Today, the U.S. Postal Service announced a $5.6 billion loss for the 2016 fiscal year. These poor results now mark 10 straight years in which the USPS has produce a loss of $1 billion or more. As a result of this trend, the Postal Service has lost over $50 billion during this time period.
American Consumer Institute is greatly dissatisfied by USPS’ inadequate leadership that has neglected to provide the right structural and operational decision-making that is necessary to bring financial stability to the agency. Furthermore, proper leadership is essential for the Postal Service in ensuring that its current and future abilities to fulfill its primary services to customers throughout the nation is maintained.
As reported in its annual filings with its regulatory commission, the Postal Service indicates that its core services (primarily letter mail) are often its best profit engines by returning more than double the amount of revenue compared to direct costs of providing the services. These windfalls however have sadly not been used to improve the USPS overall financial position nor allocated to maintaining the quality of letter mail delivery. Year after year, service performance for Standard and First-Class letters have steadily declined even as USPS has lowered its target service goals.
Questions about where USPS’ revenues are going will undoubtedly remain as the agency continues to limit its transparency with regulators, lawmakers and the public. The critical financial information about the Postal Service’s forays from letter mail into experimental areas like competitive package services, grocery delivery and other specialized offerings remains scarce.
Gaining this transparency in order to make an honest assessment about USPS operations will be an essential step for the new Congress and new Administration that is set to take office in January. Based on what is known, all signs point to the need for the Postal Service to scale back its experimental money-losing ventures and return to its constitutionally-chartered duties.
Ultimately, a sound fiscal plan centered on mail delivery is the only way to help improve the Postal Service’s long-term outlook and maintain its ability to best serve the nation’s customers.