USPS keeps losing money, potentially putting people who depend on mail delivery at risk

WASHINGTON −The U.S. Postal Service’s 10-year plan to stop operating at a loss isn’t going well. And, if they can’t get back on track, that could threaten its ability to deliver the mail and pay its retirees’ benefits.

According to a federal watchdog group, expenses have grown faster than revenues for years partly because of the drop in first-class mail, it’s most profitable product. USPS also faces competition for package delivery from private companies while key costs, such as employee compensation, have continued to rise.

Any gains made since the plan was announced two years ago have been offset by increased costs that postal officials say are mostly due to inflation, according to an assessment published this week by the U.S. Government Accountability Office.

The agency recommended policy changes to improve implementation.

“The Postal Service’s strategic plan has the potential to help its operations and revenues,” GAO wrote. “But how well the plan is implemented will affect how much help it provides.”

Mail carrier Edward Medley of Groveport, Ohio, loads his delivery truck with mail and packages for his Obetz route behind the South Columbus, Ohio branch of the United States Postal Service on March 10, 2021.

The Postal Service hasn’t collected enough revenues to cover its expenses and debt for more than 15 years.

The volume of first-class mail is expected to continue to decline as people pay more bills electronically and communicate online.

Published in March 2021, the Postal Service’s strategic plan aims to at least break even by 2031 while also improving service.

Among the plan’s more than 120 components, major ones include closing some mail facilities and replacing aging delivery vehicles which are driving up maintenance costs.

USPS has also given itself more time to deliver the mail. The delivery standard for first-class mail and periodicals increased from a maximum of three days to a maximum of five.

Partly because of those changes, USPSA has improved on-time delivery performance.

Last year, the Postal Service recorded its best service performance since 2018.

But it’s also continued to raise rates.

In July, the price of a Forever Stamp increased for the fourth time in two years, to 66 cents.

That increase came not long after USPS reported it had lost $2.5 billion in the second quarter, an increase in net loss of $1.8 billion compared to the same quarter last year.

The greater losses were due in part to higher costs caused by inflation and declining mail volumes, according to the USPS.

In a meeting this month with the Postal Service Board of Governors, CEO Louis DeJoy said getting the financial ledger closer to goals will require a reduction in inflation, “more aggressive cost reductions,” increased package revenue and other changes, according to a copy of his prepared remarks.

“Well,” DeJoy said, “I am an optimist and I believe this is all achievable.”

No comments:

Powered by Blogger.