How Many Years Has The Post Office Lost Money?

The U.S. Postal Service lost money in six out of the 10 years from 2001 through 2010, according to its financial reports. By the end of the decade, the semi-independent government agency ‘s losses had reached a record $8.5 billion, forcing the Postal Service to consider seeking an increase in its $15 billion debt ceiling or face insolvency.
USPS has reported net losses of nearly $100 billion since 2007. That stems in part from 2006 legislation that required that the agency pre-fund more than $120 billion in retiree healthcare and pension liabilities, a requirement that labor unions have called an unfair burden not shared by other businesses.
The government-run U.S. Postal Service began in 2020 with a dubious track record. It has lost money in each of the past 13 years. In 2019, USPS made $514 million more in revenue than it did in its previous fiscal year, thanks to increases in postage rates and its package delivery business.

How much money does the post office make a year?

The Postal Service is a secret giant, generating about $71 billion in annual sales, including $23 billion in parcel revenue during 2019. UPS had about $76 billion in sales and $46 billion in U.S

Should taxpayers subsidize the losses of the US Postal Service?

One option for addressing the financial problems at the Postal Service would be simply to have taxpayers subsidize the losses. A post office that loses a few billion dollars a year is affordable for a country with a GDP of $20 trillion. The concept that the Postal Service should be financially self-supporting has always been somewhat arbitrary.

How much debt does the US Postal Service have?

The agency paid off $2.2 billion in debt during the year, but still has $11 billion outstanding. The Postal Service recently issued its largest-ever increase in the price of a stamp, but is currently fighting a legal battle to ensure its implementation.

How much money does the post office make a year?

The Postal Service is a secret giant, generating about $71 billion in annual sales, including $23 billion in parcel revenue during 2019. UPS had about $76 billion in sales and $46 billion in U.S

Why does the USPs have $11 billion a year?

That is because as mentioned above, the USPS has some unusual expenses, imposed by Congress, that artificially depress earnings. In 2006, Congress essentially told the post office to set aside $110 billion over 10 years. That, by our math, is $11 billion a year.

Why is the postal service in financial trouble?

The Postal Service, an independent agency, is trying to stay financially afloat as it seeks to invest billions in new delivery trucks to get packages more nimbly to American homes.

Why Does the US Postal Service Lose Money?

According to the United States Postal Service’s financial records, the postal service lost money in six of the ten years between 2001 and 2010.Losses for the semi-independent government agency hit an all-time high of $8.5 billion by the end of the decade, causing the Postal Service to contemplate requesting an increase in its $15 billion debt cap, or risk going bankrupt.Despite the fact that the Postal Service is losing money, it does not get any tax revenue to cover its operational expenditures and instead relies on the sale of stamps, products, and services to cover its costs.As a result of the recession, which began in December 2007, and large drops in mail volume as a result of changes in how Americans interact in the age of the Internet, according to the agency, the losses were incurred.

In order to save money, the Postal Service is exploring a variety of cost-cutting measures, including the closure of as many as 3,700 facilities, the elimination of needless travel expenses, the termination of Saturday mail service, and the reduction of delivery days to only three days per week.

When Postal Service Losses Began

For many years before the Internet became widely available to the general public in the United States, the Postal Service had billion-dollar surpluses.After a 2006 law was passed, forcing the Postal Service to prefund retired employees’ health benefits, the Postal Service suffered its most substantial financial losses in the second half of that decade, specifically in 2001 and 2003.According to the Postal Accountability and Enhancement Act of 2006, the United States Postal Service (USPS) is obliged to pay between $5.4 billion and $5.8 billion per year until 2016 to cover future retiree health benefits.Check check this article: How to Find Postal Service Jobs Without Being Scammed.

In a statement, the Postal Service stated that ″we must pay today for benefits that will not be handed out until some future date.″ ″Other government agencies, as well as the vast majority of private sector businesses, operate on a ‘pay-as-you-go’ basis, in which the organization pays premiums as they are invoiced.The financial requirement, in its existing form, is a significant contributor to postal losses.″

Postal Services Seeks Changes

Despite claiming to have achieved ″substantial cost savings in areas within its control″ by 2011, the Postal Service stated that it required Congress to adopt numerous further steps in order to improve its financial picture.These reforms include eliminating mandatory retiree health benefit pre-payments, requiring the federal government to return overpayments from the Civil Service Retirement System and Federal Employee Retirement System to the Postal Service, and allowing the Postal Service to determine the frequency with which mail is delivered to its customers and employees.

Postal Service Net Income/Loss By Year

  • In 2021, a projected $9.7 billion loss will be experienced
  • in 2020, a projected $9.2 billion loss will be experienced
  • in 2019, an estimated $8.8 billion loss will be experienced
  • in 2018, a projected $3.9 billion loss will be experienced
  • in 2017, an estimated $2.7 billion loss will be experienced
  • in 2016, a projected $5.6 billion loss will be experienced
  • in 2012, a projected $15.9 billion loss will be experienced
  • in 2011, a projected $5 billion loss will be experienced
  • in 2006,

USPS Announces 10-Year Plan to Save Itself

  • In March 2021, Postmaster General Louis DeJoy unveiled his strategic plan, which aims to save the United States Postal Service $160 billion over the next decade while also positioning the agency more firmly in the lucrative package delivery market, which is increasing at an alarming rate.
  • Prices would be raised, delivery schedules would be lengthened, and post office hours would be reduced, among other less-noticeable actions.
  • DeJoy’s 10-year program, ″Delivering for America,″ proposes for first-class mail to be sent cross-country on trucks rather than airplanes, and for the projected delivery time range for first-class mail to be extended from three to five days rather than three.
  • On the other side, the strategy provides new goods that will assist business shippers in moving items more effectively across long distances more quickly.
  • According to the United States Postal Service, its package delivery industry would expand by as much as 11 percent percent through 2025 if people continue to purchase online in the same manner as they did before and during the epidemic.
  • As part of its efforts to accelerate shipping, the agency wants to open 45 package processing annexes around the country, and it will look to replace mail sorting equipment with high-speed package sorters in the future.
  • It was revealed on May 28, 2021, that the United States Postal Service had proposed the first rise in the price of a first-class stamp since it was originally introduced on January 27, 2019.

