2006 Postal Reform Law Continues to Drive Up USPS Net Losses For FY 2012
USPS Needs New Math to Explain November 2011 Net Loss of $1.8 Billion
The US Postal Service filed its second month preliminary financial report of the 2012 fiscal year (unaudited) with the Postal Regulatory Commission (PRC) . USPS reported a net operating loss of $1.267 billion for the month of November 2011. This same period last year saw a $456 million net loss. USPS reported a drop of volume in all classes of mail except shipping which rose 32.0% during the month of November. Most all non-personnel expenses such as Vehicle Maintenance Service, Information Technology, Rural Carrier EMA, supplies and services saw an increase. Read more
Editorial: USPS Financial Crisis, Self Inflicted?
Filed under: APWU, Articles, postal, postal finances, postal news, usps
Can USPS Management Be Trusted to Repair It’s Own Damage?
The article below was written several months ago but it’s still a timely.
There are some very simple factors and a deliberate unspoken agenda that explain everything that is going on with the financial “crisis” and proposed “cures” at the US Postal Service today.
First the United States Postal Service should be understood for what it was intended to be and how exactly it came to be. The Second Continental Congress named Benjamin Franklin as the nation’s first Postmaster General on July 26, 1775.
Our United States Founding Fathers mandated the creation of an Army, Navy and Post Office in Article 1 Section 8 of the U.S. Constitution, which states,
“The Congress shall have Power…To establish Post Offices and Post Roads …To raise and support Armies,…To provide and maintain a Navy…”
But nowhere does the US Constitution require the Army, Navy or Post Office to “make a profit” or even to “break even.” America’s Founding Fathers simply did not include this stipulation when they wrote the actual words they set forth in the US Constitution. Read more
USPS Begins FY 2012 With Net Loss of $139 Million
The US Postal Service filed its first month preliminary financial report of the 2012 fiscal year (unaudited) with the Postal Regulatory Commission (PRC) . USPS reported a net operating loss of $139 million for the month of October 2011. This same period last year saw a $283 million net profit. USPS reported a drop of volume in all classes of mail except shipping which rose 34.6% during the month of October. Most all non-personnel expenses such as Vehicle Maintenance Service, Information Technology, Rural Carrier EMA, supplies and services saw an increase.
USPS Preliminary Financial Information (Unaudited )
USPS Financial History Summary 2007-2011
Below is a summary of USPS’ Financial History from 2007-2011. The summary shows that USPS net financial losses started after the “Postal Accountability and Enhancement Act” (PAEA) was passed into law on December 20, 2006. The PAEA required USPS to pre-fund its Retiree Health Benefit Fund for current and future employees. According to USPS, “ we have incurred expenses for retiree health benefits of $5.5 billion, $1.4 billion, and $5.6 billion in 2010, 2009, and 2008, respectively, for the legally-mandated pre-funding payments to the PSRHBF at each year-end. Without the impact of these charges, the net loss would have been $505 million in 2010 and $1,051 million [billion] in 2009. In 2008 the net income would have been $3,211 million.[billion] ”
USPS Financial History Summary
Prior to 2007 USPS Financial Data show Net Profits from 2004-2006
| 2006 | 2005 | 2004 | |
| Operating Revenue | $72,650 | $69,907 | $68,996 |
| Incomefrom Operations | $969 | $1,626 | $3,145 |
| Net Income | $ 900 | $ 1,445 | $3,065 |
DOJ Advises USPS To Resume FERS Payments Despite Overfunding Of $11.4 Billion
Filed under: postal, postal finances, postal news, usdoj, usps
According to USPS:
In June 2011, both the Postal Service and OPM agreed to seek a resolution surrounding the Postal Service’s’ decision to withhold payments of its FERS contributions by submitting a request for a legal opinion from the Office of Legal Counsel (OLC) at the Department of Justice. Based on advice received from the Office of Legal Counsel at the Department of Justice, in Quarter I, 2012, the Postal Service is expected to resume the regular biweekly payments for its FERS employer’s contributions as well as remit all previously withheld payments, including the $911 million accrued at September 30, 2011.
The Postal Service had overfunded its FERS obligations by $6.9 billion at September 30, 2009, and sought to apply that overfunded balance to amounts currently due for employer contributions. OPM’s latest calculation shows that the surplus has grown to $10.9 billion as of September 30, 2010, the latest actual data available, and it is projected to grow to $11.4 billion by September 30,2011, assuming all employer contributions are made. …however, it is OPM’s position that they are currently restricted by law from authorizing the return of those funds. As a result, various legislative initiatives have been introduced to resolve the matter.
Absent significant changes in the law, it is very likely that the Postal Service will default on the $5.5 billion prefunding payment to the PSRHBF due by November 18, 2011, and on the $5.6 billion prefunding payment due by September 30, 2012. Additionally, even if legislative changes defer or eliminate the $11.1 billion of PSRHBF prefunding payments currently due in 2012, the $15 billion debt ceiling will likely be reached in October 2012 when we are required to make a payment of approximately $1.3 billion to the DOL for workers’ compensation, because the Postal Service is expecting to resume payments to FERS, thereby exhausting the Postal Service’s external funding ability.
