August 1, 2018 / 6:45 PM / 20 days ago

Amazon forms U.S. Postal Service lobby group with other companies

WASHINGTON (Reuters) - Amazon.com Inc (AMZN.O) and other retail and logistics companies said on Wednesday they had started a new group to lobby to keep the U.S. Postal Service’s (USPS) package delivery services “reliable and affordable.”

FILE PHOTO: Amazon boxes are seen stacked for delivery in the Manhattan borough of New York City,U.S., January 29, 2016. REUTERS/Mike Segar/File Photo

The announcement comes days before a task force set up by President Donald Trump is due to recommend postal reforms to the White House. Trump has said without evidence that the world’s largest online retailer is making the postal service incur losses, mandating the task force review USPS pricing on package delivery.

While Amazon has steered clear of any quarrel with the president, the Package Coalition is now poised to take the company’s case to the public as the government weighs changes affecting USPS.

“These companies just want to ensure that decisions are made based on a clear understanding of what the facts are,” John McHugh, the coalition chairman, told Reuters in an interview. “The package service portion of the postal service’s business model is one of the few bright spots. It makes money.”

McHugh, a former member of Congress who served as chairman of the postal service subcommittee, said package rate hikes not based on market prices could reduce demand and revenue for USPS, potentially undercutting its ability to deliver to any address in the United States.

USPS has lost $65 billion since the 2007-2009 financial crisis, according to the executive order establishing the postal task force. The service, which is supposed to be self-sustaining, must ask Congress for permission to raise rates and must pre-fund decades worth of retiree health benefits.

Coalition members have already shared information with the presidential task force, McHugh said. With the task force’s Aug. 10 report deadline looming, the coalition’s focus at present is on broader government and public outreach.

“Earlier today we sent out emails asking for meetings with both House and Senate members,” said McHugh. “We view this as a long-term effort.”

Members of the new group include Columbia Sportswear (COLM.O), pharmacy benefits manager Express Scripts (ESRX.O), the National Retail Federation, package shipping firm OSM Worldwide, postal service company Pitney Bowes (PBI.N), Publishers Clearing House and the retailer QVC.

“Without (the Postal Service), consumers would have fewer shipping options, reduced service in rural areas, and prices would drastically increase,” said Blair Anderson, director of transportation policy at Amazon.

Amazon did not respond to a request for further comment, beyond the Package Coalition statement.

Reporting by Chris Sanders and Jeffrey Dastin, Editing by Rosalba O'Brien and Tom Brown

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