Slight increase in losses for USPS

The US Postal Service (USPS) has reported somewhat higher losses for financial year 2016 ($5.6 billion) as against $5.1bn in 2015. This was down to a $5.8bn retiree health prefunding obligation.

Before the retiree healthcare prefunding obligation, the USPS would have had a net profit of $200 million.

“To drive growth in revenue and better serve our customers, we continue to invest in the future of the Postal Service by leveraging technology, improving processes and adjusting our network,” said USPS Postmaster General and CEO Megan J. Brennan. “In 2016, we invested $1.4bn, an increase of $206m over 2015, to fund some of our much-needed building improvements, vehicles, equipment and other capital projects.”

The shipping and packages business saw a revenue growth in the region of $2.4 billion, reflecting a growth of 15.8%. This offset a decline in First Class Mail revenues of 3.3% ($2.4 billion). This was, “due largely to the exigent surcharge expiration and continuing electronic migration”.

“The Postal Service continues to win e-commerce customers and grow our package delivery business. We deliver more e-commerce packages to the home than any other shipper because of our predictable service, enhanced visibility and competitive pricing,” said Brennan.

Overall, the Postal Service reported operating revenue of $70.4bn for 2016, excluding a $1.1bn change in accounting estimate recorded during the year.  This equates to an increase of $1.6bn, or 2.3%$, over last year.

USPS commented: ” Despite the positive trends in some aspects of its business, the net loss suffered by the Postal Service this year cannot be ignored. Even with continued proactive and aggressive management, such losses are likely to persist for the foreseeable future because of mandated costs such as an unaffordable retiree health benefits program that is not fully integrated with Medicare, and an ineffective pricing system.”

According to Brennan: “This is why legislative and regulatory reforms remain critical for us to meet the needs of the American public now and well into the future.”

 
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