The United States Postal Service has charted another net loss — $5.1 billion for 2015 — while its revenue rose by $1 billion to $68.9 billion..
"We achieved controllable income in excess of $1 billion for the second consecutive fiscal year giving us some limited flexibility to make critical investments in the future of the organization," said Postmaster General and CEO Megan Brennan, in a statement.
Congress requires the USPS to prepay its retiree health benefits for 75 years, which results in massive red ink in its financial reports.
The USPS had $1.2 billion in controllable income for 2015, a figure that excludes future retiree health benefits, interest expense and other non-cash compensation expenses.
"To maintain this success we will need to continue our efforts to grow the business and drive operational efficiencies," Brennan said. "However, we will also need the enactment of legislation that makes our retiree health benefit system affordable and that provides increased pricing and product flexibility."
This year marked the second that the USPS totaled more than $1 billion in controllable income, following 2014's $1.4 billion mark.
But the postal service still saw escalating costs, including a $1.3 billion increase in controllable expenses, resulting from what postal officials said was a combination of "higher compensation costs attributable to increased benefits expenses and additional work hours partly associated with growth in the more labor-intensive shipping and package business."
Postal officials also said mail volume fell by 1.3 billion pieces from 2014's mark of 155.5 billion pieces mailed, but package shipping volume jumped 14.1 percent, reflecting the continued growth of e-commerce.
But USPS CFO Joseph Corbett warned the agency will take another hit financially next year with the end of a revenue-producing "exigent surcharge," which has provided an additional estimated $3.5 billion in revenue since its inception, and will provide a total of $4.6 billion in additional revenue by the time it is eliminated in April. The Postal Regulatory Commission approved the surcharge and is also requiring its end.
Postal reform has been a hot topic on Capitol Hill this fall, with the October introduction of Sen. Tom Carper's, D.-Del., iPost bill, which would end the USPS's statutory payments, among other reforms.
National Association of Letter Carriers president Fredric Rolando lauded the results, saying in a statement that they prove the postal service is providing fiscal success, despite the statutory payment requirements.
"The USPS' continuing financial upswing shows that dismantling services to the public would be precisely the wrong path to take," he said. "Moreover, this impressive performance is no fluke. It results from two structural factors: An improving economy is helping stabilize letter revenue, and Internet-driven online shopping is sending package revenue skyrocketing -- up 11.4 percent over last year.
"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 entity, public or private, is required to do this for even one year in advance; USPS must pre-fund 75 years' worth of these benefits in advance. That's the 'red ink.'"