According to expectations, the Postal Regulatory Commission will approve an increase in the price of a first-class stamp that will take effect on August 29, 2021, from 55 cents to 58 cents.The price of a postcard would rise to 40 cents from 36 cents, and the price of an international letter would rise to $1.30 from $1.20.

The Post Office Is Always Losing Money. It’s Not Its Fault.

  • The United States Postal Service, an entity that has existed longer than the United States itself, is receiving more attention than it probably likes as the fight about financing and cost reductions heats up.
  • Louis DeJoy, the Postmaster General, began testifying at a Senate committee on Friday and continued his testimony in a House hearing on Monday.
  • The finances of the United States Postal Service, as well as its capacity to distribute mail-in ballots for the November election in a timely manner, have obvious political ramifications.
  • In addition, important publicly listed corporations have a great deal at risk as well.
  • The post office, of course, is a well-known institution.
  • Every American has had some sort of connection with the United States Postal Service, but that doesn’t make the present fight any easier to comprehend.
  • Here is what investors should be aware of, as well as some recent historical information.
What’s Going On
  • Speaker Nancy Pelosi brought the House of Representatives back from its August holiday earlier this week in order to vote on a bill that would prevent certain cost reduction at the United States Postal Service.
  • It is also part of a larger attempt by Louis DeJoy, the new Postmaster General, to bring losses under control.
  • Later in the week, the United States Postal Service indicated that the reductions, which included removing mailboxes and mail-processing equipment, would be suspended after the November election.
  • The United States Postal Service had a $2.2 billion loss in the most recently reported quarter.
  • As a result of the epidemic, the amount of mail—letters rather than packages—has decreased more quickly than anticipated.
  • The United States Postal Service (USPS) received $10 billion in financing under the Cares Act to assist mitigate the worst consequences of the epidemic.
  • Even if more cash as part of a second stimulus package is being explored, the Postal Service has warned that it cannot guarantee that all mail-in ballots will be delivered in time to be counted if they are received close to election day.
Why Does the Post Office “Lose Money”?
  • There are four major reasons why the United States Postal Service is less lucrative than the logistics corporations with which it competes: As a starting point, there is no reason why the post office should be profitable.
  • It is essentially a federal agency with a duty to provide universal service.
  • Postage to rural America is the same price as it is to send a letter within heavily populated cities, yet publicly listed logistics businesses charge extra for delivery to locations that are off the usual path.
  • Second, the United States Postal Service (USPS) does not have direct influence over the cost of mailing a letter.
  • For example, in 2016, Congress reversed a 2-cent rise in the price of stamps because legislators determined that the Postal Service had recovered the sales decreases linked with the financial crisis of 2008-2009.
  • The price of a stamp is a matter of political contention.
  • Whether you choose FedEx (ticker: FDX) or United Parcel Service (UPS), the cost of shipping your cargo is just a matter of competition and strategy.

In addition, Congress put increased expenditures on the United States Postal Service about 2006, in part because the service was becoming too lucrative.Finally, we can point the finger to the internet: The amount of mail being sent is decreasing.Managing declining demand in a company’s most profitable business division is difficult for any organization.Growth aids in the absorption of fixed expenses and the recruitment of new, lower-priced personnel to help balance legacy liabilities in any firm.

Cash Versus Earnings
  • Although the USPS is losing money, its cash flow has become more steady.
  • This is due to the fact that, as previously stated, the USPS has some exceptional expenditures that were imposed by Congress and which artificially reduce earnings.
  • On the surface, Congress directed the Postal Service to set aside $110 billion over a ten-year period in 2006.
  • According to our calculations, this amounts to $11 billion every year.
  • UPS, on the other hand, recorded an annual free cash flow of around $6.4 billion in fiscal year 2018.
  • The requirement had a negative impact on cash flow until the post office could no longer bear the expenditure.
  • Now, the Postal Service just registers the expense on its books, reducing its bottom line, but without putting aside any money for the expense.
Congress Did What?
  • It’s a big responsibility, but for what?
  • It was mandated by Congress that the Postal Service prefund its health-care commitments.
  • Aside from the government, no other corporation is required to do so, albeit companies are required to prefund pension liabilities, which became a requirement of the law in the 1970s.
  • Companies deposit money into a trust so that retirees may continue to receive their benefits even if the company goes out of business.
  • Corporate health-care benefits are reimbursed as and when they are used.
  • In essence, Congress determined that the United States Postal Service (USPS) should go above and beyond what companies do by collecting a portion of its revenues and utilizing them to prefund health care as if it were a pension.
  • It is a claim on the financial flow of the United States Postal Service that other entities are not required to answer.

Employees, of course, have a right to health insurance.The question is whether the United States Postal Service will pay those benefits when they are incurred or whether it will rely on a massive amount of trust that has been built up very fast as a result of a Congressional mandate.

The Postmaster General
  • It was Benjamin Franklin—yes, the same Ben Franklin—who was designated as the first postmaster general in 1775, a year before the signing of the Declaration of Independence.
  • As the 75th Postmaster General, Louis DeJoy succeeds him as his 74th successor.
  • DeJoy was the CEO of New Breed Logistics, which was acquired by XPO Logistics (XPO) in 2014 for $615 million.
  • DeJoy subsequently went on to work at XPO, where she eventually became a member of its board of directors.
  • In 2018, he resigned from the board of directors.
  • Has DeJoy made any contributions to the campaign to re-elect President Donald Trump?
  • Yes.

Barron, on the other hand, believes that his resume qualifies him for the position.

