When was the last time you heard something positive about the financial situation of the United States Postal Service (USPS)? The USPS 2013 Annual Report shows a loss of $5 billion for the 2013 fiscal year.
It was the seventh straight negative year for the USPS, which has endured massive cuts and downsizing. But before anyone starts digging a grave, put down the shovel and take a closer look at the USPS, one of the few national institutions ordained by the original draft of the U.S. Constitution, and the challenging situation it has been placed in by recent policies at the federal level.
As we look at the USPS’s current state, we need to keep the following facts in mind:
The 2013 fiscal loss was an improvement
Obviously, a loss is a loss. However, when you look at 2012’s $15.9 billion loss, the $5 billion sounds pretty good. In fact, it sounds downright positive in comparison. The USPS is clearly doing something right and appears to be moving in the right direction, a fact that more people need to realize.
The majority of the loss is due to a specific government mandate
In 2006, lawmakers in Congress instilled a mandate for the USPS that declared it must prefund all future retirees’ health benefits. The cost of that mandate is about $5.5 billion annually. In other words, this mandate almost entirely accounts for the total of the loss seen in 2013.
It is also worth noting that this regulation on the USPS is a financial burden no other organization, whether it’s a government agency or a privately owned corporation, has had to endure. In addition to this burden, the agency has also suffered due to multiple government policies that have dramatically downscaled its reach, with cuts across the board. The USPS is doing some innovative things to stay competitive, but it has been placed at a serious disadvantage.
Shipping and package delivery has seen an 8 percent gain
The USPS’ recent growth can be attributed in large part to the rise of online sales and the further globalization of the world’s economy, which have fueled increased demand for parcel shipping. It’s also predicted to increase well into 2014, which is another good sign for the USPS as it competes directly in this area with FedEx, UPS and other private companies.
Although it faces some major obstacles, the USPS is still holding on with a tight grip and a business savvy that seems likely to get results. While there may be further cuts on delivery days and times, the agency has partnered with Amazon, for which it will begin doing limited Sunday deliveries during the holiday season. In another noteworthy move, the USPS is teaming up with large-scale retailers like Staples to bring postal counters — and all of the postal services they bring — to retail locations.
So don’t count the USPS out just yet. Even with some fundamental issues hampering its success, the agency continues to fight for survival. And it just might win in the end.