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(Reuters) – Recently, U.S. President-elect Donald Trump has demonstrated significant interest in the possibility of privatizing the U.S. Postal Service (USPS). This information comes from a report by the Washington Post citing sources familiar with the discussions.
The U.S. Postal Service has faced considerable financial difficulties, accumulating losses exceeding $100 billion since 2007. For the fiscal year that concluded on September 30, the organization reported a net loss of $9.5 billion, a substantial increase of $3 billion compared to the previous year. Much of this loss has been attributed to rising non-cash workers’ compensation expenses.
Upon learning of the Postal Service’s financial struggles, Trump remarked that the government should not provide subsidies to the agency, according to the report.
Trump, who is set to take office on January 20, has shared his intentions regarding the privatization of the Postal Service with Howard Lutnick, whom he has selected as his commerce secretary, during conversations at Mar-a-Lago.
Additionally, discussions about significant reforms to the USPS have taken place among staff within the newly planned Department of Government Efficiency, which will be led by Elon Musk and Vivek Ramaswamy, as reported by two other sources.
A spokesperson for the USPS indicated that, in recent years, the agency has managed to decrease its operational hours by 45 million and has cut transportation expenditures by $2 billion.
The Postal Service is actively pursuing regulatory approvals aimed at updating its mail processing and transport operations to better reflect contemporary practices, a move expected to save between $3.6 billion and $3.7 billion annually.
Karoline Leavitt, a spokesperson for the Trump transition team, emphasized that no policies regarding the Postal Service should be considered official unless communicated by Trump or his designated representatives.
Should privatization efforts proceed, they could significantly impact the U.S. e-commerce sector, particularly affecting companies like Amazon, which relies on USPS for “last-mile” deliveries from fulfillment centers to consumers. Such changes could also create challenges for small businesses and rural customers dependent on the Postal Service, often the sole carrier serving remote areas.
Recently, Amazon announced a donation of $1 million to Trump’s inaugural fund and plans to stream his inauguration on its Prime Video platform.
Trump’s relationship with the Postal Service has been characterized by tension. Reports indicate that his transition team is evaluating the potential to cancel contracts related to the electrification of the USPS delivery fleet.
According to sources, there is an ongoing review concerning the unwinding of multibillion-dollar contracts the Postal Service has engaged in, including those with companies like Oshkosh and Ford for the procurement of electric delivery vehicles and charging infrastructure.
In 2020, the Postal Service was authorized by Congress to borrow up to $10 billion from the Treasury Department as part of a larger $2.3 trillion stimulus package aimed at alleviating the economic impact of the coronavirus pandemic, a measure that Trump had threatened to obstruct.
Source
finance.yahoo.com