How Big Is the USPS?
  • With around $71 billion in yearly revenues, including $23 billion in parcel income throughout 2019, the United States Postal Service is a hidden powerhouse.
  • UPS generated around $76 billion in sales and $46 billion in package revenue in the United States during that time period, whereas FedEx generated $69 billion in sales and $48 billion in package revenue.
  • If the United States Postal Service (USPS) were to go public, it would be worth between $50 billion and $70 billion, depending on its profitability and size.
  • This comfortably places it as the third-largest non-rail logistics firm in the United States in terms of value.
  • UPS is currently valued at around $167 billion, including its debt.
  • FedEx has a market capitalization of around $76 billion.
  • After UPS and FedEx, and with the exception of railroads, logistics firms rapidly shrink in size.
See also:  How To Find Last 4 Digits Of Zip Code?

According to revenue, Expeditors International of Washington (EXPD) and C.H.Robinson Worldwide (CHRW) are two of the next largest logistics companies in the United States.Unlike UPS and FedEx, they just organize shipments and do not hold the same networks of assets as those companies.Each of them is valued less than $15 billion dollars.

Mail-In Ballots

According to the United States Election Assistance Commission, mail-in ballots were used to cast approximately 24 percent of all votes in 2016. This equates to more than 33 million votes cast across the country, however the number is projected to be greater this autumn due to the influenza outbreak.

What It All Means for Stocks
  • What is it that investors should be concerned about?
  • The parcel-shipping sector is an oligopoly in that there are only a limited number of rivals, and each of them has a substantial impact on the dynamics of the market.
  • It is possible that the Postal Service’s difficulties may benefit UPS and FedEx if the Postal Service loses market share or hikes prices, as Trump desires.
  • UPS and FedEx stock have gained 37 percent and 38 percent, respectively, year to far, outpacing the gains made by the Dow Jones Industrial Average and the S&P 500, which are comparable.
  • One of the primary reasons is the increase in delivery volume that has occurred as a result of the epidemic.
  • The United States Postal Service’s parcel-shipping business is thriving as well, but its marketing-mail operation is suffering as a result of the recession.
  • Send correspondence to Al Root at [email protected]

The Post Office Has a Financial Problem, Not a Crisis

  • Continue to do excellent work.
  • Photograph courtesy of Alexi Rosenfeld/Getty Images In accordance with official explanations, recent service modifications at the United States Postal Service (USPS) are the consequence of continuous financial difficulties at the USPS that have been exacerbated by the COVID-19 epidemic.
  • The Postal Service may determine that it doesn’t require as many sorting machines as it had in the past as a result of falling volumes of paper mail, which includes a particularly steep reduction in junk mail volume, among other factors.
  • It is designed to conserve labor expenses by implementing operational modifications that have resulted in a delay in mail delivery, with postal carriers being directed to leave mail unsorted and undelivered rather than earn extra hours.
  • Nonetheless, with President Trump openly attacking the mail-in voting process, declaring that the United States Postal Service (USPS) lacks the financial resources to deliver ballots en masse, and asserting that he is unwilling to provide additional financial resources, voters and Democratic legislators are reasonably suspicious of the motivation behind recent service changes at the Postal Service and the impact they may have on ballot delivery times.
  • So let us have a look at the financial difficulties that the United States Postal Service is currently experiencing.
  • Contrary to the numerous difficulties it has had throughout the COVID-19 issue, the United States Postal Service recorded a little lesser net loss in the quarter that ended June 30 than it did in the same quarter of the previous year.

In part, this was due to coronavirus-accelerated declines in first-class mail and notably marketing mail (the official name for junk mail), which were more than offset by a large increase in package volumes, as more Americans stayed at home and did their shopping online during the outbreak.However, while the decline in letter quantities was significant (first-class mail was down 8 percent from the previous year, and junk mail was down 36 percent), the increase in package volumes, which increased by 50 percent, was even more striking.Taking everything into everything, the Postal Service recorded a $2.2 billion deficit on receipts of $17.6 billion in the third quarter.Those losses are partially — but not completely — due to the post office’s responsibility to set aside funds for retiree benefits that were given to employees in the past (but for which no money had been set aside in advance).

The Postal Service reported an adjusted net loss of approximately $1.3 billion for the third quarter, or approximately 7 percent of revenues, after subtracting approximately $900 million in costs to amortize those unfunded liabilities (costs that should really be attributed to the Postal Service’s previous years of operation, not to this year).There are several reasons to be concerned that the Postal Service’s losses will continue to worsen.Businesses who have reduced their mail-marketing expenditures or switched to internet marketing may find that they do not need to send as much junk mail until the epidemic has passed, if it does at all.

  1. And the surge in parcel revenue that has helped to offset the recent decline in paper-mail revenue — shipping and package revenues increased even faster than package volumes this spring, bringing in $8.3 billion this spring compared to $5.4 billion last spring — may not be able to maintain its momentum.
  2. In recent years, firms such as Amazon have established their own delivery divisions in order to lessen their reliance on the United States Postal Service (USPS) and private delivery companies such as UPS and FedEx.
  3. Because of the large number of online purchases placed during the epidemic, many online businesses were obliged to rely on the Postal Service’s delivery capability.
  4. However, in the long run, merchants such as Amazon may opt to establish their own internal delivery infrastructures, so displacing the post office from its position of dominance.
  • The Postal Service will be more likely to listen to President Trump, who has demanded that the USPS raise its rates for delivering packages — a demand that may have been influenced by the fact that Amazon’s founder, Jeff Bezos, also owns the Washington Post — if the Postal Service follows through on his demand (a newspaper whose coverage has often annoyed the president).
  • Earlier this week, the president tweeted that corporations such as Amazon should be charged ″much more″ for package delivery and that such companies should not pass on the extra cost of doing business to their customers (which is not how markets work).
  • Increasing delivery costs for Amazon would almost certainly result in a mix of decreased earnings, higher consumer prices, and a smaller volume of parcels sent to the post office, according to the company.
  • It is unclear what, if anything, this would accomplish in terms of improving the Postal Service’s financial situation.
  • One approach for dealing with the financial troubles at the Postal Service would be to simply ask taxpayers to cover the costs of the service’s losses.
  1. When you have a GDP of $20 trillion, a post office with a few billion dollars in annual losses isn’t that bad of a proposition.
  2. The notion that the United States Postal Service should be financially self-sufficient has always seemed a little arbitrary to me.
  3. Not only is the United States Postal Service not a company, but it is also not regarded as such under the law.
  4. Certain money-losing service duties have been imposed on it as a result of well determined policy considerations.
  5. Most crucially, the United States Postal Service is mandated to deliver first-class mail at a fixed price throughout the whole country – even in areas where delivery expenses per item are quite expensive.
  1. The company also enjoys an uncontested monopoly in the first-class and junk-mail industries, which allows it to charge higher rates and make bigger profits than it otherwise would be able to.
  2. It was long believed that the financial benefit of this monopoly was sufficient to support the United States Postal Service’s service duties without the need for external assistance.
  3. If such is no longer the case, it does not necessarily follow that the policy rationale for the money-losing service has been removed from the table entirely.
  4. Customers of the United States Postal Service (USPS) essentially subsidized the money-losing services by paying more for letter delivery than they would have paid in a regular competitive market under the previous system.
  5. It may become essential in the future for taxpayers to contribute to the cost of these services through government subsidies.

