The US Postal Service year to date financial loss now stands at just under $7 billion, with the vast majority of it due to the Congressionally mandated prefunding of potential future postal retiree’s health benefits.
The USPS continues to show the prefunding as an expense, despite the fact that the PMG has already made clear that he has no intention of actually making the payment.
The damage inflicted by the prefunding comes on top of sharp drops in mail volume. First class mail in July was down 9% from the same period last year (SPLY), while standard mail, which had been on the rise, was down almost 5% from last year. As a result, overall USPS revenue was also down by 5% from SPLY.
The USPS did a good job matching employee work hours to the decline in mail volume- both declined by about 6.6% from SPLY- but employee compensation, including wages, benefits, workers comp, etc., declined by just 3.8%, falling short of the decline in revenue.