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postal finances

Postal workers alliance sends letter to Issa opposing latest reform proposal

The four unions representing rank and file postal workers have sent the following letter to Darrel Issa, Chairman of the House Oversight Committee, and Elijah Cummings, the Ranking Member:

alliance

Dear Mr. Issa and Mr. Cummings:

We write to share our views on the hearing held on April 8, 2014 on the President’s proposals in the FY 2015 budget regarding the U.S. Postal Service. We write on behalf of nearly 500,000 postal employees who live and work in every Congressional District in America and who belong to our unions. We respectfully request that this letter be included in the record of the hearing. Read the rest of this entry »

Maine Congressman Calls on Speaker Boehner to Bring Postal Reform Legislation to the Floor after Recess

WASHINGTON, DC – Congressman Mike Michaud is calling on Speaker John Boehner to prioritize legislation that would promote the stability and sustainability of the U.S. Postal Service (USPS). Rep. Michaud has sent a letter to the Speaker urging him to take action following the April recess. If Speaker Boehner refuses to act, postal facility hours will be cut, service standards will be reduced, and thousands of postal jobs will be lost. Read the rest of this entry »

Rolando: Postal Service needs real reform

From the National Association of Letter Carriers:

NALC-LOGOApril, 8, 2014–Following today’s House Oversight and Government Reform hearing on the Obama administration’s Fiscal Year 2015 budget request for the United States Postal Service, National Association of Letter Carriers President Fredric Rolando released the following statement:

Today’s hearing focused on the Obama administration’s proposals to slash postal services, proposals that were first developed during the Biden-Cantor deficit reduction talks in 2011 and have been included in the four budgets released since. Portions of these proposals are included in H.R. 2748.

But we are not dealing with the same Postal Service we were when H.R. 2748 and the administration’s budget proposals were originally crafted. The proposals did not make sense in 2011 because they never offered a real solution to the Postal Service’s financial challenges, which were largely created by Congress.

The proposals make even less sense now: The Postal Service has returned to operational profitability and is capturing a growing share of the booming e-commerce market. USPS had an operating profit of $623 million in 2013 and in the first quarter of 2014 alone reported black ink of $1.1 billion.

Congress should focus on unchaining USPS from the retiree health pre-funding burden–which is required of no other public or private entity–and freeing the agency to grow and innovate. Discussing job-killing proposals that degrade or dismantle our invaluable postal networks is not the conversation we should be having.

It’s time to move forward with innovative solutions that allow the Postal Service to evolve and use its established network to serve the nation’s communication and e-commerce needs.

It’s time to start thinking about how we bolster service for tens of millions of businesses and households that have come to rely on door-to-door delivery, six days a week.

It’s time to discuss how to position the Postal Service to build successful partnerships with more American businesses, like Amazon has in moving toward seven-day delivery.

It’s no longer 2009. The Postal Service’s employees have done their part to help the Postal Service bounce back from the Great Recession as some 200,000 jobs have been eliminated. In fact, the service cuts have gone too far, all to pay for a misguided pre-funding policy.

Now it’s time for Congress to strengthen the postal recovery, not cripple the Postal Service with even more destructive service and job cuts.

Read more: Rolando: Postal Service needs real reform.

PRC Evaluates USPS Performance: 18 Discount Rates Miss the Mark

prcWashington, DCToday the Postal Regulatory Commission issued its 2013 Annual Compliance Determination (ACD) report, an assessment of the U.S. Postal Service’s rates and service in Fiscal Year (FY) 2013.  This year’s ACD is based on information the Postal Service is required to provide to the Commission and comments from the public.

The Commission notes that the Postal Service has made improvements in the areas of customized service agreements and increased cost coverage and contribution from competitive products.  Also, the volume of mail being measured for service performance has increased, and customer access and satisfaction have improved over the previous fiscal year.  The Commission also found that customers were generally satisfied with their overall experience when visiting post offices, but were less satisfied with the resolution of complaints.  Overall, the majority of the products were found to be in compliance.

However, the Commission has identified several compliance issues the Postal Service must address in FY 2014:

1)    Market Dominant Rates and Fees:  The Commission finds that 18 workshare discounts did not comply with section 3622(e), which requires the Commission to ensure that workshare discounts do not exceed the costs avoided by the Postal Service as a result of mailers preparing the mail.

2)    Competitive Products Rates and Fees:   Rates for Parcel Return Service Contract 4, International Priority Mail, International Air Parcel Post, and International Money Transfer Service-Outbound were not in compliance because they did not cover attributable costs.  The Commission ordered the Postal Service to take corrective actions.

