The ongoing financial losses at the Postal Service showed no signs of abating as the agency reported a net loss of nearly $2.3 billion on revenue of $17.1 billion for the third quarter of fiscal year 2019. That is roughly 34% higher than last year’s losses in which the Postal Service only lost nearly $1.5 billion.
The bad news was broken to the public on Friday as the Postal Service announced its quarterly financial results.
In addition to the multi-billion dollar losses in the last 3 months, the Postal Service announced declines in its mail and package services as well.
- First-Class Mail revenue declined by $98 million, or 1.6 percent, on a volume decline of 361 million pieces, or 2.7 percent, compared to the same quarter last year.
- Marketing Mail revenue declined by $121 million, or 3.0 percent, on a volume decline of 878 million pieces, or 4.7 percent, compared to the same quarter last year.
- Periodicals revenue declined by $38 million, or 11.2 percent, on a volume decline of 173 million pieces, compared to the same quarter last year.
The one somewhat bright spot mentioned was in Shipping and Packages revenue. It increased by $250 million, or 4.8 percent, however, it too saw a volume decline of 47 million pieces, or 3.2 percent, compared to the same quarter last year.
The Postal Service spun the news as best it could, repeating its hackneyed line about how it continues to try to stem the bleeding through a series of “aggressive management actions” and blaming Congress for a lack of legislative action to save the day.
“We continue to face imbalances in our business model that must be fixed through legislative and regulatory change. As we work to effectuate that change, we continue our ongoing aggressive management actions, and remain focused on delivering for the American public, and meeting their evolving business and residential needs,” said Postmaster General and Chief Executive Officer Megan J. Brennan.
She added, “We are actively adapting to changes throughout the mailing and shipping landscape, providing customers with new solutions that add value for their investment, improve the service we provide, and drive internal efficiencies.”
She also said that the Postal Service’s largely fixed and mandated costs continue to rise at a faster rate than the revenues that can be generated, resulting in an “ill-suited” and “constrained business model.”
Past Attempts to Provide a Solution
Recent legislative attempts have been floated in Congress to try to turn the situation around, but so far none have advanced very far, much less been signed into law.
Proposals range from letting the Postal Service ship alcoholic beverages to making major changes to the benefits of Postal retirees, such as mandatory Medicare for those who are eligible in an effort to control costs.
The famed “pre-funding mandate” for retiree health care costs is often blamed for the situation of the Postal Service, and a bill has even been introduced to eliminate that. It too, has not advanced as of the time of this writing, however, GovTrack shows a 59% chance of it passing which is much higher than what is often seen for most bills. What that number is based on though is unclear.
The Trump administration formed a task force to examine possible solutions for the Postal Service, saying reforms were necessary to avoid a “taxpayer funded bailout.” Among the recommendations that came out of that effort were better aligning Postal Employees’ salaries to the private sector and removing employee compensation from collective bargaining.
Most everyone among the interested parties seems to agree that something must change at the Postal Service, but until agreement is reached on what that might be it seems the same results can be expected.