The U.S. Postal Service: Is there hope?


No doubt about it: The U.S. Postal Service’s third-quarter financial report was–on the surface–a bloodbath. With $5.2 billion in red ink spilled in just three months, you might think Freddy Krueger was keeping the books.

Amid all the gore, though, the numbers reflect some faint flickers of hope. The question is whether those glimmers represent: (1) A blip; or (2) An early sign that finances are at least stabilizing, if not actually turning around.

USPS leaders are naturally eager to accentuate the positive, particularly after this month’s failure to make a required $5.5 billion payment into a fund for future retiree health care. During a conference call with reporters last Thursday, acting Chief Financial Officer Stephen Masse called it “unfortunate” that attention focused on those requirements often overshadows the agency’s success “in growing the business.” A case in point was the continued expansion of package and shipping services, where revenue was up by about 10 percent (or almost $950 million) for the first nine months of fiscal 2012 from last October through June.

Longer-term, there is evidence that the Postal Service’s financial slide is bottoming out. Here are the mail carrier’s operating revenues at the nine-month point for every fiscal year since 2007.  (Note, incidentally, the recession’s devastating impact in 2009.)

2007: $56.3 billion

2008: $57.2 billion  +1.7%

2009: $52.4 billion  -8.4%

2010: $51.1 billion  -2.4%

2011: $49.9 billion -2.4%

2012: $49.5 billion -.72%

As you can see, revenue for this year almost (but not quite) held steady with last year’s figure. The numbers are still headed in the wrong direction, but at least not as quickly. Other benchmarks aren’t so encouraging. Total mail volume dropped 3.6 percent in the three-month quarter from April through June, a significantly larger decline than in the same period a year ago.

At the same time, however, two big restructuring/downsizing efforts mentioned in the report are gaining traction, thanks in part to what appears to be some politically astute retrenchment.

Just four months ago, for example, a plan to close up to 3,700 post offices was withering on Capitol Hill. For lawmakers eager to score election-year points, defending the sanctity of small-town P.O.s was a godsend.  Also in trouble was the push to close or consolidate almost half of about 460 mail processing plants by the end of next year.

What happened? In May, USPS officials dropped the post office closure plan in favor of cutting customer service hours at some 13,000 facilities–but leaving them open. So far, Congress is going along; the projected long-term savings of a half-billion dollars annually are actually more than what had been anticipated from the original closing plan.

On consolidation of the processing plant network, the Postal Service backed off its original schedule and deferred most of the pain until after the November elections. Still, it has made a start toward what is supposed to be a savings of some $2 billion a year.

Of course, any progress is relative and the list of long-range challenges is daunting: The continued loss of business to the Internet; workers’ compensation costs that threaten a cash crunch this October; and Congress’ reluctance thus far to drop or soften the retiree health care pre-funding requirement. Also, the Postal Service is currently benefiting from a boomlet in election-year mail that could bring in an extra $300 million this fall. Come January and revenues will resume their nosedive, said Gene del Polito, president of the Association for Postal Commerce.

Still, it’s worth remembering that at this time a year ago, USPS officials were predicting that the agency would be broke by now. That didn’t happen and it suggests some unexpected–and badly needed–resilience.



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  1. this article fails to factor in the “stupidity factor” related to postmaster donahoe and his customer service slashing policies
    he has forced upon the postal service’s customers for years. donahoe continues to trash the ‘service’ in the u s postal service and continues to make customers jump through hoops
    and tolerate longer lines and slower mail delivery. revenue will continue to decline as long as donahoe continues to implement policies that treat postal customers like an annoyance instead of a valuable asset.

  2. 15 yrs ago, i had been reporting about mailing copany’s MTE abuse, like dismantled GPMC’S wheel and using it as their own storage bin or 100 tubbs used as parts storage and handtruck became mailer’s own transportation,never leave their premises.
    i told them(very not smart manager) it will cost $ million to maimtain and manufacture more body had listen to me. now? i don’t know if it is too late.

  3. tom the letter carrier on

    Congressman Issa is too busy with election year grandstanding regarding “operation fast and furious” to deal with the Postal Service’s real problems. His committee in the house is where Postal Reform is stuck.
    Perhaps some rural Republican congressmen need to remind him that small town America needs the Postal Service!


  5. The postal service should be scraped. With paperless billing and electronic signatures we will do well. UPS and FEDEX do a fine job with delivery of products.

  6. Except that the USPS delivers a HUGE amount of USPS and Fed Ex packages EVERYDAY. They know that WE can do it for lower costs due to us being everywhere 6 days a week

  7. The post office has the monopoly on mail boxes and should concentrate on packages less than 5lbs. These packages could fit it mailboxes, cluster box units,apartment style security mailboxes and package lockers, etc.

  8. Anyone who thinks that UPS or Fedex or anyone else already out there who delivers just, repeat JUST packages, could take on mail delivery without prices at least quadrupling dosen’t have a brain in their head. Scrap the Post Office?…….Next time Ron you have an important letter to mail, take .50 cents of fuel, put it in your car, and see how far you get down the road to deliver it……..I’m sure the extra pennies will get you where you need to go……

  9. Well said, Mike D.

    FedX and UPS will not deliver mail to every address like we do. In fact, we end up delivering some of their packages. I’m sure the general public has no idea of that. Or the why.

