The Sad Little Bright Spot in the United States Postal Service’s $5 Billion Loss

Deep in the red, the mail service is going rogue.

U.S. Postal Service employee Arturo Lugo delivers an Express Mail package during his morning route on February 6, 2013 in Los Angeles, California.
National Journal
Matt Berman
Add to Briefcase
Matt Berman
Nov. 15, 2013, 5:52 a.m.

The rev­en­ue num­bers are in for the United States Postal Ser­vice, and they are quite bleak. Over the past 12 months, the USPS has lost $5 bil­lion. Amaz­ingly, though, that num­ber is far bet­ter than last year.

The USPS lost $15.9 bil­lion in fisc­al 2012, chiefly due to $11.1 bil­lion in pay­ments for re­tir­ee health be­ne­fits. Be­cause of those pay­ments though, that year was something of an out­lier, with $5.1 bil­lion in losses in 2011 and $8.5 bil­lion in 2010.

If this wasn’t already in­cred­ibly ob­vi­ous, the way mail gets de­livered in the United States is in need of a ser­i­ous shake-up. For years, as NJ‘s Mar­ina Koren wrote earli­er this week, the USPS has pleaded with Con­gress to act to help its budget by end­ing Sat­urday de­liv­ery, de­creas­ing re­tir­ee be­ne­fits, rais­ing the price of post­age, or tak­ing some oth­er ac­tions.

There isn’t much sign of that hap­pen­ing though, on ac­count of this Con­gress still be­ing this Con­gress — al­though today’s loss num­bers could help. In the mean­time, the USPS is go­ing rogue. Earli­er this week, it an­nounced it had turned to Amazon for a deal to ex­pand the com­pany’s Sunday pack­age de­liv­ery.

The terms of that deal haven’t been dis­closed. But there is a bright spot for the USPS in Fri­day’s re­port that shows why the deal could work. While mail volume has been de­clin­ing for years, rev­en­ue from pack­age de­liv­ery has been on the rise. In the past year, rev­en­ue rose 8 per­cent. Com­pare that with what’s happened to the USPS’ pre­vi­ous money-maker, first-class mail de­liv­ery. In 2007, that ser­vice ad­ded up to 92 bil­lion pieces. In 2012, it was 69 bil­lion. Dur­ing that same peri­od, pack­age volume in­creased from 3.3 bil­lion to 3.5 bil­lion.

Things are pretty dire for the USPS right now, but mov­ing to a more pack­age-cent­ric sys­tem, with help from private com­pan­ies, could be a way for­ward.

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