Why 2013 Could Be The End Of The U.S. Postal Service

After five years of declining revenues and mounting debt, the USPS could go under this year without a bailout.

The U.S. Postal Service lost nearly $16 billion in 2012, and now its inspector general tells the Guardian newspaper that the service, which is responsible for processing 168 billion pieces of mail a year, could go out of business unless Congress approves a bailout.

We've previously written about options that could potentially save the service, whether through embracing technology or undergoing a radical rebrand.

What do you think should be done about the failing agency? Tell us in the comments.

[Image: Flickr user Bogdan Suditu]

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15 Comments

  • Val Nostdahl

    research for usps situation:  free google book to read or amazon.com, search inside this book, The Post Office, its past record, its present condition and its potential relation to the new world era, Daniel Calhoun Roper, chairperson of the United States Tarriff Commision, and First Assistant Post Master, 1913- 1917, in 1917, congress was ignoring the plight of postal workers and the working conditions, so collective bargaining was formed , in 1935 the right to unionize was passed into law, along with union came improvements for labor workers, including social security, the fair labor standards act, medicare, medicade, 40 hour work week, minimum wage, health and safety laws on the job, child labor laws, retirement and health benifits. In 1970 postal employees were not making the same wages as those in the private sector, and many were on welfare working for the USPO or working 3 jobs to survive, the great postal strike took place, with re enforcment of collective bargaining rights, and the no strike law. In 2000, 2001, according to Nalc legislative fact sheet, postal letter carriers and craft members were made to pay in an extra 15 percent to their federal retirement systems, known as fers or csrs, the postal employees were thanked by the President and congress for their 'sacrifice', basically this was an overfunding of retirment systmes, fers was overpaid by 15 billion and csrs by 140 billion, so then the increase in tax from the postal employees checks was stopped in 2002 and withdrawn from the Presidents budget. In 2003, congress was informed by the USPS of overpayment or overfunding of pensions funds, so in 2006 the Postal Accountibility and Enhancement act was passed by voice vote in to law, establishing from the Postal Profits that postal employees helped to earn by working a 3rd retirment system worth 47 billion currently for workers not born or working for the USPS from 2006 until 2016, placing profits in escrow for future retirees, meanwhile giving pay per performance bonues to those 12 tops executives in the USPS including PMG Potter at that time with a pay increase of 72 thousand a year, and basically doubling salary and benfits to 800,000 ( the President only gets 400,000 a year) he retired in 2010 with an anual retirement worth 5.5 million, here are links for research: AWPU 3800, first area tricounty local, PA, library, stress in the work place articals, " how the ongiong violation of the USPS guiding principals are creating a toxic work environment, " copywritten 2008, www.billburrasjounral.org-misc, search to find, go to elevator page, scroll, read " phoney excuses for diverting usps revenues, and myths versus facts, go to search Find and look up : ALEC/Koch Cabal The Privitization of USPS for Ups and FedEx, bob sloan, vltp.net, april 2012, go to Examiner.com, Tim McCown artical, june 2012, "behind all the schemes and lies of the privitzation of USPS, go to the Michigan American Postal Workers Union, find the artical ' the truth about the postal crisis, go to www.savethepostoffice.com  , go to search and type in Why Congress Should Address Quickly The Retirement Funding Issues Affecting The Nations Postal Service.

  • Tameman1980

    The word bailout is inaccurate when describing what the postal service is asking of Congress. The Postal Service is failing because of rules places on us in the 1990s by Congress. We are being choked out. "Bailout" is inaccurate please do your research on our situation.

  • Derald John Tucker II

    make people pay a refundable deposit for the "free" boxes...and if they use them for packing instead of shipping, at least they have paid for them!

  • Keith West

    Pensions, healthcare and Congress are sideshows. The fact is the postal service has to maintain an overhead setup to do what people want less of, the delivery of printed material. The trend will only accelerate as people more even more activities online. That will drive higher prices and less use.

    The postal service can survive to cutting home delivery to perhaps once a week. Mail would be available for pickup at anytime. This would allow enough personnel cuts to make USPS once again a going concern.

