Postal service records big loss, but it isn’t all the fault of the USPS

Barron’s reports on the impact USPS losses have on competitors UPS and FedEx, and along the way offers a surprisingly realistic summary of the current situation, and how we got here:

  • The United States Postal Service on Friday reported a fiscal third-quarter loss of $2.3 billion on sales of $17.1 billion. That’s a big loss, but it isn’t all the fault of the USPS.
  • The U.S. government began requiring the USPS to prepay retiree health-care obligations in 2007 partly because it was making a lot of money back then. The added expense accounts for most of the post office’s losses over those years.
  • The USPS pension plans are more than 87% funded, which is actually a little better than the 86% median funding level for companies in the S&P 500.
  • The USPS has about $114 billion in health-care obligations recorded and has set aside about $90 billion
  • Pensions are required to be pre-funded by law, but health-care benefits are handled on a pay-as-you-go basis by most companies.

Read the full article at Barrons: What the U.S. Postal Service’s Big Loss Means for FedEx and UPS. – Barron’s

  • JY

    Finally, the REAL truth!