News & information
NALC President Fredric Rolando’s statement on the May 11 release of the U.S. Postal Service’s financial statement for the second quarter of Fiscal Year 2018, covering the months of January, February and March of 2018:
Today’s USPS quarterly financial report shows the Postal Service’s underlying business strength while also indicating the need to address external matters beyond USPS control.
For the first six months of FY 2018, the Postal Service is close to breaking even – showing a year-to-date operating loss of $302 million. Without the exigent stamp price rollback, the half-year would have an impressive operating profit of about $700 million. These figures, of course, involve only earned revenue; by law, USPS gets no taxpayer money for its operations.
This reflects USPS’ vitality and its importance to the public and our economy – as well as the need to resolve key public policy issues. In April 2016, the price of a stamp was rolled back by two cents, reducing postal revenue by about $2 billion a year. That was the first rollback of stamp prices since 1919 and it makes little financial sense because the Postal Service already has the industrial world’s lowest rates.
Fortunately, the Postal Regulatory Commission is in the midst of a legally mandated review of the postage rate-setting system. At present, USPS is constricted in its ability to adjust rates by no more than the Consumer Price Index, but the CPI is an economy-wide measurement of consumer goods and services that doesn’t fit a transportation and delivery provider. The PRC has the ability to correct this mismatch and relieve the resulting financial pressure.
Meanwhile, Congress should address the pre-funding burden it imposed in 2006, which requires USPS -- alone among all public and private entities -- to prefund future retiree healthcare benefits decades into the future. Without that $1.9 billion cost for the first six months of FY 2018 and the $1 billion cost of the price rollback, USPS would have a net profit of more than $1 billion.
Fixing the external financial burdens posed by the price rollback and pre-funding will allow USPS – which is based in the Constitution and which enjoys broad public and political support – to continue providing Americans and their businesses with the industrial world’s most-affordable delivery network.