3)    Market Dominant Products Service Performance:  Despite overall improvements, the Commission found that a majority of market dominant mail products did not reach their annual service performance targets.           

4)    In the FY 2014 ACR, the Postal Service must provide a detailed analysis of the progress made in improving Periodicals cost coverage that includes the impact of leveraging its pricing flexibility and implementing operational strategies.

“While the Postal Service has made strides in FY 2013 in service performance,” Chairman Ruth Y. Goldway noted, “it’s important to correct those areas we identified that hurt its financial condition, and also to pay attention to meeting service standards and solving customer complaints.”

 The Commission is required to issue its ACD 90 days after the filing of the Postal Service’s Annual Compliance Report.  A copy is available at Commission offices and may be found on the Commission’s website at 2013 Annual Compliance Determination

. The Commission analyzed the Postal Service’s financial condition in a separate report issued on March 18, 2014.

 

Video: PMG’s State of the Business Message for Employees

A message to all employees of the United States Postal Service from Postmaster General Patrick R. Donahoe.

USPS reports $122 million operating profit in January

janfinThe USPS has released financial results for January which show the agency made a $122 million operating profit for the month, bringing the year to date profit to $912 million. As usual, however, Congressionally mandated bookkeeping entries transform the modest surplus into a billion dollar loss. The “trust fund” entry for the month is $475 million, and the “actuarial revaluation” of present and future workers comp cases comes to an additional $659 million. Neither of these entries reflect actual cash disbursements.

Turning to the reality based numbers, total volume for the month was down 3.1% compared with January 2013, while total workhours declined by just 1%. Salaries and benefits for postal workers, however, dropped by 2.3% from a year ago, reflecting the replacement of secure middle class postal jobs with lower paid temporary positions.

While total workhours were down, delivery hours continue to climb. City delivery hours were 2% higher than last year, while rural hours increased by 0.8%.

Despite the decline in mail volume, revenue was up by 1.5% thanks to rate increases and classification changes. Package and shipping services revenue was up by a whopping 13.2% compared with 2013. Despite the increase, however, packages still account for less than one quarter of total USPS revenue.

Read the full report (.pdf file).

OIG White Paper: What America Wants and Needs From Its Postal Service

The USPS Office of Inspector General commissioned a focus group study to try and determine what Americans want from their postal service. Today the OIG published a white paper summarizing the results:

oigfocusThe U.S. Postal Service faces tough decisions about its future, including how it will continue to meet America’s changing communications needs and how it will return to financial stability. To make such decisions, the Postal Service must know the products and services its customers demand of it. While it is important to understand what Americans want from the Postal Service, it is equally important to gain a better perspective on what they absolutely need.

Last year, the Postal Service Office of Inspector General (OIG) released a paper summarizing the results of a national web-based survey aimed at better understanding how Americans view the Postal Service now, and its role in the future. To gain further insight into the results of this survey, and explore the types of compromises the public is willing to accept, the OIG again partnered with market research firm InfoTrends to conduct a series of focus groups across the country.

The focus groups provided new, qualitative insight by gathering opinions from 101 individuals from 67 different ZIP Codes in a variety of rural, suburban, and urban areas. The demographics of the focus group participants were generally consistent with the rest of the country in categories such as age, gender, access to the Internet, and population density. Although the results cannot be generalized, they shed light on what a sample population of Americans want and need from the Postal Service.

The following report, What America Wants and Needs from the Postal Service, describes the results of the focus group discussions.

Key Findings

Several key trends emerged from analyzing the focus group results:

  • Funding: Consistent with our previous survey findings, nearly 70 percent of participants did not realize the Postal Service is self-funded, incorrectly believing that it receives tax dollars for operations. Upon learning it is funded by its own revenue, participants lowered their service level expectations. For Americans to make informed decisions about what they expect from the Postal Service, they must understand its funding structure.
  • Physical Locations: Most participants valued the Postal Service as an institution. Participants in rural areas considered a Post Office a valued community asset, whereas urban participants placed a higher importance on the convenience of accessing postal services. Rural participants noted security concerns with trusting their mail with nonpostal employees in nonpostal retail locations, such as grocery stores. This often prevailed over the convenience of co-location.
  • Accessibility: Many participants felt strongly that the existing hours offered at their local Post Office should not be reduced, and focus group participants who worked suggested shifting or expanding the current hours to accommodate their work schedules. Several participants were concerned that reducing their Post Office’s current hours could result in increased wait times, their largest source of dissatisfaction with the Postal Service as reported in a pre-focus group survey.
  • Delivery: Participants were most likely to compromise on residential delivery location and the number of delivery days.
    • Location: Security concerns were the primary driver of opinions on delivery location for those in rural areas, whereas convenience motivated those in suburban and urban areas. Participants were generally willing to move to centralized cluster boxes if the boxes were relatively convenient, saved the Postal Service money, and ensured security.
    • Days: Most participants supported a reduction in the number of delivery days, although there was a lack of consensus on the number of delivery days needed or which days to eliminate. Those who worked preferred to receive mail on Saturdays.
  • Digital Services: Participants found it difficult to imagine digital services and accordingly did not think it appropriate for the Postal Service to provide them.
  • Governmental Services and Other New Products: Similar to the previous survey results, some participants saw the utility of offering governmental or other new products or services at Post Offices. However, the participants revealed that they thought others, rather than themselves, would actually use the services.
  • Postal Service’s Role in the Future: More than 98 percent of focus group participants stated they would be negatively affected if the Postal Service ceased to exist, but participants could not articulate how their lives would actually be affected.

This research sheds light on a sample of Americans’ views of the products and services the Postal Service offers now and could provide in the future. Additional research on specific new products and services could provide additional, more complete, insights.

Read the full report

Now You See It, Now You Don’t: Manufactured Crisis Hides Good News

APWU Web News Article #026-14, Feb 8, 2014

apwulogoThe Postal Service’s financial report for the first quarter of Fiscal Year 2014 shows the agency enjoyed an operating surplus of $765 million. But the agency’s good news was buried in most media accounts, which said the USPS suffered a loss of $354 million loss.

“The USPS reported losses for the first quarter of 2014 for one reason — the congressional mandate that requires the Postal Service to pre-fund healthcare benefits for future retirees.” said APWU President Mark Dimondstein. No other government agency or private company faces such a requirement.

“The USPS is suffering from a manufactured crisis,” Dimondstein said. “Privatizers have used the ginned-up crisis to undermine a great national treasure. They’ve been closing mail processing plants, outsourcing retail operations, threatening to eliminate six-day delivery and generally harming service.”

Fredric Rolando, president of the National Association of Letter Carriers, said the first-quarter report “show why the postal network must be maintained and strengthened, not degraded.”
The operating surplus for the first quarter of Fiscal Year 2014 continues a trend that began last year. The USPS showed an operating surplus of $100 million for the first quarter of Fiscal Year 2013.

“These trends augur well for the future, because they reflect the opportunities increasingly presented by the Internet and by an improving economy,” Rolando said. Package revenue increased by more than 14 percent during the quarter, due to online shopping.

“The solution to the postal crisis is clear,” Dimondstein said. “Congress must eliminate the pre-funding requirement and allow the USPS to enhance service.”

Click here for the USPS Presentation on Finanical Report

NALC: USPS’ ‘highly encouraging’ quarterly report reveals $765M profit

NALC-LOGO

Feb. 7, 2014–Today, the U.S. Postal Service released its financial report for the first quarter of Fiscal Year 2014, which covers the last three months of 2013.

Here is NALC President Fredric Rolando’s statement about today’s report:

Today’s Postal Service figures for the first quarter of 2014 are highly encouraging and show why the postal network must be maintained and strengthened, not degraded.

The announced operating profit of $765 million for the first quarter is dramatic in itself–and it continues the operating profitability that began last year.

The Postal Service’s unmatched networks and outstanding employees have made these striking results possible. And these trends augur well for the future, because they reflect the opportunities increasingly presented by the Internet and by an improving economy. Package revenues resulting from online shopping rose by more than 14 percent this quarter–more than offsetting the small decline in letter revenue.

This quarter’s $765 million operating profit compares with the $100 million from the first quarter of 2013–another sign of improving postal finances.

In light of these results, lawmakers should strengthen the postal network while addressing the remaining problem: the congressional mandate to pre-fund future retiree benefits, required of no other public or private entity in the country. Degrading the network and reducing services to the public and businesses would jeopardize the postal turnaround.