At the same time, the possibility of a postal subsidy should be thoroughly studied.The president has encouraged the Postal Service to boost the pricing of its competitive products in order to compete more effectively.However, if the United States Postal Service boosts package delivery fees, it risks losing business to competitors such as UPS and FedEx, as well as to corporations such as Amazon, which are increasingly responsible for their own package delivery.In the past, postal authorities have stated that increasing package pricing will result in lower profits rather than increased profits.For example, allowing the Postal Service to hike rates more aggressively on its monopoly items — such as first-class mail and marketing mail — where it does not face as much competition may help it reduce some of its financial losses, according to one idea for legislators to examine.

The deterioration of public confidence in the United States Postal Service may also act as a deterrent to the adoption of essential and significant operational reforms.For example, I’m not sure if the number of sorting machines removed from post offices was proportionately reduced in response to the decrease in mail volume.In view of public concern, I believe that the organization’s decision to postpone additional changes until after the election was a wise one on their part.(However, it appears that the majority of sorting-machine removals had already been accomplished prior to the notification, making the news less than encouraging.) Less paper mail is beneficial to the economy and the environment in the long run.If the Postal Service is not allowed to adjust its operations and assets to reflect the new reality of the services it is providing (less mail, more packages), the financial losses to the service may be greater than the financial losses required to fulfill its social mission in the long run.

  1. As a result, it is critical that the next president pick postal officials who demonstrate that they do not regard the organization as a company or a political institution, but rather as a service dedicated to accomplishing a defined objective at the lowest feasible cost.
  2. The Postal Service is experiencing financial difficulties rather than a crisis.

Postal Service Doubles Annual Losses to $8.8 Billion

  • A list of cookies Generally speaking, a cookie is a little piece of data (text file) that a website requests to be stored on a user’s device when a website is visited by the user in order to remember information about the user, such as language choice or login information.
  • These cookies, which are referred to as first-party cookies, are placed by us.
  • As part of our advertising and marketing activities, we may also employ third-party cookies, which are cookies that originate from a domain other than the domain of the website you are currently viewing.
  • The following are the exact goals for which we employ cookies and other track-and-trace technologies: Cookies that are absolutely necessary There are certain cookies that we do not enable you to opt out of because they are required to maintain the correct operation of our website (for example, prompting our cookie banner and remembering your privacy preferences) and/or to analyze site performance.
  • In accordance with the CCPA, these cookies are not utilized in any way that constitutes a ″sale″ of your data.
  • You may configure your browser to block or notify you when these cookies are being used, but certain features of the site will not function properly if you do so.
  • These options are often found in the Options or Preferences menus of your browser’s options or preferences.

More information may be found at www.allaboutcookies.org.Cookies with a purpose There are certain cookies that we do not enable you to opt out of because they are required to maintain the correct operation of our website (for example, prompting our cookie banner and remembering your privacy preferences) and/or to analyze site performance.In accordance with the CCPA, these cookies are not utilized in any way that constitutes a ″sale″ of your data.You may configure your browser to block or notify you when these cookies are being used, but certain features of the site will not function properly if you do so.

These options are often found in the Options or Preferences menus of your browser’s options or preferences.More information may be found at www.allaboutcookies.org.Cookies that improve performance There are certain cookies that we do not enable you to opt out of because they are required to maintain the correct operation of our website (for example, prompting our cookie banner and remembering your privacy preferences) and/or to analyze site performance.

  1. In accordance with the CCPA, these cookies are not utilized in any way that constitutes a ″sale″ of your data.
  2. You may configure your browser to block or notify you when these cookies are being used, but certain features of the site will not function properly if you do so.
  3. These options are often found in the Options or Preferences menus of your browser’s options or preferences.
  4. More information may be found at www.allaboutcookies.org.
  • Personal Information is being sold.
  • Also, we use cookies to customize your experience on our websites, such as by determining the most relevant information and adverts to display to you, and we use cookies to analyze site traffic and performance in order to continually improve our websites and your experience.
  • By activating this toggle switch, you can choose not to allow us to utilize such cookies (and the resulting ″selling″ of your Personal Information) in the future.
  • Regardless matter the option you choose, you will still view some advertisements.
  • The fact that we do not track you across multiple devices, browsers, and GEMG properties means that your choices will have an impact solely on the browser you are using, the device you are using, and the website you are visiting.
  1. Cookies from social media sites Also, we use cookies to customize your experience on our websites, such as by determining the most relevant information and adverts to display to you, and we use cookies to analyze site traffic and performance in order to continually improve our websites and your experience.
  2. By activating this toggle switch, you can choose not to allow us to utilize such cookies (and the resulting ″selling″ of your Personal Information) in the future.
  3. Regardless matter the option you choose, you will still view some advertisements.
  4. The fact that we do not track you across multiple devices, browsers, and GEMG properties means that your choices will have an impact solely on the browser you are using, the device you are using, and the website you are visiting.
  5. Cookies with a specific purpose Also, we use cookies to customize your experience on our websites, such as by determining the most relevant information and adverts to display to you, and we use cookies to analyze site traffic and performance in order to continually improve our websites and your experience.
  1. By activating this toggle switch, you can choose not to allow us to utilize such cookies (and the resulting ″selling″ of your Personal Information) in the future.
  2. Regardless matter the option you choose, you will still view some advertisements.
  3. The fact that we do not track you across multiple devices, browsers, and GEMG properties means that your choices will have an impact solely on the browser you are using, the device you are using, and the website you are visiting.
See also:  What Post Office Is My Package At?