  10. To the dude who said next time you have an important letter to mail,put .50 in your gas tank.Sorry my man but nobody is mailing a letter anymore unless your 84 years old and it’s a birthday card to a grandkid.That’s one of the reasons their broke.They are becoming obsolete and people do not use them anymore.With every year that goes by there are millions that quit mailing anything and the one’s that do get hammered with million dollar stamps so they quit too.See how that works.Nobody has to mail in anything anymore,you can pay all your bills for free on line and even scan a check by phone right into your account.Post office is finished,the only ones crying are the ones that work there and retire with fat pensions and life time payed healthcare at a young age.It’s all over but the crying.A contract that say’s your not allowed to layoff,really.No wonder your broke.You have a monopoly and your bankrupt.Perfect government operation.Time to put the little shorts away with the eagle on them and go get a job now.I’m sorry,it just has to happen,let it happen.Love it.

  11. To SoulSteeler Says
    Once the USPS is gone ,how long do you think your free online bill pay will last.Do you think the banks are stupid.Just like when they tried to put a fee on your debit card.When they are the only game in town.You could always use the FEDX over night.
    To day on my route I delivered 2 UPS (com.del.) and pick up a FEDEX over night (big bucks) that was left a vacant address.
    FYI my free health care is not FREE now or when I retire.

  12. Those of us who live in extreme rural America depend on our mail service for medicine and parcels. The constitution mandates mail delivery to every address in the nation. Do you think Fed Ex or UPS will deliver where it is not profitable? Stop discriminating against rural America the backbone of America where your crops, beef and pork are raised.

  13. Unlike private corporations like FEDEX (who do a great job), the post office must, by law, deliver mail at the same price to every single part of the country no matter how remote.

    Think about it: In times of crisis, the post office may be the only means of communications, of moving money, etc.

    It cannot go broke and disappear–period.

    I should think increasing revenue could be accomplished by substantially raising the rates on “junk mail” (such as raising the rate by 100%) and modestly raising the first class postage rate to 50 cents for a letter one ounce or under.

    If the volume of junk mail decreases, then the personnel cuts are better justified. If the volume remains the same, as I suspect would be the case because even doubling the rate is one helluva bargain for mass mailers, then the revenue issue is solved.

  14. Sorry Mike but that hasn’t happened in years. I do have two postage paid envelops sitting on the counter waiting to mail. I’m trying to get off more useless mailing lists.

  15. In response to “clerk says” here in Wyoming in very rural area the P.O. will not deliver any package including one handed over by UPS. When I have a package delivered by UPS or Fedex they come to the door during a blizzard. Not kidding. The rural carrier is rude and the PostMaster is also rude. Pay a visit to the Thayne Wy post office sometime.

  16. What the hell is NFTI and why can’t I come up with this (presumably) taxpayer-funded whateveritis in half an hour of websearching?

  17. The USPS system of promotion and bonuses must be revamped in order to get the most bang for the dollar (buck). I know that management has stated that wages, awards and bonuses have been frozen but the fact remains that the incentive for management to screw up and not be held accountable is still alive and well. Old postmaster Runyon implemented the bonus program and the pces and eas management promotion scale. This is all a farce and must be changed in order to improve the USPS. Management has approx 100,000 individuals in positions that the USPS deem necessary and those 100,000 management personnel receive over 2/3 of the cost for labor. The clerks, letter carriers, mail handlers and maintaince staff at the USPS numbers in the 400,000 range and receive 1/3 of the cost in salary. The top side is burden with lazy and incompetent managers all through the ranks from Postmaster General Donahoe down to the floor supervisors. No accountability is placed upon management and they are allowed to create their own false paperwork to any item without accurrate information and data. Just look at the closing and AMP studies. All lies and misinformation.

  18. The Postal Service might be guilty of a lot of things but over pricing their products is not one of the them. The United States Postal Service is still the “Best Deal” around. If if you take a letter or a package a couple of blocks from where you llive, the gas alone will far exceed what the Postal Service charges for postage. The Airlines charges a person hundreds of dollars with little of no complaints. The Postal Service delivers your mail thousands of miles for less than a dollar. A loaf of bread that you go to your neighborhood store to buy cost you almost two dollars, to deliver your letters anywhere in the united states cost you less than fifty cents,and most people have the nerve to say the Postal Service charges too much. I don’t know about you but from where I stand, the United States Postal Service is still the “Best Deal” around.

  19. I agree Paul. The same thing led to Communist Russia’s down fall. The USPS is the last great bastion of a Communist System IMHO.

  20. US Postal Service organizational problems; compounded by the rapidly escallating cost of Postage Stamps; potential of future Saturday Services cancelled; causes financial havoc to individual family finances. USPS has become unreliable these past few years. It takes 4-6 days to deliver a bill payment. The American Utilities companies (Gas; Water; Electric; Telephone; Television/Cable) send out their Monthly Billing Statements 2-3 weeks before monthly Service Period Due Date, and then charging exhorbitant Late Fees. The poor/unreliable US Postal Service is contributing with their delays to loss of millions of dollars by these American families. To protect themselves from this ever-moving schedule (aiming-stake), Families are having to add even more additional days onto their Utilities Payment schedules just to protect themselves from price-gouging Late Fees (paying 3-4 weeks in advance for services). The Utilities companies are then getting rich by immediately cashing those early Payment Checks and investing the Money Float on hundreds of millions of dollars each month (between USPS delayed payment date & Services Performance Period date). If the US Government is truly interested in helping struggling families and small businesses, why doesn’t the Commerce Department, or the Utilities Regulators, make a law that states all Payments are considered to be paid on the date payment is deposited into the USPS with Postal Mark? Then let the Utilities and the USPS haggle over which organization is the real cause of these troubles, instead of forcing that burden upon the American people.

  21. Now this just not he lame response from the post office. Get a clue “YOUR LOOSING MONEY!!” What planet do you live on not to know this. Nobody wants to loose a good paying job but come on now, you got to change with the times. There is no more pony express – Why? Because the USPS managers of that time knew that they had to change In-order to keep up with technology? Are the managers of those years smarter than those in this day and age? Get a clue guys and gals of the USPS!

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