on the Postal Service.

Amazon Prime Video will broadcast Trump's inauguration and the company recently announced a $1 million donation to his inaugural fund.

USPS Electrification Plans Under Review

The president's relationship with the USPS has been rocky. Reuters has heard from sources that his transition team is thinking about pulling the plug on the service's plans to electrify its delivery vans.

Oshkosh and Ford are among the companies with whom the service has multibillion-dollar contracts for thousands of electric delivery vehicles and charging stations; insiders say the team is looking into ways to terminate these contracts.

Trump threatened to veto a $2.3 trillion coronavirus stimulus program that Congress had authorized in 2020, which included a $10 billion loan to the Postal Service from the Treasury Department.