U.S. Postal Service marks 11 straight years of financial loss

  • Nation 14th of November, 2017 12:25 p.m.
  • EDT WASHINGTON — The U.S.
  • Department of State has issued a statement saying that For the 11th year in a row, the struggling United States Postal Service announced a financial loss on Tuesday, blaming dwindling mail traffic and the expense of its pension and health-care commitments, even as it forecast another good Christmas season of package deliveries in the coming months.
  • It argued for greater flexibility in raising stamp costs in order to keep up with customer demand for ever-faster delivery from online shopping, which is increasing.
  • ″Our financial performance will continue to suffer, and they will very certainly degrade at an accelerated rate,″ according to Postmaster General Megan J.
  • Brennan.
  • ″We are unable to produce enough money or eliminate enough expenditures to meet all of our obligations.″ The United States Postal Service reported a $2.7 billion deficit for the fiscal year that ended on September 30.

This was a significant improvement over the previous year’s loss of $5.6 billion, which was mostly attributable to variations in interest rates, which lowered workers’ compensation expenditures.The deficit in 2017 occurred as a result of a double-digit growth in package deliveries that was insufficient to compensate for declines in letter mail, which accounts for more than 70% of overall postal income.As consumers in the digital era rely increasingly on email for online bill payments, the volume of mail dropped by around 5 billion pieces, or 3.6 percent, in 2017.The total revenue for the year was $69.6 billion, a decrease from $71.5 billion the previous year.

It is expected that the Postal Regulatory Commission will release a ruling in the coming weeks that will give the Postal Service greater latitude to raise rates beyond the rate of inflation, marking the most significant change to the service’s pricing scheme in over half a century.Although the commission may set a cap on how high prices might rise, the cost of a first-class stamp may rise significantly.It is not known by how much of a margin.

  1. The price of a first-class stamp, which is now 49 cents, is set to rise by one penny in January as a result of rising inflation.
  2. When it comes to delivering items more quickly to American homes, the Postal Service, an autonomous agency, is attempting to stay financially solvent while it looks to invest billions in new delivery trucks to do so.
  3. With the impending Christmas season, Brennan said that the Postal Service has extended its hours to include package delivery in the early morning and evening, as well as increasing service on Sundays.
  4. More recently, it launched a test program over the Christmas season to provide low-cost next-day delivery, with goods being delivered to people’s homes on Sundays.
  • According to Brennan, ″the Postal Service continues to acquire e-commerce customers, develop our package delivery business, and improve market share,″ he added.
  • He attributed the service’s success in part to its lower price when compared to competitors UPS and FedEx.
  • ″No other carrier delivers as many e-commerce packages to consumers’ homes as we do,″ says the company.
  • Analysts have applauded the Postal Service’s commitment to delivering mail in the digital era.
  • Despite this, the company’s package success has not converted into profitability.
  1. In order to achieve financial stability, the Postal Service is also seeking Congress to exempt it from the requirement to prefund retiree health benefits until the end of the fiscal year.
  2. In 2006, legislation mandated that the United States Postal Service finance 75 years’ worth of retiree health benefits, something that neither the government nor private firms are obligated to do.
  3. Since 2012, the United States Postal Service has defaulted on the multibillion-dollar health prepayments it owes in order to avoid bankruptcy.
  4. Art Sackler, manager of the Coalition for a 21st Century Postal Service, a wide trade organization that includes mailers such as Amazon and the National Retail Federation, said the statistics were ″beyond disturbing.″ ″The postal system supports 7.5 million private-sector employment, and these jobs are at jeopardy until Congress takes action on postal reform.″ Left: Crates from the United States Postal Service (USPS) are stacked on the floor of the Brookland Post Office in Washington, D.C., United States.
  5. According to authorities with the United States Postal Service, no customer data was compromised in a recent data breach.
  1. The image is courtesy of Andrew Harrer/Bloomberg via Getty Images

There’s more than one reason the Postal Service is losing money

  • President Trump is being listened to.
  • Donald Trump, a former West Virginia senator, entered a guilty plea in a case filed on January 6.
  • Trump will visit a rally in Michigan in April.
  • Trump is considering withdrawing his backing of Brooks in the Alabama Senate race.
  • Furthermore, it is possible to obtain the idea that the United States Postal Service is unprofitable as a result of its undercharging of Amazon.com.
  • What is it about the United States Post Office, which is losing billions of dollars every year while charging Amazon and others so little to deliver their parcels, that is making Amazon richer while making the Post Office dumber and poorer?
  • ″ It was the president who screamed, ″We should be charging MUCH MORE!″ The United States Postal Service’s financial predicament, on the other hand, is not limited to parcel delivery.

Because its spending continue to outpace its profits, the Post Office is experiencing issues across the board.The Postal Service was created to be self-sufficient; unlike other federal agencies, it does not rely on money collected through taxes to fund its operations.More specifically, by charging for mail, it attempts to recover some of its operational expenditures.Sorting and carrying mail is a time-consuming and expensive undertaking.

The United States Postal Service (USPS) distributes mail to 157 million homes and post office boxes around the country (including Puerto Rico, the American Virgin Islands, etc.) It has a fleet of 230,000 trucks and other vehicles to assist it in transporting all of that mail.However, this is not the entire story.In addition, the USPS operates a vast retail business consisting of 31,000 post offices and another 4,000 contractor-run mail shops, each of which has its own set of overhead expenditures.

