LIGHT AT THE END OF THE TUNNEL

As the New Year 2012 arrives, there is finally some positive press concerning the postal service. NAPS, showing good faith, agreed to return to the bargaining table with the USPS to try to come up with a pay package that we all can live with during these trying times. If an agreement cannot be reached by the end of January 2012, NAPS will proceed with fact finding….It’s a win-win for both sides.

I read the following article on Postal News.com and felt that I should share it with all of you. In my opinion it sum’s up what we are going through. “USPS nets 152 million from operations, loses $1.8 billion to politicians.”

The USPS took in 40 million more then it spent in November, and after two months of the new fiscal year, has a net income of $152 million. In the private sector that would be called a “profit”. Thanks to Congressional accounting gimmicks, however, the USPS will report a net loss of over $1.8 billion for the two month period. The entire 1.8 billion loss is due not to USPS operations, but to legislation enacted by the Bush administration and the GOP controlled Congress in 2006 that requires the USPS to contribute $5.6 billion to a so called “trust fund” which has so far amassed over 42 billion from USPS profits.

While right wing politicians claim the trust fund is simply a “prudent measure, no other agency or company has a similar burden. The real reason for the requirement appears to be the shifting of billions of dollars of the national debt on to the USPS which is, conveniently,” off budget”. The politically induced “bankruptcy” also provided cover for draconian legislation proposed by Darrell Issa, which would dismantle USPS bargaining agreements, and set up a postal “death panel” to gut the service’s infrastructure.

As far as “real world” financial results are concerned, USPS expenses remained level with the prior year, but revenue was down 3.5%. The decline in revenue reflected the continuing drop in mail volume, which dropped 6.3%, or 2 billion fewer pieces of mail. Standard mail, which has shown some growth last year, is down 7.3% in FY 2012 so far.

The only bright spot in the volume numbers was the 33.6% increase in shipping services volume. While ecommerce driven package delivery is an obvious growth opportunity for the USPS, the problem is that it still represents just 15% of total revenue.

In my opinion if Congress relieves us of the 5.6 billion which is used for prefunding retiree’s health benefits, streamlines through attrition, or incentives, allows us to compete on the open market, the Postal Service will be a viable option for years to come.

Stay Strong,
Tommy Roma.