NALC President Fredric Rolando’s statement on the Feb. 9 release of the U.S. Postal Service’s financial statement for the first quarter of Fiscal Year 2017, covering the months of October, November and December of 2016:
Today’s Postal Service financial report shows a $522 million operating profit for the first quarter of Fiscal Year 2017, demonstrating the strength of the postal turnaround. USPS now has a total operating profit of $3.7 billion since the start of FY 2014.
That’s impressive for a government entity that gets no taxpayer money—earning its revenue instead by selling stamps—while enjoying strong public support and providing Americans and their businesses with the industrial world’s most-affordable delivery network. The continuing financial upswing shows the importance of maintaining and strengthening the unparalleled—and profitable—postal network.
These results reflect ongoing trends: stabilizing letter revenue as the economy gradually improves from the worst recession in 80 years and rising package revenue driven by online shopping.
The red ink you hear about has nothing to do with the mail but rather with congressional politics—the 2006 decision by a lame-duck Congress to compel the Postal Service to pre-fund future retiree health benefits. No other public agency or private company has to do this even one year in advance; USPS must pre-fund these benefits decades into the future. That multi-billion annual charge is not only the “red ink,” it actually disguises the operating profits USPS is earning.
The pre-funding issue can be readily addressed if Congress acts on practical, targeted postal reform. There is a strong consensus within a coalition consisting of the Postal Service, postal unions, business groups and key legislators for a reform package that all stakeholders can buy into.
It’s worth noting that the quarter’s operating profit would have been $1.1 billion had it not been for the first annual stamp price rollback since 1919. That rollback, which took place in April 2016, makes little financial sense, because USPS already has the industrial world’s lowest rates. The Postal Regulatory Commission is now engaged in a review of the postage rate-setting system.
USPS reported a $522 million operating profit for the first quarter of Fiscal Year 2017. This profit reflects the growth of the Postal Service into the No. 1 e-commerce delivery provider. The agency provides more last-mile deliveries than any private carrier. The financial results also have been supported by growth in marketing letter mail and by a slowing rate of decline in First-Class letter mail. During the first quarter, USPS benefited from an influx of election-related mail, and a large volume of packages and other holiday mail (cards, catalogs, etc). It continued its operating profitability despite the loss of revenue from a 2016 stamp price cut, which reduced quarterly revenue and operating profit by $570 million.SOURCE: Actual results from USPS 10-Q reports for 1Q 2012-1Q 2017