Saturday, February 27, 2010

December Was Profitable for U.S. Postal Service

The U.S. Postal Service had something in December it hasn't seen in a long time -- a profitable month.

The Postal Service had net income of $179 million for the month, it revealed in a report filed yesterday with the Postal Regulatory Commission. The USPS had more mail volume (9%) and revenue (6%) than budgeted, but lower expenses (-2%), enabling it to beat its budget by $546 million.

Holiday-related mail usually makes December one of the Postal Service's best months, but the USPS lost $185 million even in December 2008. The differences this year were a lower cost structure and higher labor productivity: Total work hours were 7.6% lower than in December 2008 even though mail volume was down only 3.2%.

The Postal Service is still on track to lose billions of dollars this year, mostly because of a mandated subsidy to the federal government (euphemistically referred to as prepayment of retiree health benefits). But the first three months of Fiscal Year (2010) are much better than budgeted and even a bit better than last year, despite a drop in mail volume of nearly 9%.

The USPS has managed to keep its expenses slightly under budget so far, despite mail volume running nearly 5% higher than planned. That has resulted in a quarterly loss of  "only" $297 million in the quarter, nearly $1 billion better than the budget.

The recent results disprove the notion that higher postage rates are the only way to balance the Postal Service's budget. That would only drive away business without decreasing costs much.

A better path is to reduce fixed costs with early-retirement incentives and facility consolidations. Postal officials have mostly followed that path, though the early-retirement bonuses have been too small and the pace of consolidations too slow.

9 comments:

Anonymous said...

Something that would really help is having stamps and services more accessible.People are getting the stamps by mail order envelopes & not getting stamps and if they do get them there is a wait. We as rural carriers have given out envelopes for stamps to be filled right then & there. We're suppose to carry stamp stock. Instead we have no envelopes to give. We're getting paid to sell stamps w/ no means. Use what you have managers, we're already getting paid to do this. In today's world people want things yesterday. The easier it is to use & get supplies the more $ we'll make.

stephen said...

I am sure that PMG Potter has payed out whatever money was made to all of his cronies by now.

Anonymous said...

Productivity being as a cost-cutting measure; what a concept. Be more generous with the early-retirement incentives, get rid of the dinosaurs, pay for a small portion of TE benefits, and you'll have productivity. Do the opposite of what got usps into this mess: stop letting these over-paid over-fed vets milk the system for all it's worth.

Anonymous said...

CSRS employees would love an adequate early retirement bonus - kind of like the government subsidized for GM - pay me to leave and I am "poof" gone!

Anonymous said...

TEs are the backbone and need to respected

Anonymous said...

TE'S ARE A JOKE! WE ALWAYS HAVE TO CLEAN UP THIER MESS!! THEY ARE NOT HELD ACCOUNTABLE FOR NOTHING!! WASTE OF MONEY!!!!!!!!!!!!!

Bee Kaye said...

We need more employees. Convert the TE's to Regulars or PTF's. Trim the fat (stupervisors) and the savings will grow.

Anonymous said...

Doesn't apply to all Regular but Regular are the JOKE. They can't even carry their own route. You sign up to carry not complain about how you got medical and stuff. ***Bump me down an hour boss cuz there's too much flat today and by the way let a TE carry it cuz I'm going throw it all.*** No regular going to pick my hour!!!! You wonder why they leave you a mess it's because your gave them a mess!!! That's why they need TE or else USPS would be in a bigger hole. I'm sorry but(Regular = big fat BABY). If it wasn't for the union alot of you guys would be FIRE!!! Now that how you save MONEY!!!!!!!!

Anonymous said...

I am TE and all I do is bust my ass for 6 to 7hrs per day doing a route and a split.with no day off.The waste of money are the PTFs they are the babies out there.They are the ones that cant walk.IF it werent for the TEs half the mail would not get delivered