USPS nets $1 billion from operations in first quarter

The US Postal Service realized a $1 billion profir from postal operations in the first quarter of the fiscal year, only to see that profit erased as usual by Congress’s “pre-funding” requirement. After deducting the $1.4 billion PAEA payment (which the USPS has no intention of actually paying), the USPS reported a loss on paper of $354 million:

WASHINGTON, Feb. 7, 2014  /PRNewswire-USNewswire/ — The U.S. Postal Service ended the first quarter of its 2014 fiscal year (Oct. 1, 2013Dec. 31, 2013) with a net loss of $354 million. This marks the 19th of the last 21 quarters that it has sustained a loss. Though the Postal Service has been able to grow revenue by capitalizing on opportunities in Shipping and Package Services and has aggressively reduced operating costs, losses continue to mount due to the persistent decline of higher-margin First-Class Mail, stifling legal mandates, and its inflexible business and governance models.

“The Postal Service is doing its part within the bounds of law to right size the organization, and I am very proud of the achievements we have made to reduce costs while significantly growing our package business,” said Postmaster General and CEO Patrick Donahoe. “We cannot return the organization to long-term financial stability without passage of comprehensive postal reform legislation. We appreciate the efforts of the House and Senate oversight committees to make this happen as soon as possible.”

Without legislative change, the Postal Service will be forced to default on another required $5.7 billion retiree health benefits prefunding payment due by Sept. 30, 2014, because it will have insufficient cash and no ability to borrow additional funds at that date.

The Postal Service will continue to have a low level of liquidity through October 2014. In the event that circumstances leave the Postal Service with insufficient cash, the Postal Service would be required to implement contingency plans to ensure that all mail deliveries continue. These measures could require the Postal Service to prioritize payments to its employees and suppliers ahead of some payments to the federal government, as has been done in the past.

Citing that the Postal Service could not wait for legislation indefinitely, the Postal Service’s Board of Governors directed management in 2013 to accelerate alignment of its operations to further reduce costs and strengthen its finances. The Postal Service leveraged employee attrition and increased use of non-career employees — as provided by new labor agreements — which allowed for better alignment of staffing and workload levels, resulting in reduced labor costs.

“We grew revenue by over $300 million through aggressive marketing and improving service, and we reduced operating costs by $574 million in Quarter 1, partially due to the separation of approximately 22,800 employees in 2013 under a Voluntary Early Retirement program and improved efficiency in our workforce,” said Chief Financial Officer and Executive Vice President Joseph Corbett.

First Quarter Results of Operations Compared to Same Period Last Year

  • Total mail volume of 42.0 billion pieces compared to 43.5 billion pieces
  • First-Class Mail volume declined 4.6 percent.
    • Standard Mail volume declined by 2.8 percent.
    • Shipping and Package volume increased 10.3 percent.
  • Operating revenue of $18.0 billion, an increase of $334 million or 1.9 percent
  • Operating expenses of $18.3 billion compared to $18.9 billion, a decrease of 3.0 percent

Revenue from First-Class Mail, the Postal Service’s most profitable service category, decreased $209 million, or 2.8 percent from the same period last year, with a volume decrease of 817 million pieces, or 4.6 percent. The most significant factors contributing to this decline were the ongoing trends in the mailing behavior of consumers and businesses emanating from the recent recession, and the continuing migration toward electronic communication and transactional alternatives.

The Postal Service’s shipping business continues to show solid growth. Shipping and Package revenue increased $479 million or 14.1 percent over 2013 first quarter results, fueled by the growth of online shopping, Sunday deliveries in limited U.S. markets and the ongoing success of Postal Service campaigns to promote the value of Postal Service shipping services. The Postal Service continues to capitalize on its competitive advantage in providing “last mile” service, resulting in a 34.3 percent increase in revenue from Parcel Return and Parcel Select Service over the same period last year.

Complete financial results are available in the Form 10-Q, available at http://about.usps.com/who-we-are/financials/welcome.htm

Financial Briefing Today

Postmaster General & CEO Patrick R. Donahoe and Chief Financial Officer and Executive Vice President Joseph Corbett will host a telephone/web conference call at 11 a.m. ET today (Feb. 7) to discuss the financial results. The call is open to the news media and all other interested parties.

How to Participate:
Important Notice: To ensure your computer is set up to join the event, click on the link www.webex.com/lp/jointest/ 

Attendee Direct URLhttps://usps.webex.com/usps/onstage/g.php?t=a&d=998584009

If you cannot join using the direct link above, please use the alternate login below:
Alternate URL:  https://usps.webex.com
Event Number: 998 584 009

To join by phone only, dial (855) 293-5496 and enter conference ID: 43116392.

The briefing will also be available on live audio webcast (listen only) at:
http://about.usps.com/news/electronic-press-kits/cfo/welcome.htm.