Accuracy in Media

WASHINGTON — In another not-so-stunning display of government agency ineptness, the U.S. Postal Service (USPS) saw a $2 billion loss in the second quarter of the year 2014.


As Reuters said, the agency “continued to bleed money…despite an increase in package revenues and an emergency price hike that took effect in January.” So, from April to June, the postal service saw a net loss of $740 million during the same quarter last year.

The preposterous fact is how the agency saw a 2% rise in total operating revenues to $16.5 billion, yet had a $2 billion loss. This comes after the USPS has focused on shipping and package business, expanding Sunday package delivery. That part of their business saw revenue increase by 6.6% compared to last year’s second quarter period.

The revenues of first-class mail dropped 1.4%, which was blamed on the prevalence of e-mail, but the aforementioned rate increase helped offset that decline.

What is to blame for the $2 billion loss? The increase in worker compensation amounting to $1.5 billion. USPS blames its losses on having to put billions of dollars into future retirees’ health care and not being able to circumvent or change that.

A previous initiative to cut Saturday deliveries was defeated by the postal carrier union. And despite the news, union president Frederic Rolando said, “Given the positive mail trends, it would be irresponsible to degrade services to Americans and their businesses, which would drive away mail – and revenue – and stop the postal turnaround in its tracks.”

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  • Guy

    This post, or its assumptions, shows a error or weakness in the Conservative position. Here is the issue. What are we to make of the Post Office? What is a capitalist to make of the Post Office? And how much of the standard received knowledge is real?

    First, has the Post Office Lost Mail Service to Email? Not likely. However it is knowable and it is significant no one has tried to figure it out. The decline of First Class and other document services during the ascendancy of email excludes the inroads into Post Office business made by Fedex, UPS, DHL and other private carriers.

    The fact is that attributing loss of document mail is assumed to be unrecoverable because of emails. Yet it is likely email made its own demand and likely affected inter and intra company telephone calls far more than they do mail service. In fact the argument is made about emails effecting Post Office business because the word “mail” describes them both.

    Another intangible of course is that the Post Office has by now “enjoyed” a 200 plus year history of Democratic corrupt patronage and attendant top heavy management – just like other slow moving corporations we have had to bail like Citigroup.

    Believe me I am no Union advocate – but when we bailed out Citigroup it wasn’t because of the tellers.

    To understand the Post Office someone had better look at their distribution of employee costs by job function. To go far afield but use another Government bureaucracy, in New York State people in Education Administration outnumber the number of people teaching in classrooms 3 to one. We do not need 125,000 people to manage 46,000 people but the government does.

    Dishing the Post Office without really strong reasons is a bad mistake. Letting the Post Office continue as an albatross is a worse one.

    Kudos to those who have the solution.

  • Steven Barrett

    The only solution will come from the very body that saddled the Post Office with a crippling burden in the form of paying off a huge pension debt in advance. No other company or agency in the nation was hit with such a wallop. And the Congress that pulled this off was Republican. Why? Because the Post Office was beating the pants off UPS, and what a coincidence since one of UPS’ top lobbying guns was the future Mrs. Paul Ryan. I’ll let you follow the trail from there. See, with some people, there’s no problem with government interference in the private sector so long as it benefits only the private sector.
    UPS does yeoman’s work and they work well with the Post Office now. I hate to imagine the inconveniences that’ll happen for the less well off who cannot afford the internet; especially our elderly. That’s just one example. How the hell many people do we have to treat like crap just so Paul Ryan can line his pockets and those of his closest supporters who don’t recognize him for what he is, a modern day Sheriff of Nottingham? Austerity for the rest of us, conservatives, moderates and liberals alike, prosperity for him and his merry few.
    What the supply siders and austerity knuckleheads are trying to do is pull a flanking job on the post office by bleeding it first. Then it’ll be ripe for what is legally required to kill what Ben Franklin began: Killing it by a constitutional amendment.