U.S. Postal Service Posts $5.1 Billion Loss, Even with Package Delivery Increase, Is It Time For More Overhauling of USPS?

2015-11-15T22:42:08-05:00

Is it time for more overhauling of the Postal System?

WASHINGTON - The Postal Service on Friday reported a $5.1 billion loss for the just-completed 2015 fiscal cycle — a slight improvement over 2014.

The loss reflects continued erosion in the delivery of first class mail as well as expensive mandates for funding retiree health care.

There was good and bad news in the Postal Service's year-end results. Revenues were up, and it made an operating profit of $1.2 billion, reflecting continued growth in its package delivery business.

But a special rate surcharge is set to expire next year, which promises to cut revenues by $2 billion annually, and volume of mail delivery should continue to shrink. Expenses continue to rise despite slower mail delivery.

The service is still seeking relief from the mandate to "pre-fund" retiree health benefits. Legislation in 2006 required the Postal Service to fund 75 years' worth of retiree health benefits, something that neither the government nor private companies are required to do.

"The road is difficult for a number of reasons," said Chief Financial Officer Joseph Corbett. "Without the surcharge, for example, in 2015, we would have recorded a controllable loss of $800 million, not income of $1.2 billion. Also, our costs continue to escalate."

The service continues to press for legislation that would provide relief from its funding requirement for retiree health benefits and give it greater flexibility in setting rates.

The Postal Service registered revenues of $68.9 billion in 2015, a $1.1 billion increase over 2014.

It's the ninth consecutive year that the Postal Service has lost money. Mail volume is down as people rely more and more on email on online bill payments. But online shopping has led to significant growth in its package delivery business, which has grown by 50 percent over the past five years.

Lawmakers such as Sen. Tom Carper, D-Del., have tried for years to overhaul the Postal Service, but proposals such as ending Saturday mail delivery and closing more post offices have met with resistance from other lawmakers and postal workers.

"The USPS' continuing financial upswing shows that dismantling services to the public would be precisely the wrong path to take," said Fredric Rolando, president of the National Association of Letter Carriers. "This impressive performance is no fluke. It results from two structural factors: An improving economy is helping stabilize letter revenue, and Internet-driven online shopping is sending package revenue skyrocketing."

U.S. Postal Service Posts $5.1 Billion Loss, Down Slightly From 2014

The Postal Service on Friday reported a $5.1 billion loss for the just-completed 2015 fiscal cycle — a slight improvement over 2014.

Response by SSgt Alex Robinson made Nov 15 at 2015 10:50 PM

2015-11-15T22:50:36-05:00

If only they could get rid of the unions and run the Postal Service like a business instead of a quasi government agency.

Response by Sgt Nick Marshall made Nov 15 at 2015 11:42 PM

2015-11-15T23:42:29-05:00

The postal service is just that, a service. It cannot set its own rates, must provide universal service (even in unprofitable areas) and has been hampered by pre paying retirement benefits 75+ years into the future. It is self funded and internationally seen as the standard. It has no variation on pay for women or minorities and provides a solid middle class income.
Get rid of the unions and you get rid of middle class income, may as well become an extension of Wal-Mart

Response by CAPT Kevin B. made Nov 16 at 2015 2:23 AM

2015-11-16T02:23:58-05:00

LBJ killed the Postal Service and the dead horse still hasn't fallen down. John A. Gronouski was the Postmaster General at the time. There was this package delivery company (UPS) that was taking more of the parcel service away from the Post Office. The Postmaster General was a sharp guy. He developed the Zip Code. He also went to LBJ to get sponsorship for funds to modernize the Postal system. Mainframe computers like the IBM 360 were coming out. UPS was using them, automating some of the sorting operations, and reducing cost. John's pleas fell on deaf ears with LBJ finally pounding the desk and yelling "Machines don't vote!". The union had such a lock, there were separate pay, insurance, and retirement systems for postal workers vs. the rest of the Government. That remains in place today for the most part. Great if you're the employee and bad for longevity. Everyone got too greedy. So the best last chance to modernize early was never realized.

Response by PO3 Private RallyPoint Member made Nov 16 at 2015 9:14 AM

2015-11-16T09:14:15-05:00

I still remember some down voted me and name called me big time ... work in USPS. He is so proudly said that his tax pay for my military salary so I should know my place in front of him, and he said USPS is only on loans from the government .... blah blah blah ....

I am now said :"MUHAHAHAHAHAHHAHAHAH".

Anyway ... USPS just need to cut spending ... for sure.

Response by Capt Mark Strobl made Nov 16 at 2015 12:05 PM

2015-11-16T12:05:17-05:00

E-Mail and Social Media collectively killed 1stClass postal service --which was likely the proverbial keystone of the USPS profitability. Where FEDEX, UPS, and the like, each adjusted their business models, the good ol' USPS remained stagnant. And history has revealed what happens to dinosaurs.

Response by SSG Doug Elieff made Jul 11 at 2016 6:21 PM

2016-07-11T18:21:55-04:00

Postal Regulatory Commision made the decision to drop the price of the first class stamp from .49 to .47 cents. The only other time there was a decrease was in 1919.

Response by 1SG Dennis Hicks made Aug 20 at 2020 7:00 AM

2020-08-20T07:00:24-04:00

The USPS has been on life support for decades, it hemorrhages tax payer money9They can call these funds whatever they like, in the end taxpayers supply the cash) with no end in site, with the creation of social media and private delivery companies the hemorrhaging has turned int a full bleed out that is only slowed with massive infusions (TAX MONEY, LOANS, budgets etc) Besides it inability to stand alone and make a profit it is like anything that the Govt runs a failed experiment. Don't get me wrong their are literally many thousands of hard working, ethical individuals in this organization but they are contaminated with the typical govt job blobs that occupy time and space as well as a drain on money and service.

Response by Lt Col Charlie Brown made Aug 20 at 2020 7:13 AM

2020-08-20T07:13:45-04:00

It provides an essential service but it is long due for an overhaul.

Response by SPC Erich Guenther made Aug 20 at 2020 4:48 PM

2020-08-20T16:48:04-04:00

What really kills me about all this as an Amtrak supporter. Amtrak loses just a few hundred million a year running a nationwide rail system (and deficit on a downward trend until the pandemic) and Congress makes it seem like it is a financial catastrophe and makes Amtrak beg each year just for a $100-200 million more in subsidy for a maintenence project. USPS and Airlines get Billions of Dollars without any question and without Congress batting an eye. Just ridiculous.