News & information
NALC President Fredric V. Rolando’s statement on the U.S. Postal Service’s financial report for the second quarter of Fiscal Year 2016, covering January, February and March. (Click here to jump below to a summary of press coverage.)
The $576 million quarterly operating profit announced today by the Postal Service is positive news for an agency that enjoys widespread public support. The continuing financial upswing shows the importance of maintaining and strengthening the unparalleled—and profitable—postal network.
This impressive performance in the second quarter of Fiscal Year 2016 brings the operating profit for the year’s first half to $1.833 billion, without a dime of taxpayer money. The Postal Service is now into its fourth straight year of operating in the black—with $4.4 billion in operating profits just since the start of FY2014.
These results show the vitality—and business viability—of the Postal Service in today’s economy. That’s all the more so because they are not a fluke but rather stem from structural factors: An improving economy has helped stabilize letter revenue (Q2 volume up 0.7 percent from second quarter of 2015 and revenue up 1.6 percent), and internet-driven online shopping has sent package volume sharply upward (volume up 11.4 percent and revenue up 16.2 percent over last year’s Q2.) As a result, overall revenue is up by 4.7 percent.
Today’s positive news also validates the emerging consensus among key lawmakers, the Postal Service, postal unions, businesses, mailers and industry groups to move forward with practical reform that all stakeholders can buy into.
Two matters are worth noting in this regard. One is the two-cent decrease in stamp prices that went into effect last month, the first price rollback since 1919. The USPS projects this will cost it about $2 billion annually. This makes no financial sense, particularly when USPS already has the lowest rates in the industrialized world and other nations' postage rates are rising. Nevertheless, the adverse effect on postal revenues should be short-term in nature since the Postal Regulatory Commission’s scheduled review of the postage rate-setting system begins in less than seven months. We are confident that the PRC will restore rates to sensible levels before implementing a new system.
And the 2006 congressional mandate that USPS pre-fund future retiree health benefits—something no other public or private entity has to do—costs $5.6 billion a year and has accounted for all of the “red ink” you hear about.
If lawmakers adopt a smart, targeted reform package that includes addressing pre-funding, allowing USPS the flexibility 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, USPS can continue to provide Americans and their businesses with the world's most affordable delivery services.
Press coverage
Press coverage of the USPS quarterly report has been fair, comprehensive and nuanced. NALC is, besides USPS, quoted most often.
Postal revenues rise 4.7 percent but agency faces challenges (The Hill)
President Rolando was quoted in The Hill's story more than anyone; others cited were Postmaster General Megan Brennan, Sen. Tom Carper (D-DE) and USPS Chief Financial Officer Joseph Corbett.
National Association of Letter Carriers President Fredric Rolando called the $576 million quarterly operating profit "positive news for an agency that enjoys widespread public support."
"The continuing financial upswing shows the importance of maintaining and strengthening the unparalleled — and profitable — postal network," Rolando said.
The letter carriers group said that operating profit for first half of the fiscal year totaled $1.8 billion and said the USPS has posted $4.4 billion in profits since the start of fiscal 2014.
...
The main reason for the agency's red ink is a 2006 congressional mandate that USPS prefund future retiree health benefits, costing $5.6 billion a year.
"If lawmakers adopt a smart, targeted reform package that includes addressing prefunding, allowing USPS the flexibility 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, USPS can continue to provide Americans and their businesses with the world's most affordable delivery services," Rolando said.
U.S. Postal Service Revenue Grows on Shipping Volume, Pricing (The Wall Street Journal)
The Wall Street Journal's story and headline focus mostly on rising revenue, and includes a great photo of a busy letter carrier unloading her truck.
U.S. Postal Service reports second quarter ‘controllable’ income of $576 million (Linn's Stamp News)
The Linn's Stamp News story by Bill McAllister paraphrased the NALC, the only source cited besides Brennan.
USPS expects $1B loss in 2016 without surcharge (Federal Times)
Federal Times' story quoted Rolando, Brennan and Corbett.
National Association of Letter Carriers president Fredric Rolando touted the controllable income results, in a statement, and reiterated that postal reform would help move the USPS (toward) profitability.
“If lawmakers adopt a smart, targeted reform package that includes addressing pre-funding, allowing USPS the flexibility 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, USPS can continue to provide Americans and their businesses with the world's most affordable delivery services,” he said.
There also were stories by some smaller outlets, some of which are conservative or business-oriented.
Postal Service Reports $2 Billion Net Loss for Second Quarter (FedSmith)
FedSmith's story blamed USPS' red ink largely on workers' comp interest rate adjustments.
Postal Service runs big loss, but mail volume is up (The Business Journals)
The Business Journals' story, by the Washington bureau chief, included this sentence:
As usual, costs that are outside the Postal Service’s control — a mandate to prefund retiree health benefits and an increase in workers’ compensation liability due to interest rates — were the main culprits in the big loss.
USPS calls on Congress to fix its ‘fundamental financial challenges’ (Federal News Radio)
Federal News Radio’s report focused on USPS' solid performance but also on the need for Congress to address the challenges it helped create. The story quoted Rolando and Brennan at length, and also quoted Sen. Carper.
Fredric Rolando, president of the National Association of Letter Carriers, voiced his support for reversing the PRC’s reduction of postal rates.
“This makes no financial sense, particularly when USPS already has the lowest rates in the industrialized world and other nations’ postage rates are rising,” Rolando said in a statement. “Nevertheless, the adverse effect on postal revenues should be short-term in nature since the Postal Regulatory Commission’s scheduled review of the postage rate-setting system begins in less than seven months. We are confident that the PRC will restore rates to sensible levels before implementing a new system.”
…
Rolando said the time for Congress to act on postal reform is long overdue.
“If lawmakers adopt a smart, targeted reform package that includes addressing pre-funding, allowing USPS the flexibility 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, USPS can continue to provide Americans and their businesses with the world’s most affordable delivery services,” Rolando said.
USPS Back in the Red Despite Boosting ‘Controllable’ Profit 84 Percent (Government Executive)
Government Executive’s report had lots of numbers about red ink, headwinds and positive developments, along with need for congressional action. It quoted Rolando, Brennan, Carper and Corbett.
Fredric Rolando, president of the National Association of Letter Carriers, said the second quarter report demonstrated an “impressive performance” showing a “continuing financial upswing.”