  1. The Postal Service only has a few measures at its disposal to keep its overhead under control.
  2. Legal and political obstacles stand in the way of its efforts to lower delivery frequency (which is now legislated to be six days per week) and close money-losing post office locations.
  3. In accordance with federal law, the great majority of all USPS posts are held by unionized government employees who are entitled to comprehensive job protection.
  4. An ill-fated effort by the United States Postal Service (USPS) to install postal counters at Staples demonstrates just how expensive these protections can be – this consumer friendly and inexpensive initiative was struck down by the National Labor Relations Board because it dared to allow Staples employees to sell postage and accept parcels for shipment.
  • The refusal to replace personnel who retire or leave has been the Postal Service’s go-to cost-cutting strategy for many years.
  • There are 300,000 fewer workers working for the agency today than there were a couple decades ago.
  • Nonetheless, the United States Postal Service has 500,000 employees and 600,000 retirees who are eligible for health and pension benefits.
  • As a result, the compensation expenses of the agency have increased by $2 billion since 2015.
  • The United States Postal Service recorded a $2.7 billion deficit this past year.
  1. The reason for this may be found on the revenue side of the ledger.
  2. The volume of mail is decreasing.
  3. Less mail means less money in your pocket.
  4. The United States Postal Service brought in $75 billion in income a decade ago; this year, it brought in just less than $70 billion.
  5. In 2006, the amount of mail reached a peak of 213 billion postal pieces; in 2017, it was 149 billion.
  1. That is a 30 percent decrease.
  2. The number of letters, postcards, marketing mail (often known as junk mail), and periodical publications being delivered has simply decreased as large mailers and the general public have transitioned to electronic delivery.
  3. The only exception to this trend is the number of shipments, which has gradually increased in recent years.
  4. The leadership of the United States Postal Service feels that transporting more packages is essential to the organization’s existence.
  5. However, that appears to be a little far-fetched.

Packages continue to constitute a meager part (four percent) of the total volume of mail carried by the postman.Furthermore, it is unclear if the USPS makes any money from the delivery of shipments.USPS income from boxes increased by a stunning 28 percent last year, yet the postal service’s accounting for the costs associated with transporting packages (which are plainly bigger than letters and magazines) is not included in either its annual report or year-end financial statement.The fact that I can purchase a polyester trombone case online for $20 — and that the United States Postal Service would ship it for a fraction of the purchase price all the way from California to Washington, DC — is amazing.You’ll have a difficult time finding a private courier who will work for so little money.

Add to this the fact that the United States Postal Service (USPS) has reported that its parcel revenue stream may be negatively impacted.Over time, the company’s major shipping clients are ″developing the technology that will allow them to redirect tonnage away from the Postal Service,″ the company says.(Examples include Amazon lockers, Uber delivery drivers, and other similar services.) The business model of the United States Postal Service is ineffective.In addition, private couriers and 21st century delivery modalities (drones and delivery robots, for example) are posing a significant threat to the company’s operations.Despite the efforts of its staff and leadership, the United States Postal Service is expected to continue to lose money.

  1. Making the Postal Service sustainable in the twenty-first century will necessitate a complete overhaul of the organization.
  2. Parcel prices set at profitable levels may be an element of that new paradigm, but more broad and comprehensive reform is required if taxpayers are not to find themselves in the position of having to bail out their postal system.
  3. R Street Institute, a free market think-tank in Washington, DC, is led by Kevin R.
  4. Kosar (@KevinKosar), who is the institute’s vice president of policy.

U.S. Postal Service reports $4.9 billion 2021 net loss

Workers of the United States Postal Service (USPS) load mail onto delivery trucks outside a post office in Royal Oak, Michigan, United States, on August 22, 2019. Rebecca Cook for Reuters

Register now for FREE unlimited access to Reuters.com
  • WASHINGTON, Nov 10 (Reuters) – The United States is stepping up its efforts to combat climate change.
  • The United States Postal Service (USPS) reported a net loss of $4.9 billion for the fiscal year that ended on September 30th, a little improvement from the previous year’s loss of $6 billion.
  • The United States Postal Service reported operational revenue of $77 billion for the fiscal year 2021, an increase of $3.9 billion, or 5.3 percent, over the previous year.
  • According to the company, it would lose $9.2 billion in 2020.
  • Postmaster General Louis DeJoy revealed in March a strategy to reduce projected losses by $160 billion over the next ten years, a measure that has garnered widespread support.
  • ″We have years of self-inflicted harm to repair, and doing so will compel us continuing to take some painful decisions,″ DeJoy said in a statement on Wednesday.

Register now for FREE unlimited access to Reuters.com
  • The United States Postal Service said that shipping and packaging income climbed by $3.5 billion, or 12.2 percent, in 2021, mostly due to a boom in e-commerce as a consequence of record holiday activity.
  • During the period 2001-2020, first-class mail volumes declined to 50.7 billion pieces, the lowest level since 1971 and a 51 percent decrease since 2001.
  • USPS has suffered with poor delivery performance over the last year, as a result of a significant increase in shipments and staffing challenges as a result of COVID-19.
  • However, DeJoy claimed the agency was prepared for a busy Christmas season.
  • ″We’re prepared,″ he stated.
  • As part of its attempts to eliminate red ink, the United States Postal Service (USPS) announced new service standards last month that cause certain first-class mail delivery to be delayed.
  • The new standards reduced one-to-three-day service requirements to one-to-five-day service standards, which will affect approximately 40% of first-class mail.

The United States Postal Service raised the price of first-class stamps to 58 cents from 55 cents in late August.Since 2007, the United States Postal Service has recorded net losses of approximately $100 billion.A large portion of this is due to legislation passed in 2006 requiring the agency to set aside $120 billion in retiree healthcare and pension liabilities, a mandate that labor unions have criticized as an unfair expense that is not borne by other firms.Congress is proposing a plan to offer the United States Postal Service with $46 billion in financial relief over the next ten years.

See also:  What Is The Zip Code For Kingston, Jamaica?

The idea would also eliminate the need that the USPS pre-fund retiree health benefits for a period of seventy-five years.Separately, Congress is considering paying the United States Postal Service $6 billion to acquire electric delivery cars and EV infrastructure.

