The Postal Service has reported a net loss of approximately $5.6 billion for fiscal 2016 (Oct. 1, 2015-Sept. 30, 2016), compared to a $5.1 billion loss for the previous fiscal year.
The fiscal 2016 loss was driven by mandated retiree health benefits expenses. If this prefunding obligation was excluded, USPS would have recorded net income of approximately $200 million.
“To drive growth in revenue and better serve our customers, we continue to invest in the future of the Postal Service by leveraging technology, improving processes and adjusting our network,” said PMG Megan J. Brennan.
In 2016, USPS invested $1.4 billion, an increase of $206 million over 2015, to fund much-needed building improvements, vehicles, equipment and other capital projects, the PMG noted.
The Postal Service’s shipping revenue grew $2.4 billion, or 15.8 percent. This was offset by a decline in First-Class Mail revenue of $925 million, or 3.3 percent, due primarily to the expiration of the exigent surcharge and ongoing growth in electronic communications.
Overall, USPS reported operating revenue of $70.4 billion for 2016, excluding a $1.1 billion change-in-accounting estimate recorded during the year. This equates to an increase of $1.6 billion, or 2.3 percent, over the previous year.
The Postal Service’s Nov. 15 news release has more information.
Union and NAME of Local/Branch
Atlanta Metro Area Local 32
Office held, if any
Workroom Floor Steward
The some $5 billion dollar retiree healthcare prefunding mandate continues to plague the USPS finances.
But in years past, fuel costs were an underreported factor in USPS losses as well. FedEx and UPS dealt with the rising fuel costs to their operations by adding a fuel surcharge. If the USPS is to ever be successful operating as a business, it too must enact similar surcharges when uncontrollable expenses arise.
Which is of course one reasonable answer to the retiree healthcare prefunding mandate problem. Rather than force the USPS to absorb the exorbitant costs of prefunding retiree healthcare into its operating budget, Congress could and should simply change the way the USPS finances the retiree healthcare prefunding mandate to a surcharge system to divorce this burden from operating costs.