A message to all employees of the United States Postal Service from Postmaster General Patrick R. Donahoe.
A message to all employees of the United States Postal Service from Postmaster General Patrick R. Donahoe.
The 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).
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:
The 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.
Several key trends emerged from analyzing the focus group results:
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.
APWU Web News Article #026-14, Feb 8, 2014
The 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
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.
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, 2013 – Dec. 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
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 URL: https://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:
From USPS News Link:
CFO Joe Corbett has named Scott G. Davis the new Acting Controller VP. He is replacing Tim O’Reilly, who announced his pending retirement last month.
Davis previously served as SOX Management Control and Integration Manager. He also has worked as San Mateo Accounting Service Center Manager, Assets and Payables Manager, and District Finance Manager.
Davis holds a doctorate and master’s degree in business administration and is a certified public accountant. He is an Advanced Leadership Program graduate, a certified Lean Six Sigma Green Belt and is currently working on a project to obtain his Black Belt certification.
The Republican controlled House Appropriations Committee included some interesting language in the report accompanying the bipartisan spending bill now before the House. Here’s what it had to say about the USPS effort to unload historic post offices for quick cash:
The Committee is concerned by reports that the Postal Service is attempting to sell off many of its historic properties without regard for the preservation of these buildings. The Committee is particularly concerned that the Postal Service may not be following Section 106 of the National Historic Preservation Act in the relocation and sales process of these historic properties. The Committee notes that the Office of the Inspector General is currently conducting an investigation into whether the Postal Service is complying with its statutory and regulatory requirements in the relocation of services, closure, and sale of these types of properties. Until such an analysis is complete, the Committee believes the Postal Service should refrain from the relocation of services from historic post offices, and believes the Postal Service should suspend the sale of any historic post office.
For more, see Save the Post Office: Representatives Serrano and Lee: Postal Service Must Halt Historic Buildings Sales
More on the spending bill, including the text: Senate Amendment to H.R. 3547–An Act to extend the application of certain space launch… | House Committee on Rules.
“Headlines across the country are shouting that the USPS lost billions of dollars again this year, but that’s a fallacy,” APWU President Mark Dimondstein said after the USPS released financial information for fiscal year 2013.
“If it weren’t for the congressional mandate to pre-fund health benefits for future retirees, the USPS would have shown a surplus of $600 million.” No other government agency or private company is required to make such payments, which cost the agency approximately $5.5 billion annually.
“The USPS is suffering from a manufactured crisis,” Dimondstein said. “But the fallout of the artificial crisis is real. Service has declined dramatically — mail takes days longer to arrive, carriers are delivering mail in the dark, lines at post offices are out the door – and good, union postal jobs are disappearing,” he said.
“The solution is clear: Congress must repeal the pre-funding mandate and allow the Postal Service to develop new services that will provide new revenue,” the union president said.
The recent USPS agreement to deliver Amazon’s packages on Sundays is a good example, Dimondstein said, but the Postal Service must do more.
“The USPS should offer basic banking service to the millions of Americans who want a non-profit alternative to the big banks or who don’t have bank accounts at all,” he said. “This would give the working poor an alternative to the legal loan-sharking they are now victimized by. It also would provide another source of revenue. The Postal Service also should offer notary services and licensing.” There are many other examples, he said.
“Unfortunately, there are some in Congress who want the Postal Service to fail. They are eager to privatize it,” Dimondstein.
But the American people don’t agree. Dimondstein is calling for a “grand alliance” to save the USPS as a public postal service and to protect postal jobs.
Nov. 15, 2013–Statement by Fredric Rolando, president of the National Association of Letter Carriers:
The USPS today reported an operating profit of $600 million for fiscal 2013, but a net loss of $5 billion due to the 2006 congressional mandate to massively pre-fund future retiree health benefits. This mandate–a political requirement placed on no other agency or company in the country–cost $5.6 billion.
That means the Postal Service, which doesn’t get a dime of taxpayer money, earned a profit of $600 million delivering the mail. In 2012, the agency reported an operating loss of $4.8 billion and a total loss of $15.9 billion due to a pre-funding expense of $11.1 billion.
The dramatic improvement in postal finances announced today by the U.S. Postal Service is great news for 300 million Americans and millions of business relying on USPS for the world’s most affordable delivery service.
As the economy recovers from the Great Recession, the trends underlying this performance bode well for the future. Mail revenue largely stabilized over the past year, down just 2 percent, while revenue from package deliveries skyrocketed by 8 percent as online shopping increased. This shows that the Internet is not a threat to the Postal Service, but an opportunity.
Exciting developments, such as the recently announced USPS-Amazon Sunday package delivery program, reinforce these positive trends.
Now it’s time for Congress to set aside bills that focus on cutting service and attacking the pay and benefits of postal workers instead of addressing the real cause of the crisis: the 2006 pre-funding mandate.
The Postal Service is positioned for a strong comeback if lawmakers act sensibly–by addressing the pre-funding fiasco that created an artificial financial crisis, and by freeing the Postal Service to use its universal retail and delivery networks to innovate and grow.