NALC: USPS Q1 financial statement shows operational profit

From the National Association of Letter Carriers:

NATIONAL ASSOCIATION OF LETTER CARRIERS LOGOFeb. 8, 2013 –Today’s Postal Service’s quarterly financial report shows the folly of making drastic cuts in service as the postmaster general proposed this week.

The USPS reported a $100 million operational profit delivering the mail, despite the continuing poor economy. It earned $17.7 billion in revenue and had $17.6 billion in operating expenses. The decline in first class mail was more than offset by gains in standard mail and in package deliveries – providing the operating profit.

This operational profit was due in particular to a 4.7 percent jump in package deliveries – higher than FedEx or UPS – and to record efficiency gains by the workforce, the Postal Service reported Friday.

Eliminating Saturday delivery, as the postmaster general plans to unilaterally do in August – even though the law requires six-day delivery and only Congress can change it – would undermine this booming package business by degrading the Postal Service’s competitive advantage. At present, because the USPS already delivers mail to 151 million addresses six days a week, including Saturday, it delivers packages more inexpensively than its competitors.

The report makes clear that the top financial burden is the 2006 congressional mandate to pre-fund future retiree health benefits, which no other agency or company is required to do. The $1.4 billion in pre-funding charges this quarter accounts for all – and then some – of the overall red ink of $1.3 billion. Since pre-funding went into effect, it accounts for more than 80 percent of the agency’s red ink.

The USPS should focus on urging Congress to reform the pre-funding requirement, not on a counterproductive slashing of services that would hurt the public, businesses and the Postal Service itself.