The Feds Mandate That the US Postal Service Lose Money

❝ For the first three months of 2018, the US Postal Service reported a $1.3 billion loss, up from $562 million a year ago.

The basic issue is that revenue is growing more slowly than expenses. Total revenue grew by 1.4% while total expenses grew by 5.7%. Clearly, that makes for a less profitable business. This is a government-mandated financial squeeze and there are two main causes.

❝ First, regular mail—that is, the ordinary letters sent by individuals and businesses on a daily basis—is a declining business; volume-per-end-point (the mailbox) declined by 3.4% this year. Overall, regular mail is down 35% over the past 10 years. The problem is that the cost to deliver doesn’t decline with lower volume…

❝ Second, retirement expenses are growing significantly. Retiree health benefits increased 60% since last year and unfunded retirement benefits increased a whopping 142%…

RTFA. After all, there is some good news. Mostly from doing business with folks like Amazon.

5 thoughts on “The Feds Mandate That the US Postal Service Lose Money

  1. Gloom of night says:

    President Donald Trump plans to withdraw the U.S. from a 192-nation treaty that gives Chinese companies discounted shipping rates for small packages sent to American consumers, another escalation of his economic confrontation of Beijing.
    U.S. officials said the administration sought to revise the treaty in September and was rebuffed by other nations, prompting the decision to withdraw. The State Department will deliver a notice to the Universal Postal Union in Switzerland Wednesday, White House Press Secretary Sarah Huckabee Sanders said in a statement. https://www.bloomberg.com/news/articles/2018-10-17/trump-is-said-to-plan-withdrawal-from-china-shipping-treaty
    The cost of mailing a letter might be going up in January. In an effort to improve its financial situation, the U.S. Postal Service is proposing a 5-cent increase on its first-class stamp, which would increase the cost of mailing a one-ounce envelope from 50 cents to 55 cents. https://www.pantagraph.com/lifestyles/simplemost/the-postal-service-is-proposing-a–cent-increase-for/article_99e08da5-242d-5c26-9aa4-63484b90ed93.html
    Also: US Postal Service seeks to raise package delivery rates 9.3% to 12.3% https://www.digitalcommerce360.com/2018/10/12/us-postal-service-seeks-to-raise-package-delivery-rates-9-3-to-12-3/

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.