Unions say financials show USPS is viable

While the U.S. Postal Service has blamed some of its red ink on the proliferation of the Internet, one union leader this week called the Internet "a net positive for USPS."

Commenting on the Postal Service's fiscal third-quarter financials, which were released Aug. 11, National Association of Letter Carriers President Fredric Rolando highlighted the upside of the earnings report.

"The figures released today by the Postal Service show an operating profit of slightly more than $1 billion for the first three quarters of fiscal year 2014, continuing the operating profitability that began in October 2012," Rolando said in a statement.

"This performance is driven by two underlying trends," Rolando said. "As the economy improves, letter mail revenue is growing. And as more people shop online, package revenue is skyrocketing. The Internet is now a net positive for USPS, auguring well for the future as e-commerce grows. In the third quarter, which the Postal Service’s CFO called 'a very good quarter in a lot of ways,' package revenue rose 6.6 percent, standard mail revenue rose 5.1 percent and first-class mail revenue was up 3.2 percent."

NALC, like other postal unions, blames the bulk of USPS losses on the 2006 congressional mandate that requires USPS to spend billions each year to prefund its future retiree health benefits. USPS itself has called on Congress to act on the issue.

"That annual $5.6 billion annual charge accounts for most of the 'losses,'" Rolando said.

Rolando urged Congress to recognize the improvements and take action to halt looming service standard reductions and processing facility closures that are part of USPS's plan to "right-size" the organization.

"Given the positive mail trends, it would be irresponsible to degrade services to Americans and their businesses, which would drive away mail—and revenue—and stop the postal turnaround in its tracks," Rolando said. "Lawmakers need to preserve and strengthen the profitable postal networks—which are the future of the USPS as it increasingly delivers not just six but seven days a week—while fixing the prefunding fiasco."

American Postal Workers Union President Mark Dimondstein also highlighted the positive results.

“Despite the good news, Postmaster General [Patrick] Donahoe continues to paint a desperate picture of postal finances to justify his push to privatize the U.S. Postal Service,” Dimondstein said on the union's website. “But USPS financial reports show the Postal Service is rebounding from the economic collapse of 2008 and can thrive as a public institution—if it is allowed to do so.”

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Edward A. Zurndorfer Certified Financial Planner
Mike Causey Columnist
Tom Fox VP for Leadership and Innovation, Partnership for Public Service
Mathew B. Tully Legal Analyst

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