Ouch, $5.1 billion… That the loss the Postal Service reported on Friday for the just-completed 2015 fiscal cycle — but that’s 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.”
The Associated Press contributed to this article
Justin W says
I cringe every time I find out something is coming through the mail. The Postal Service is slow, their package tracking leaves a lot to be desired, and technology is replacing many of the things I once used the mail for.
I would question the wisdom of the 75 year pension set aside. I don’t think pensions is the Post Office’s biggest problem.
Am I the only one who feels that the pension fund is setting in the government’s general fund, like social security, and at some point, will be adjusted like they are trying to do to social security right now ?
Their union could have a lot to do with getting the rules reversed, so that the government doesn’t spend it all, but they won’t. All they care about is their take out of the employees paycheck. If they lose that, you will hear from them – not before.
Maui kid says
They should not be made to pay for people who haven’t even been born yet.Why are they the only company in the country made to pay this?The Post Office could make a lot of money if management would stop trying to disband it.Parcel business is going gang busters and Sunday delivery of Amazon packages can’t be beat!Post Office is the cheapest to mail priority packages.You go Postal Service????
Post office is not competitive. Just shipped a package a few weeks ago $80.00 shipping!!!!
Will Never again use USPS!!!!!! UPS ground would have shipped the same package for $ 40.00. No wonder they are going out of business. They have more holidays than Obama give handouts and still cost too much.
You people do realize that the postal service is required to pay so much money to congress every year, Don’t you?