USPS $15.9 Billion Loss Highlights Need for Reform
The U.S. Postal Service ended the 2012 fiscal year (Oct. 1, 2011 – Sept. 30, 2012) with a record net loss of $15.9 billion, compared to a net loss of $5.1 billion for the same period last year. The loss included expenses of $11.1 billion related to two payments to prefund retiree health benefits. The Postal Service, which is uniquely required by law to prefund these obligations, was forced to default on these payments.
Resolving the prefunding requirement, which made up 70 percent of the net loss, and providing more commercial flexibility to allow the Postal Service to manage its business, are among legislative changes needed for USPS to fully implement its business plan to return to financial stability.
“It’s critical that Congress do its part and pass comprehensive legislation before they adjourn this year to move the Postal Service further down the path toward financial health,” said Postmaster General and CEO Patrick Donahoe. “We continue to do our part to grow revenue and reduce expenses by making our operations more efficient and by providing our customers with new and expanded services to meet their mailing and shipping needs. Additionally, through the expanded use of technology, including better use of digital tools and mobile technology, we are providing business mailers with new opportunities to connect with customers in a more individualized way.”
Besides resolving the accelerated schedule to prefund retiree health benefits and allowing the Postal Service the flexibility to sponsor its own healthcare program for employees and retirees, the Postal Service Business Plan includes these other actions that require legislative action:
• Allowing the Postal Service to determine delivery frequency
• Allowing the Postal Service to offer non-postal products and services
• Developing a more streamlined governance model for the Postal Service that would allow for quicker pricing and product decisions