Register now for FREE unlimited access to Reuters.com

David Shepardson contributed reporting from Washington. Matthew Lewis is in charge of the editing. The Thomson Reuters Trust Principles serve as our benchmarks.

Why The U.S. Post Office Is In Trouble – 678,539 Employees And A $9.2 Billion Loss In 2020

  • As a result of his prospective proposal to eliminate two-day first-class mail service and raise the cost of postage in order to make up for the billions of dollars in yearly USPS losses, the Postmaster General came under fire from members of Congress this week.
  • The United States Postal Service has a big budget, but it also has significant losses, and the problem dates back years.
  • According to the Postmaster General’s testimony before Congress, ″there is no end in sight″ to the agency’s budget troubles.
  • According to a study by the General Accountability Office (GAO), the United States Postal Service (USPS) has lost $69 billion over the preceding 11 fiscal years, including $3.9 billion in fiscal year 2018.
  • Then, in 2019, a $6.6 billion deficit that had been predicted turned into a $8.9 billion loss.
  • The Postal Service reported a $9.2 billion deficit in 2020, despite the fact that overall revenues climbed by $2 billion (to $73 billion) throughout the year.
  • Package delivery surged significantly (18.8 percent) during the pandemic, whereas first-class mail saw a 4.2 percent drop, and marketing mail experienced a 15.2 percent decline over the period.

In other words, a $1 increase in income resulted in a $1.15 rise in costs over the course of the year 2020.It appears that the more mail the Postal Service sends out, the more money they lose.The United States Postal Service has not been deterred from expanding its workforce despite sustained losses.Last year, the agency hired 163,257 new workers, the highest number in its history, resulting in a net gain of 54,867 new people on the payroll for the year.

According to Freedom of Information Act requests made by our auditors at OpenTheBooks.com, the United States Postal Service recruited 40,174 workers in 2019, 38,126 people in 2018, and 26,161 employees in 2017, for a sense of scale.And the check is on its way, especially for those who work for the United States Postal Service and make a lot of money.With a salary of $303,460, Postmaster General Louis DeJoy was the highest paid official in the country.

  1. Previously, Megan Brennan, who made $291,650 per year, resigned from her position in October of this year.
  2. In fact, the postmaster general makes more than genuine four-star generals in the United States, who receive $268,344 per year.
  3. DeJoy and Brennan are surrounded by a large number of people.
  4. In 2020, 50 workers of the United States Postal Service earned more than $200,000.
  • Only 29 employees made more than $200,000 in the preceding year, according to the company.
  • In 2020, an additional 5,346 employees, the majority of whom were executives and attorneys, earned more than $100,000.
  • Last July, Congress provided the United States Postal Service with a financial lifeline in the form of a $10 billion loan from the United States Treasury under the CARES Act, sometimes known as the coronavirus bailout bill.
  • He also claimed that the loan ″will buy time till a liquidity crisis occurs…″ In contrast, the Postal Service continues to be on an unsustainable course, and we will continue to concentrate our efforts on enhancing operating efficiency and implementing other reforms in order to put the Postal Service on a road toward long-term financial stability.″ Critics have said that the service has become ossified and that it is in desperate need of workplace change.
  • According to our research, the United States Postal Service does not have a forced retirement policy, which means that employees can continue to receive high wages for as long as they choose.
  1. Approximately 550 workers have worked for the company for at least 50 years; 8,500 have worked for the company for at least 40 years; 76,500 have worked for the company for at least 30 years; and 215,000 have worked for the company for at least 20 years.
  2. The United States Postal Service did not reply to our request for a statement.
  3. Defenders of the Postal Service would argue that the USPS could rely on its pool of experienced employees to assist create best-in-class solutions that would help to balance the budget.
  4. This was attempted by the executive suite in 2020.
  5. When they appointed Richard Uluski, who had retired in 2016 after a 36-year career and had been complimented by the then-Postmaster General for ″demonstrating great leadership and delivering outcomes,″ they were hailed as a success.
  1. Uluski’s new role is ″Executive Coach,″ with remuneration of $100 per hour and a statutory limit on the number of hours he may work.
  2. A spokeswoman for the United States Postal Service responded to our request for comment and gave more explanation.
  3. In accordance with the National Defense Authorization Act (NDAA), which was signed into law in December 2019, he (Uluski) is employed with us as a reemployed annuitant.
  4. Mr.
  5. Uluski is permitted to receive his Postal Service pension while still earning a government salary—with some restrictions, as specified in the contract.″ If the United States Postal Service is to continue, it must decide whether it will function like a private enterprise or like an agency of the federal government.

If it opts for the latter, it should be more open about how it uses its funds in the future.Despite the fact that it benefits from its status as a federal agency, the United States Postal Service (USPS) does not participate in usaspending.com, a searchable database of federal spending, contracts, and grants that was created by Senators Barack Obama (D-IL) and Tom Coburn (R-OK) in 2006 to promote transparency and accountability in government spending.The United States Postal Service has similarly refused our requests for access to its vendor checkbook expenditures under the Freedom of Information Act.Despite several Freedom of Information Act demands to make its spending checkbook visible, the United States Postal Service has so far refused to provide access to its financial information.In reality, USPS informed OpenTheBooks that disclosing its procurement records would jeopardize the integrity of its procurement process and the privacy of its contractors.

Consequently, while you may be able to monitor your mail in 2021, you will still be unable to track how individuals who handle your mail use public money in that same year.

