Trump administration recommends postal reforms that could lift rates
Last Updated: 2018-12-06 11:28 | Xinhua
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The Trump administration on Tuesday recommended an overhaul of the U.S. Postal Service (USPS) in order to create a "sustainable" business model and prevent "financial risk," which could lead to higher shipping rates for certain packages.

The U.S. Department of Treasury said in a report that the recommendations were made after a "thorough" evaluation of the USPS, following an executive order on the Task Force on the U.S. postal system by President Donald Trump issued in April.

The report suggested the USPS divide its mail and package shipments into "essential" and commercial service categories, and develop a new pricing model that removes price caps and charges market-based prices for the items that are not deemed "essential."

The proposed change could add to the delivery cost for many online retailers including Amazon, which has been accused by the U.S. president of using the USPS as its "delivery boy."

The report also recommended the USPS restructure prepayments of employee retirement and health benefits, improve its governance, and explore new services to improve its finances.

"The USPS is on an unsustainable financial path which poses significant financial risk to American taxpayers," said Treasury Secretary Steven Mnuchin.

Between 2007 and 2018, the USPS experienced net losses totaling 69 billion U.S. dollars, with 3.9 billion dollars for 2018 alone, the report said, adding that it is forecast to lose "tens of billions of dollars" over the next decade.

The USPS's business model - including its governance, product pricing, cost allocation, and labor practices - must be updated in light of its current operating realities, the report said.

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