Trump administration recommends postal rate increases amid holiday shopping season
New report on USPS' financial challenges could lead to cost increases.
A new Trump administration report on the financial challenges facing the U.S. Postal Service could lead to cost increases for online retail giants like Amazon.
Released during the holiday shopping season, the Treasury Department suggested that the Postal Service needs more flexibility in setting rates and that, “packages have not been priced with profitability in mind.”
This formal review comes after Trump himself has called for rate increases, specifically targeting Amazon. Trump issued an executive order in April that created the Treasury Department Task Force to conduct the review.
Amazon announced that customers bought more products during this year's "Cyber Monday" than any other single day in Amazon's history. Customers of the "Amazon Prime" subscription service ordered more than two billion products with one day or faster delivery times in the past year, the company said Monday.
The 74-page report suggests a singular fix with Amazon alone will not solve the postal services profitability struggles as competitors like UPS and FedEx continue to dominate the shipping market.
“The benefits of the USPS monopolies continue to diminish,” according to the report. “The USPS must pursue price increases, reduce service costs, or exit the business line for any class of mail that falls outside of the determined essential services and that does not cover attributable costs.”
The recommendations also include expanding the definition of those “essential services” to include person-to-person shipping, so small businesses run from residential homes might not see the same increases as online retail giants.
“The USPS should have the authority to charge market-based prices for both mail and package items that are not deemed “essential services,” according to the review.
Both Amazon and Treasury Department did not immediately respond to requests for comment from ABC News.