Postal Service losing money because of congressional mandate not low prices, expert says

  • On April 24, President Trump threatened to veto a federal emergency loan for the United States Postal Service unless the agency hiked shipping rates for internet retailers, which it refused to do.
  • Trump’s remarks came during a signing ceremony for a $484 billion coronavirus relief program, which will benefit small companies and hospitals around the country.
  • Although low prices have contributed to the postal service’s financial woes, according to James O’Rourke, professor of management at the Mendoza College of Business at the University of Notre Dame, the agency’s financial woes are due far more to a constraining congressional mandate than to cheap pricing.
  • In his statement, O’Rourke stated, ″The Trump administration is incorrect in its allegation that the postal service is losing money ‘every time they deliver out a box for Amazon and other Internet corporations.’″ ″At the absolute least, the existing deal with Amazon, and likely with other online sellers, is a break-even arrangement,″ says the author.
  • Due to a congressionally mandated retiree healthcare financing program that no other government agency is forced to follow, the United States Postal Service is experiencing financial losses.
  • This results in an annual shortfall of $6.5 billion, which might have been averted with minimal effort.″ According to O’Rourke, the solution would consist of three steps: For starters, he recommends that the pre-funding obligation be repealed and that the accrued reserves be used to support future pay as you go expenditures.
  • ″Approximately $47 billion has been deposited into that reserve.″ Second, widely accepted accounting standards should be used to determine the liabilities of the postal service.

It’s something that nearly every for-profit organization in this nation does.Third, future retirees of the United States Postal Service should be eligible for Medicare.In fact, military retirees are compelled to participate in this very activity.″ During a press conference in the Oval Office, Trump said, ″The postal service is a joke.″ In his opinion, ″the post office should increase the price of a shipment by nearly four times.″ O’Rourke, on the other hand, claims that Congress, with the support of the president, has manufactured this problem on its own.″It would be irresponsible to allow this to continue,″ he declared.

Also, addressing a $6.5 billion gap with a four-fold increase in parcel post would effectively shut down that particular kind of service.″ They will not be able to make up for it with more expensive stamps.″ James O’Rourke may be reached at [email protected]

USPS has lost $78 billion since 2007 despite receiving billions from taxpayers every year. Democrats still want a bailout.

  • One of the most important findings of a recent government assessment is the severity of the United States Postal Service’s bad financial state.
  • It also reveals that the service need a long-term remedy rather than a bailout, as Democrats have urged in the past.
  • It was discovered in the study, issued Thursday by the United States Government Accountability Office, that the Postal Service’s financial troubles had persisted for a long time before the COVID-19 outbreak, highlighting the need for Congress to intervene and enact significant reforms.
  • The most important piece of information is as follows: Between fiscal years 2007 and 2019, the United States Postal Service had net losses of around $78 billion — while collecting approximately $18 billion each year in tax revenue from American taxpayers.
  • According to the GAO, the agency has been on its ″High Risk″ list since 2009, but its financial sustainability has only deteriorated since then ″as a result of falling mail volume, higher employee compensation and benefit expenditures, and rising unfunded liabilities and debt,″ among other factors.
  • What Members of Congress are Saying Deputy Chairman of the House Oversight Committee Jim Jordan (R-Ohio) said in a statement that the report ″reinforces what many of us have known for a long time: the Postal Service’s business model is failing, and simply throwing more of taxpayers’ hard-earned money at them will not fix their problems.″ The president stated, noting reform measures, that ″if Congress is going to be asked to bail out the Postal Service from yet another economic quagmire, we owe it to the American people to make sure we aren’t just setting them up for yet another bailout the next time there is an issue.″ As Oversight Committee member Fred Keller (R-Pa.) said, ″While Democrats continue to press for a total bailout of the Postal Service through COVID-19-related legislation, the study issued today makes clear that the fundamental flaws inside the Postal Service pre-date this epidemic.″ When the United States Postal Service (USPS) requested a massive $75 billion bailout from taxpayers earlier this year during coronavirus stimulus negotiations, it cited the economic fallout caused by the virus as the reason.
  • Democrats worked hard to include the funds in the CARES Act, but Republicans and President Donald Trump were adamant in their opposition.

In the end, the United States Postal Service received a $10 billion loan.As a result, House Democrats have maintained their call for increased money.″It was technically insolvent to begin with, but the epidemic has radically transformed the climate in which we operate.The reduction in mail traffic has been devastating ″Rep.

Gerry Connolly (D-Va.), who leads the oversight panel that controls the United States Postal Service, agreed.The research suggests that the system be overhauled.A report by the Government Accountability Office (GAO) concluded that ″comprehensive, effective, and successful reform″ cannot occur until there is clarity about what services the United States Postal Service (USPS) should provide, whether the agency should be financially self-sufficient, and what institutional structure would be necessary to support these changes.

  1. The office then submitted three recommendations to the House of Representatives for their consideration: Consider if Congress should reconsider and determine the amount of universal postal service that the United States demands.
  2. (Matter for Consideration 1) Congress should examine evaluating the extent to which the United States Postal Service (USPS) should be financially self-sufficient, as well as what legislative changes would be necessary to enable USPS to achieve this aim.
  3. (Matter for Consideration 2) Congress should give serious consideration to selecting the most appropriate institutional structure for the United States Postal Service (USPS).
  4. In conclusion, the research stated that ″in the absence of legislative action on crucial structural parts of the USPS business model, the United States Postal Service’s mission and financial health are increasingly in jeopardy.″

Can the US Post Office Break Its 13-Year Losing Streak?

  • The government-run United States Postal Service (USPS) commenced operations in 2020 with a shaky track record.
  • Each of the previous 13 years has resulted in a loss of money.
  • Because of increases in postage rates and the growth of its package delivery business, the United States Postal Service earned $514 million more in income in fiscal year 2019 than it did in the previous fiscal year.
  • A net loss of 8.8 billion dollars was recorded by the agency, with 80 percent of that loss related to the continuation of employees’ health-care benefits after retirement.
  • Its ability to become more self-sufficient in relation to the United States government will be vital to its success.
  • Since 2006, when the United States Congress established a legislation forcing the Postal Service to pre-fund the cost of providing retiree health benefits, similar to what many enterprises in the private sector are compelled to do, losses resulting from retirement benefits have happened on an annual basis.
  • As a result of the law, taxpayers in the United States are less likely to be forced to bail out the United States Postal Service for the massive unfunded liabilities that the agency was otherwise on track to accrue.

This is in contrast to the many nearly insolvent pension funds for state and local government employees that continue to op

Leave a Reply

Your email address will not be published.