When a $5 billion loss is good news
The U.S. Postal Service just lost $5 billion.
And that’s the good news.
A balance sheet that’s awash in red has become the proverbial “new normal” for the post office, but a $5 billion net loss for the 12 months ending Sept. 30 is an improvement over the $15.9 billion loss from fiscal year 2012. Revenue grew slightly, while total mail volume fell by about 1 billion pieces, with first-class mail continuing to slide as people forgo letter-writing and pay their bills online. Shipping and packaging are also showing some growth, which makes the agreement the Postal Service recently inked with Amazon to deliver packages on Sunday in select American cities all the more comprehensible.
Nevertheless, the Postal Service is “in a deep financial hole,” in the words of Joseph Corbett, its chief financial officer. “We can’t continue to remain in this precarious position.”
Aside from changes wrought by technology, the Postal Service is being hobbled by a requirement imposed by Congress in 2006 that it pay $5.5 billion every year into a health care fund for its future retirees. Congress has hardly done the Postal Service any additional favors by swatting away its plea earlier this year that Saturday delivery be discontinued to save money, or by dragging its heels on refunding $11 billion that was overpaid into a pension fund. If the requirement that the Postal Service pre-pay into the retirees’ health fund were eliminated, the Postal Service would have notched a net profit of $600 million in fiscal 2013, Sen. Bernie Sanders, a Vermont independent, told The Washington Post.
Though it may not have the central importance that it did 30, 40 or 50 years ago, since we now live in a world of Skype, email, texting and endless free minutes for long-distance calls, the Postal Service remains too important an institution to be relegated to the scrap heap or handed over to those who would privatize it, where costs would almost certainly increase. It’s time Congress took long-overdue action to help keep the Postal Service alive and prosperous.