  • RandyF

    Whoa, whoa, whoa. The USPS has repeatedly stated that it is not looking for a bailout of any sort.What the USPS does want is for the clowns that managed to get elected to Congress to get off their collective butts and get the legislation taken care of that they have been sitting on for well over a year.

    The prefunding of future retiree health benefits is to blame for around 82% of the total USPS losses since 2007. Although losses would still have occurred, those losses would have been manageable.

    2007, Net income was actually $3.3 Billion, well, except that the USPS had to pay the treasury $8.4 Billion so, it's a $5.1 Billion loss.

    2008 Net income was actually $2.8 Billion except the deposit of $5.6 Billion showed a loss of $2.8 Billion.

    See where this is going? Every October 1st, the USPS has about $5.5 Billion in red ink on the books.

    2007-2011 actual net income was -$4.3 Billion. That is the real amount of operational losses. Factor in the money that had to be put into the treasury and that number swells to -$25.2 Billion. Of the $15.9 Billion loss posted for FY 2012, $11.1 Billion was because of the payments that were not made. It's a paper loss.

    Building a $55 Billion fund for future retiree health benefits for the next 75 years is not necessarily a bad idea. In fact, it is a great plan. The flaw in this particular plan is that Congress mandated that the entire $55 Billion had to be paid in only 10 years. There is not a single other entity, public or private, that has to fully fund a plan 75 years into the future for people that may not even be born yet.

    If you want to call it a bailout to ask for a restructuring of the payment schedule, so be it. You must listen a lot to Darrel Issa. This idiot has a piece of legislation that he thinks is going to save the Post Office and managed to get 1 co-sponsor. A competing bill has over 200 co-sponsors. Guess which bill Issa-Hole is blocking from coming to the floor for a vote.

    Overall, if Congress would leave the USPS alone, and stop raiding its coffers, it would be just fine.

  • Guest

    More proof that gov't shouldn't being trying to run a business. Privatize, restructure by breaking the union and trimming the dead weight, then let them compete in an open market without congressional meddling.
     

  • $24604893

    "compete in an open market without congressional meddling. "

    The rest of your post is worthless tripe. The above is a gem that encompasses 100% of USPS' problems.

  • Matthew Schwartz

    The solution is very simple.  Just look at their financials.  Their single biggest expense, by far, is pre-funding health care plans, which was mandated by Congress with unreasonable deadlines. Their revenue is fantastic and can definitely cover all expenses if spread over a reasonable time frame.  Remove Congress from controlling the USPS budget and everything can be easily worked out.  Let them truly run independent.  Many in Congress have the intent of destroying the USPS to help private industry, so remove them from the equation.

  • Steph @ Flapjack Media

    This infographic shows 10 years of financial history for the USPS. 
    While pre-funding health care plans has made a significant impact in net
    losses, it is not the biggest expenditure.  Labor costs account for about two-thirds of USPS expenses.

    http://visual.ly/decline-us-po...

  • Lah0510

    There may come a time when the internet cannot keep ahead of hackers and identity thieves.  We will need to go back to physical mail to get things done

  • Taylor Aldredge

    Clearly, the U.S. Postal Service can't compete against the other shipping giants, and the advent of digital technologies both mobile and desktop-related are really hurting the organization. I think they need to be treated like a bankrupt company and restructure the company from the ground up.  Let them go through bankruptcy with the hope they come out better after a couple years.  It would at least give them a fighting chance before possibly privatizing (which doesn't always work for big federal organizations).

  • $24604893

    You might want to do a little research. USPS has only $15 billion in debts and no unfunded pension liabilities. It's retiree health benefit fund, at over $47 billion, represents around 50% of its liability - a stronger position than ANY Fortune 1000 company. Absent its crushing federal mandates it is a company with $330 billion in its pension/benefits funds, $105 billion in real estate, debt of $15 billion, $65 billion in annual revenues, and $67 billion in expenses. Bankrupt? Hardly.

  • Malik Graves-Pryor

    Except, this isn't true. The USPS is doing just fine competing against UPS, Fedex, DHL and others. It's the mandate from Congress that the USPS has to fund their healthcare obligations many years in advance that has been destroying
    their fiscal bottom line the past several years.

    That's an obligation that the private sector companies don't have to deal with and has blown a hole in the USPS's balance sheet.