A financial analysis of the U.S. Postal Service by the Postal Regulatory Commission revealed a net loss of $5.5 billion for the agency in 2014, bringing its total net deficit since the passage of the Postal Accountability and Enhancement Act to $51.7 billion. That 2006 legislation required USPS to pre-fund its retirees’ health care benefits with an annual payment nearly equal to that of the loss it posted in the last fiscal year, which ended on September 30.
Were it exempted from pre-funding, the Postal Service operations would have come up looking financially sound—with help, of course, from the 4.3% exigent price increase it was awarded in December 2013. It recorded $1.4 billion in net operating income, its first non-loss in that column since 2008. First Class Mail revenue rose half a percentage point to $29.6 billion, and Standard Mail increased by 3% to $17.5 billion.
First Class volume plummeted 8.4% to just under 4 billion pieces, but Standard Mail volume rose by 1% despite the higher costs presented to big mailers by exigency. Total Standard Mail letters rose by 539 million to 54 billion, contributing $10.8 billion in revenue to USPS’s balance sheet, a 5.4% increase.
Standard Flats volume declined 4% to 26.3 billion pieces while producing revenue of around $6.6 billion, virtually the same as the segment did in fiscal 2013.
Senator Tom Carper (D-DE), who last year co-authored a postal reform bill, issued a statement saying the PRC’s report underscores USPS’s need for legislative assistance.
“Despite modest gains in net operating income, volume, and revenue, the Postal Service does not have enough assets or liquidity to counter the ongoing decline of First Class Mail or make investments to help keep it competitive in the future,” Carper said. “For an institution that operates at the center of a $1 trillion industry and employs over 7 million people, a financial outlook this bleak is alarming—and shouldn’t be ignored. The only way to alleviate the Postal Service’s financial challenges and put it back on a path to solvency is for Congress to pass comprehensive postal reform legislation. “