In the latest financial report released by U.S. Postal Service for the second quarter of 2019, the agency reveals a clear continuation of its dire fiscal position as a result of destructive business practices.
The new quarterly loss of $2.1 billion for the most recent three month period brings the Postal Service to a loss of $3.6 billion for the first half of its fiscal year. This likely confirms the USPS will produce its 13th consecutive year of net losses amidst a dearth of workable strategies and unwillingness on the part of its leadership to rectify its most pressing operational issues.
Following the USPS’ release, American Consumer Institute president Steve Pociask issued the following statement:
“The trends in the Postal Service’s financial decline largely stem from its pursuit of increasingly costly lines of service, like a variety of competitive services, and also its failures to identify substantive savings. The Postal Service needs to prioritize sound accounting principles in its forthcoming business plan instead of seeking changes that invariably shift its fiscal distress to taxpayers.”
The “business plan” referenced by Pociask was a key item discussed by Postmaster General Megan Brennan during a recent House Oversight and Reform Committee hearing, and now lawmakers expect USPS, by mid-July, to deliver a robust outline for achieving a financially sustainable set of service offerings.
As American Consumer Institute has noted, USPS service costs still substantially outpace total service revenues, prompting a clear need for transparency among its expenses and pricing tied to each of its individual services. Ultimately, there is a clear need for a framework in which costs are full allocated, in addition to a need to establish balance sheet separation between competitive and market dominant units.
For the Postal Service to realize its vision of operating like a self-sustaining and independent entity, it must sincerely commit to conventional balance sheet measures. Establishing these traditional degrees of corporate accountability is essential in order to deter any of efforts to maneuver debts to federal government programs and taxpayers at-large.