Nearly a year into its supposed “Delivering for America” 10-year plan, the United States Postal Service (USPS) has showed little semblance of fiscal responsibility. But their financial turmoil continues, as the USPS just announced an astounding $1.3 billion in losses for the latest quarter.
The agency continues to fall billions of dollars in the red and despite attempted initiatives to mitigate these losses, it has been to no avail. Over the past year, the USPS has sought to delay mail delivery—its constitutionally mandated mission—as part of the “Delivering for America” plan with the hopes that it would shed costs. Besides angering Americans all over the country, the choice did little to assuage concerns about the agency’s fiscal health.
This delay of letter mail also highlights another troubling trend of the USPS—the shift in focus from letter delivery to parcel delivery. Choosing to prioritize a business that loses the agency millions of dollars each year including $1.3 billion in just this quarter, is a flawed one. ACI has previously written about the pitfalls of the USPS’s current business model that is in state of “fiscal decay.”
It is this misguided focus that also underlies the flaws in the Postal Reform Act, currently discussed in Congress, which could be voted on by members of the House of Representatives this month. Having seen the continued financial losses by the Postal Service, ACI finds it hard to imagine how Members of Congress who believe in responsible governance—especially those who claim to be fiscal conservatives—could find any value in this bill.
Any sort of Postal Reform must note how much each category of package shipping losing, even more important in another quarter of significant financial losses. This lack of accounting may even lead to more taxpayer funded bailouts which could perhaps be avoided with more transparent accounting and prioritization of letter mail.
It is clear that as USPS increasingly prioritizes its market-competitive practices such as parcel delivery, it does a disservice to Americans everywhere who simply want their mail delivered on time. With prices for First Class mail rising in order to support underpriced package delivery, the Postal Service current business model is not sustainable, as the First Quarter financials demonstrate.
ACI has emphasized the importance of alternatives to the current financially insolvent model, including examining the value of each postal service product on a standalone basis. Such a plan would ensure fiscal responsibility and perhaps even bring the USPS closer to reaching black ink.
With yet another quarter of significant losses, the USPS could, at the very least, consider looking into such a solution.