U.S. Postal Service Loses $2.2 Billion in First Quarter: $7 Billion Expected Loss for the Year


Wednesday May 11th, 2011   •   Posted by David Theroux at 4:49pm PDT   •   4 Comments

Ed O’Keefe reports at the Washington Post that the U.S. government’s postal monopoly continues to hemorrhage red ink at an astounding rate as a result of huge and unsustainable, public-employee-union pension schemes:

The U.S. Postal Service reported $2.2 billion in losses during its second quarter, continuing several quarters of historic losses amid declining mail volume and financial obligations to prefund worker retirement benefits.

Postal officials said Tuesday that the mail agency is still on course to lose about $7 billion when its fiscal year ends in September.

Revenue in mail deliveries totaled $14 billion in the second quarter, down about $568 million, or 3.9 percent, from the same time last year. Shipping revenues also dropped to about $2.2 billion, a 5 percent drop from 2010.

Year-to-year, total mail volume dropped 3 percent to 41 billion pieces in the second quarter, led by ongoing drops in first class mail. . . .

For the full article, please click here.



4 Responses to “U.S. Postal Service Loses $2.2 Billion in First Quarter: $7 Billion Expected Loss for the Year”

  1. Wayne says:

    First of all, the US Postal Service is not a government monopoly. The Postal Service is a private run business and is not subsidized by the govt! There are no schemes by the union. To be a member of the APWU is voluntary and without it, postal workers would still be in the stone age.

  2. Wayne,

    (1) The U.S. government owns the 596,000-person USPS, not private citizens, and there is no private equity in the USPS (i.e., it is a socialist enterprise). The USPS should instead be privatized as has been the case in New Zealand, Germany, and many other countries.

    (2) The U.S. government strictly forbids the private delivery of first class mail and mail to any mail box in the U.S., creating the USPS as a government monopoly.

    (3) The U.S. government provides billions in dollars in loans and subsidies for the USPS’s annual losses and has been doing so for years.

    (4) Membership in the government postal unions (e.g., NALC, NRLCA, NPMHU, and APWU) makes up the great bulk of all postal workers and without these labor monopolies, postal costs would be a fraction of what they are now and employee benefits would be better and more competitive, just as is the case for UPS, Federal Express and other private delivery services.

    Please see the following:

    “It’s (Past) Time to Free the U.S. Mail,” by William Shughart

    “Going Postal: Regulatory Reform for the Digital Age,” by James A. Montanye

    “It’s Time For Congress To Go Postal,” by James A. Montanye

  3. [...] yet the US Postal Service continues to hemorrhage billions of dollars in red ink to the tune of $7 billion this year that the taxpayers will have to pick up the tab [...]

  4. Kevin says:

    I agree that junk mail is bringing in a lot of money but it’s not doing enugoh, the postal service is still failing. There is no point in chasing a revenue that will never meet your costs. Effectively, the postal service is digging their own grave by chasing advertising, it requires many more resources and sets up a doomed system. The more junk mail we get the less appealing mail becomes and the less we use it to communicate, once we stop using it the junk mail revenue will slow and stop. If the postal service continues to base their structure and decisions around junk mail, although it’s a large source of revenue, it will continue to lose money. That said they could probably make some good money buy having advertisements on their online user applications (like the one I mentioned), possibly more it’s better at tracking and costs less to produce for advertisers.So much has changed since the Postal Service was created, it’s not just that we email and call to communicate more, there are physically more houses and we are further spread apart. I believe the answer is to increase efficiency. Like you mentioned, cutting delivery days would do that but it also slows down the time to get your mail which is already one of it’s faults. Though it is a big step, I think stopping residential delivery all together would be the most efficient, mailboxes would allow you receive mail any day of the week and coupled with an electronic system like I mentioned would ease people’s minds that they are not missing anything. I think it would have to be rolled out slow and tested in high density cities first, but eventually could be rolled out over most of the country. It could even start out as an opt in, I’d do it to be able to have a digital copy of all my mail and send it to wherever I am. A slow rollout would allow junk mail revenue to continue longer while also creating revenue with online advertising. Even if everyone goes digital, junk mail will still be seen, just probably not kept, things like post card advertisements would still work pretty well.Strangely, like you mentioned, this system opens the door to having mail sent to a person instead of a physical address. Just identify the person you want the mail to go to and then the system could reference the account to determine where they are. There is no need for a personal physical mailbox, just an available one that’s there when and where you need to pick it up.While mail will decrease, package delivery will grow slowly. More people will be buying products online, but things like books, CD, DVDs, video games, and software will more and more be delivered digitally. I can’t imagine mail becoming obsolete but I can see the USPS dying. How would you suggest the USPS exit? They have so many trucks, buildings, employees, and machines. Has anything like it ever happened before? I imagine that they would have to find a buyer for it all.

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