USPS reports fiscal year 2016 results
After accounting for a $5.8 billion retiree health benefit prefunding obligation, the US Postal Service (USPS) reported a net loss of approximately $5.6bn for fiscal year 2016, compared to a $5.1bn net loss for FY 2015. USPS said that it would have made a net income of around $200m, were it not for the prefunding obligation.
“To drive growth in revenue and better serve our customers, we continue to invest in the future of the Postal Service by leveraging technology, improving processes and adjusting our network,” said Postmaster General and CEO Megan J. Brennan. “In 2016, we invested $1.4bn, an increase of $206m over 2015, to fund some of our much-needed building improvements, vehicles, equipment and other capital projects.”
The Shipping and Packages business saw a revenue growth of $2.4bn, or 15.8%. This was offset by a decline in First-Class Mail revenue of $925m, or 3.3%, “due largely to the exigent surcharge expiration and continuing electronic migration”.
“The Postal Service continues to win e-commerce customers and grow our package delivery business. We deliver more e-commerce packages to the home than any other shipper because of our predictable service, enhanced visibility and competitive pricing,” said Brennan.
Overall, the Postal Service reported operating revenue of $70.4bn for 2016, excluding a $1.1bn change in accounting estimate recorded during the year. This equates to an increase of $1.6bn, or 2.3%$, over last year.
USPS commented: ” Despite the positive trends in some aspects of its business, the net loss suffered by the Postal Service this year cannot be ignored. Even with continued proactive and aggressive management, such losses are likely to persist for the foreseeable future because of mandated costs such as an unaffordable retiree health benefits program that is not fully integrated with Medicare, and an ineffective pricing system.”
According to Brennan: “This is why legislative and regulatory reforms remain critical for us to meet the needs of the American public now and well into the future.”
