USPS revenue up but losses linger as overhaul bill appears to stall

The Washington Post

The U.S. Postal Service recorded its first revenue increase in five years, but the agency still lost $5 billion in fiscal 2013, making it the seventh consecutive year of red ink, according to figures released Friday.

The continued losses dampened the good news about increases and was compounded by the possibility that Congress will not pass legislation this year to help stanch the bleeding — which would make it the third straight year lawmakers failed to agree on a way forward to aid the struggling mail service.

“We’re in a deep financial hole,” USPS Chief Financial Officer Joseph Corbett said during a media briefing last week. “With one year of nearly breaking even (on operating revenue), we’re not ready to declare victory. We can’t continue to remain in this precarious position.”

A leading bipartisan Senate bill has hit a snag in the Homeland Security and Governmental Affairs Committee, which pushed back a vote set for this month amid concerns from Democrats about the service cuts and rate increases the legislation allows.

Net losses for the agency since 2011 are $26 billion.

The net loss for 2013 is largely the result of a requirement by Congress that the Postal Service prefund retiree benefits, critics of the mandate say. The agency defaulted on its $5.6 billion prepayment last month.

Sen. Bernard Sanders, who has proposed legislation to end the obligation, said the Postal Service would have recorded a net profit of $600 million without the annual payment.

The Postal Service has pressed Congress to end the payment mandate, but USPS officials said Friday that such a move would not end the agency’s monetary woes, noting that the organization is still $40 billion in debt despite its improving finances.

The $5 billion loss this year represents a significant improvement over 2012, when the agency lost about $16 billion. An 8 percent increase in revenue from package deliveries helped improve the numbers, and the USPS is poised to make additional progress through new agreements with online retailers such as Amazon.

But the gains this year were partially offset by a revenue drop of 0.05 percent in first-class mail delivery, which remains the Postal Service’s most profitable product. The agency experienced declines in that category of about 6 percent in 2011 and 4 percent in 2012.

The National Association of Letter Carriers cited this year’s modest drop as proof that mail delivery has stabilized.

“We hope Congress is paying attention to the postal turnaround,” said NALC President Fredric Rolando. “Lawmakers should reject bills that focus on slashing service and attacking postal employees, and instead focus on fixing the prefunding fiasco.”