NALC statement on USPS financial losses
Filed under: NALC, postal, postal finances, postal news, press releases
Nov. 15, 2011 — For the first time since the recession began in 2007, this year’s Postal Service loss was largely driven by the continued impact of the worst recession in 80 years and the effect of Internet technology—above and beyond the crushing and unique burden of the congressional mandate to pre-fund future retiree health benefits.
This mandate accounted for 100 percent of the losses over the previous four years.
That does not change what has to be done.
Congress must alleviate the pre-funding burden and the Postal Service and its stakeholders must work relentlessly to reinvent the Post Office for the 21st century.
Today we are working with the Postal Service at the bargaining table on doing just that.
source: Latest News | NALC statement on Postal Service losses.
USPS Ends Fiscal Year 2011 with $5.1 Billion Loss
Growth in Shipping Services; Continued Decline in First-Class Mail Volume
WASHINGTON — The U.S. Postal Service ended its 2011 fiscal year (Oct. 1, 2010 – Sept. 30, 2011) with a net loss of $5.1 billion. The year-end loss would have been approximately $10.6 billion had it not been for passage of legislation that postponed a congressionally mandated payment of $5.5 billion to pre-fund retiree health benefits.
Total 2011 mail volume declined by 3 billion pieces, or 1.7 percent, from 2010. The Postal Service’s largest and most profitable product, First-Class Mail, continued its year-over-year decline, from $34.2 billion in 2010 to $32.2 billion in 2011 (5.8 percent), which dwarfed continued growth in its more competitive products, packages and Standard Mail.
USPS Shipping Services revenue, which includes Priority Mail and Express Mail, increased $530 million in 2011 (6.3 percent). The increase in Shipping Services revenue was driven by strong growth in the Parcel Select and Parcel Return Services, due to increased mailings of packages, as customers continued to use the Internet more often to purchase products. Revenue from Standard Mail increased by $495 million (2.9 percent) on a volume increase of 2 billion pieces (2.6 percent).
“The Postal Service can become profitable again if Congress passes comprehensive legislation to provide us with a more flexible business model so we can respond better to a changing marketplace,” said Postmaster General and CEO Patrick Donahoe. “To return to profitability we must reduce our annual costs by $20 billion by the end of 2015. We continue to take aggressive cost-cutting actions in areas under our control and urgently need Congress to do its part to get us the rest of the way there.”
Other 2011 financial results include:
- Operating revenue of $65.7 billion compared to $67.1 billion the year before
- Operating expenses of $70.6 billion compared to $75.4 in 2010
- The retiree health benefit pre-funding payment postponed by Congress and the President is now due by Nov. 18. Unless additional legislation is enacted, the Postal Service will be forced to default on this payment.
The Postal Service continued to increase operating efficiency in 2011, including a reduction in work hours by 34 million despite an increase of 636,500 delivery points. Its productivity gains were the result of effective workforce management, efficient use of materials and transportation, and continued advancements in the use of technology. Since 2001, the Postal Service has reduced work hours by 28 percent, while delivering to almost 14 million additional addresses.
USPS 10k report for Fiscal Year 2011
“The continuing and inevitable electronic migration of First-Class Mail, which provides approximately 49 percent of our revenue, underscores the need to streamline our infrastructure and make changes to our business model,” said Chief Financial Officer Joe Corbett. “Since peaking at 213 billion pieces in 2006, our volume has continued to decline each year.”
USPS Presentation of Finances for FY 2011
Postal Service to Announce FY 2011 Financial Results on Nov. 15
CFO Briefing Follows Board of Governors Open Session Meeting
WASHINGTON — The Postal Service will release its FY 2011 financial results on Nov. 15 during an open session meeting of the Board of Governors. Following the meeting, Chief Financial Officer Joe Corbett will host a telephone/web conference call to discuss the results.
The call with Mr. Corbett will begin at 4 p.m. ET and is open to the news media and all other interested parties.
TO ATTEND WITH AUDIO ONLY:
From a phone, dial: 866 567-8049 (Meeting ID: 7411388)
TO ATTEND THE WEB CONFERENCE AND JOIN WITH AUDIO:
1) Browse to: http://meetingplace3.usps.gov/join.asp?7411388
2) After the MeetingPlace window is open, click the Phone icon (under the Participant List or in the upper right-hand corner).
3) Click Connect Me, validate or update your phone number and click Connect Me again.
4) When the system calls you press 1 to join.
House Committee Releases Very Misleading Video On Who Supports Issa-Ross Postal Reform Bill
Filed under: politics, postal, postal finances, postal news, postal reform, press releases, scams, usps, videos
This news release and video suggests that the entire House Committee On Oversight and Government Reform and all Senators support the Issa-Ross-McCain Postal Reform Bill as well as the views on the USPS overpayment. However, only one member of the Committee has signed on as a co-sponsor for HR 2309. Very misleading on all fronts. Read more
Congressman Amash Issues Statement on Postal Service Default
Filed under: politics, postal, postal finances, postal news, press releases, usps
USPS Fails to Make $5.5 Billion Payment
Washington, D.C. – (September 30, 2011) Rep. Justin Amash (R-MI), Vice Chairman of the Subcommittee on the Federal Workforce, U.S. Postal Service, and Labor Policy, issued the following statement on the U.S. Postal Service’s default:
“Later today, the Postal Service will default on a $5.5 billion payment owed to the federal government. This payment, required by law, would reduce the Postal Service’s massive unfunded liability for retiree health care benefits. Read more