Despite the U.S. Postal Service’s positive outlook surrounding its last quarterly financial report, the stark reality remains that the agency’s losses continue – this time with $562 million in the red. By touting the gains in “controllable income” the USPS presents an incomplete and misleading perspective of the full costs that it incurs to bring its ever-expanding assortment of services to market.
Similar to past fiscal updates, the USPS has continued to make specious claims about the nature of the payments into the Retiree Health benefits fund. Attempting to disregard these obligations is largely disingenuous on account of the fact the agency argued in favor of the current system, which they now argue is unfair, dismissing their necessary retirement-funding obligations.
As American Consumer Institute president, Steve Pociask, has pointed out, the Postal Service is well-fortified with profitable and high-volume lines of service. Specifically, these Standard Mail and First-Class letter services return more than $2 in revenue for every $1 of attributable costs. Given such success and its guaranteed base of customers through its government-backed monopoly, the prospects for fiscal sustainability are very real indeed.
Further, as Pociask has also written, the Postal Service has endangered itself by viewing its profitable products as a financial crutch to support more speculative lines of business that continue to be low margin, no margin, or underwater ventures.
As result, consumers are stuck with the difficult circumstances of paying artificially inflated mail rates and forced to deal with declining service. With the Postal Service diverting its attention to competitive market entries, it has failed to meet performance goals for 25 out of 27 total First-Class and Standard mail products.
The U.S. Postal Service’s dismal performance and ongoing fiscal disorder necessitates more astute management at the highest levels of the agency. The USPS’ Board of Governors, which oversees the USPS, has been depleted, leaving zero of the nine presidential-appointed positions filled. We are currently left with the Postmaster General and Deputy PMG providing oversight of themselves, which is hardly a suggested tactic in corporate governance of a $70 billion entity. The new administration and the Senate must correct this astounding absence of oversight by immediately putting in place new leaders who can help run the USPS in a much more accountable manner.