The U.S. Postal Service continued its long string of losses in the second quarter though operating expenses, excluding costs “outside of management’s control,” were basically flat.

USPS has been losing money for 12 straight years as electronic mail alternatives continues to eat into its revenue and efforts to remedy its financial problems continue to stall in Congress.

For the second quarter, the service on Friday reported a a net loss of nearly $2.1 billion, an increase of $747 million over the year-ago period. Overall revenue fell $8 million to $17.5 billion, with first-class mail revenue down 3.3% to $217 million on a volume decline of 3.9%.

What USPS calls its “controllable” loss for the quarter was $806 million, compared with $656 million a year ago. Overall expenses rose 4.0% to $19.6 billion, but excluding costs outside management’s control, such as amortization of unfunded pension liabilities, expenses increased by only $154 million, or 0.8%.

“We continue to face challenges from the ongoing migration of mail to electronic alternatives, and we are legally limited under current law in how we can price our products and streamline our legacy costs,” CFO Joseph Corbett said in a news release. “Within the framework of our current business model, we are executing to grow revenue and reduce operating expenses.”

Postmaster General and CEO Megan J. Brennan said USPS is continuing “to pursue aggressive management actions and to seek legislative and regulatory reforms to address our overall cost structure and enhance revenue-generating opportunities.”

She has previously blamed USPS’ financial problems on “a flawed business model that is imposed by law.”

USPS is required, among other things, to pre-fund the future health benefits of its retirees. Rep. Peter DeFazio, Oregon Democrat, has introduced the so-called USPS Fairness Act to eliminate the pre-funding requirement, saying the “unfair” mandate is “responsible for more than 90 percent of USPS’s financial losses and 100 percent of losses over the past six years.”

But a task force formed by President Donald Trump to address USPS’ finances recommended only that the pre-funding obligation be “restructured.”

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5 responses to “Postal Service Loses $2.1B on Flat Revenue”

  1. Why is it that this supposedly independent entity cannot run on its own money and not the taxpayers who have been making enormous additional contributions to this group via Congress for close to the last decade? Here we are talking about a few billion dollars in Federal Gifting to the USPO each year. Once both sides are forced to work out a compromise, without relying for a penny more than what they charge their customers, then an agreement will be made to include major changes related to employment and sites. Employment can be reduced substantially if most local Post Offices are closed, as we may need one every 30 miles in populated areas, and deliveries are changed to once a week for all residences and twice weekly for businesses. Yes, they are competitors for FedEx and UPS and soon to be Amazon but if they cannot make a profit of even a penny a year, and that would include covering their retirement programs, then we need to let them go. Those 3 competitors could easily take over their services.

  2. USPS doesn’t receive any taxpayer funding and hasn’t for decades. And, as pointed out in the article — which, apparently, you didn’t bother to read — the Congressional mandate requiring the Postal Service to prefund 75 years’ of future retiree health benefits within 10 years is responsible for 90+% of USPS’s losses and 100% of its debt. The $40+ billion that the Postal Service had to deposit was spent on non-Postal programs, “bailing out” the taxpayers.

  3. The David Gage statement that ”a few billion dollars in Federal Gifting to the USPO each year by Congress” is totally false and blatantly misleading to say the least. The Post Office is NOT FUNDED BY TAX DOLLARS. It is funded by the sale of stamps and metered postage only. I do not know where you came up with this other garbage. Ask Gm, Ford or any business how they would like mail deliveries only 3 days a week and you will get an earful. Your comments Mr. Gage and opinions are NOT TRUE

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