NALC: USPS Q1 financial statement shows operational profit
From the National Association of Letter Carriers:
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.