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Statement from Fredric Rolando, president of the National Association of Letter Carriers, on USPS’ annual financial report:
Today’s Postal Service financial report shows a $610 million operating profit for Fiscal Year 2016, demonstrating the strength of the postal turnaround. USPS now has three straight years of operating in the black, with a total operating profit of $3.2 billion since 2013.
That’s impressive for a government entity that gets no taxpayer money—earning its revenue instead by selling stamps—while enjoying strong public support and providing Americans and their businesses with the industrial world’s most affordable delivery network.
The Postal Service’s operating profits have been driven by improved letter/package revenue. Source/detailsImportantly, these operating profits stem from two ongoing structural factors: As the economy gradually improves from the worst recession in 80 years, letter revenue is largely stabilizing. And as the internet drives online shopping, package revenue is rising sharply (up 16 percent this year), auguring well for the future. Record worker productivity also contributes.
The red ink you hear about has nothing to do with the mail but rather with congressional politics—the 2006 decision by a lame-duck Congress to compel the Postal Service to pre-fund future retiree health benefits. No other public agency or private company has to do this even one year in advance; USPS must pre-fund these benefits decades into the future. That $5.8 billion annual charge is the “red ink.”
The pre-funding issue can be readily addressed if Congress acts on practical, targeted postal reform. There is a strong consensus within a coalition consisting of the Postal Service, postal unions, businesses, mailers and industry groups, as well as key legislators, for a reform package that all stakeholders can buy into, including addressing pre-funding, allowing USPS to use its invaluable networks for some new products and services, and adopting best private-sector practices in investing the USPS retiree health benefits fund. Our coalition will work with Congress to overcome the short-term impact of the rate roll-back and move legislation.
It’s worth noting that the year’s operating profit would have been $1.6 billion had it not been for the first annual stamp price rollback since 1919. That rollback, which took place halfway through the fiscal year (in April), makes little financial sense, because USPS already has the industrial world’s lowest rates. Nonetheless, the adverse effect on postal revenues should be short term, with the Postal Regulatory Commission’s legally mandated review of the postage rate-setting system starting early next year. We are confident that the PRC will restore rates to sensible levels before implementing a new system.
The report’s release—which took place one week after Election Day—received modest press coverage.
Postal Service reports $5.6 billion loss for fiscal 2016 (Federal News Radio)
NALC President Fredric Rolando was among those quoted in Federal News Radio’s Nov. 16 story about the U.S. Postal Service’s release of its Fiscal Year 2016 financial report:
The National Association of Letter Carriers, one of the largest postal workers unions, reiterated its support for postal reform legislation.
“The pre-funding issue can be readily addressed if Congress acts on practical, targeted postal reform. There is a strong consensus within a coalition consisting of the Postal Service, postal unions, businesses, mailers and industry groups, as well as key legislators, for a reform package that all stakeholders can buy into, including addressing pre-funding, allowing USPS to use its invaluable networks for some new products and services, and adopting best private-sector practices in investing the USPS retiree health benefits fund,” NALC President Fredric Rolando said in a statement.
Despite $5.6B Loss in 2016, Postal Service Financial Outlook Improves (Government Executive)
President Rolando was the only person quoted in Government Executive’s Nov. 15 story. The president ends the balanced story with two positive paragraphs:
Fredric Rolando, president of the National Association of Letter Carriers, said USPS is on strong footing, arguing it has posted an “operational profit” for three straight years and its losses are attributable only to congressional gridlock.
“That's impressive for a government entity that gets no taxpayer money—earning its revenue instead by selling stamps—while enjoying strong public support and providing Americans and their businesses with the industrial world's most-affordable delivery network,” Rolando said.
U.S. Postal Service reports $610 million operating profit for 2016 (Linn’s Stamp News)
Rolando also was the only person quoted in the Nov. 15 story in Linn’s Stamp News, and he also ended this story on a positive note.
“USPS now has three straight years of operating in the black, with a total operating profit of $3.2 billion since 2013,” said Fredric Rolando, president of the National Association of Letter Carriers.
“That’s impressive for a government entity that gets no taxpayer money—earning its revenue instead by selling stamps—while enjoying strong public support and providing Americans and their businesses with the industrial world’s most-affordable delivery network,” he said.
For 3rd year, USPS posts an operating profit (The Stand)
A Nov. 16 story about the report by The Stand, a news service run by the Washington State Labor Council, included Rolando’s complete statement about it, as well as his photo.
Other news outlets that covered the story:
- U.S. Postal Service Loss Widens as Higher Costs Offset Revenue Growth (The Wall Street Journal)
- U.S. Postal Service posts $5.6B loss for 2016 (The Hill)
- Letter Carriers’ Rolando hails USPS operating profit as agency looks forward to busy season (Press Associates, Inc.)