Quarterly USPS financial statement shows growth in package shipping
By Bill McAllister, Washington Correspondent
Every quarter a small drama plays out over the latest United States Postal Service financial numbers that come out of USPS headquarters at L’Enfant Plaza in Washington.
Postal officials bemoan the size of the U.S. Postal Service’s growing deficit, but postal labor officials argue the actual numbers that matter aren’t that bad.
One of the agency’s advocates on Capitol Hill says the new numbers show that the USPS still needs “comprehensive postal reform legislation.”
The third-quarter numbers, released Aug. 10, showed that the best news the USPS has is that its packing and shipping business is continuing to grow rapidly. First-class and advertising mail numbers continued to drop.
Package revenues were up 10.6 percent for the quarter, while letter revenues dropped 2.2 percent.
While that might seem like some good news, a note in the agency’s latest Form 10-Q financial filing with the Postal Regulatory Commission points out that the Postal Service’s costs for shipping and package service “are substantially higher than our costs associated with First-Class Mail.”
“As a result, we must earn approximately $2.50 in Shipping and Package revenue to replace the contribution lost from each $1 of First-Class Mail revenue,” the filing says.
Overall, the USPS reported an operating loss of $197 million in the quarter ended June 30, compared to a $10 million profit during the same period in 2014.
For the first nine months, the USPS recorded an operating profit of $1.2 billion, compared to $1 billion in the same period in 2014.
Revenues have been flat, $16.6 billion in the 2015 quarter, compared to $16.5 billion during the same period last year.
For the nine-month period, revenue hit $52.3 billion, compared to $51.2 billion in the same period of 2014.
Fredric Rolando, president of the National Association of Letter Carriers, proclaimed the results show “the impressive Postal Service financial turnaround [is] continuing in full force.”
His argument: the USPS operating loss for the quarter ended June 30 of $197 million isn’t unexpected — “the third quarter is typically the slowest” of the year, he said.
Rolando said it points to “the fact that 2015 is turning into one of the USPS’s most impressive annual performances since the Great Recession.”
That’s not the way top postal officials cast the latest numbers.
“The combination of growing package revenues and improved productivity gains were not sufficient to offset mail volume declines and inflationary pressure, largely due to contractual increases in operating expenses including wages, benefits and transportation,” said chief financial officer Joseph Corbett in a news release.
“This underscores the need for a combination of continued sales growth, productivity gains and legislation to ensure the Postal Service can return to financial health and meets its public service obligations,” Corbett said.
Sen. Tom Carper, D-Del., who has tried repeatedly to persuade the Senate to pass legislation to help the USPS, acknowledged that “the current financial state of the Postal Service is better than past financial reports.”
Even so, “continued losses of this kind do little to bring the Postal Service out of its fiscal quagmire,” Carper said.
The problem with lack of agreement over the numbers is that few lawmakers seem willing to heed the warnings of Carper, Corbett and even Postmaster General Megan Brennan.
The Postal Service may not be prepaying the health benefits of its future retirees as Congress ordered in 2006, but the mail is being delivered.
And the way many lawmakers see it, that puts the Postal Service far from being an urgent problem they must face.
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