USPS reports losses of $5.1bn

The United States Postal Service (USPS) has reported annual losses of $5.1 billion (£3.4bn) for the financial year 2014-15. This has fallen somewhat compared to last year where the loss was £5.5bn (£3.6bn).

Revenues for the year were $68.9bn, up from $67.8bn while operating expenses grew 0.9% to $73.8bn.

Mail volumes fell once again to 154.2 billion pieces, from 155.5 billion pieces in 2014. As with so many other mail services around the world, the changing nature of the mail service is at core to the operator’s financial problems, with plummeting mail volumes being replaced with increasing parcel volumes. Where parcel delivery is a growth and profit making industry, mail used to be the core business and is being attacked by email and other electronic document delivery systems.

USPS said in a statement that, “the net loss is largely due to certain statutorily mandated payments over which the Postal Service has no control”. These are down to legislation from the US government that forces the USPS to pay for its retired employees’ healthcare, that some say has got out of control and is forcing the postal operator into huge losses.

The US Postmaster General Megan J Brennan said of the financial results, “We achieved controllable income in excess of $1 billion for the second consecutive fiscal year giving us some limited flexibility to make critical investments in the future of the organization.”

Efficiencies in the business have given the USPS some control over its finances but the Postmaster General said, “However, we will also need the enactment of legislation that makes our retiree health benefit system affordable and that provides increased pricing and product flexibility.”

As with postal operators around the world, the USPS is trying to catch up with its private rivals, though with a universal delivery obligation right across the US is hampered somewhat in what it can do.