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Quarterly report: USPS finances are rebounding strongly as economy improves

Statement from Fredric Rolando, president of the National Association of Letter Carriers, about today’s Postal Service financial report for the third quarter of Fiscal Year 2013:

The Postal Service’s latest quarterly report makes clear that its finances are rebounding strongly as the U.S. economy improves.

Although it reported a loss of $740 million, the agency would have reported a profit of $660 million absent the $1.4 billion payment it was charged for pre-funding future retiree health benefits—a bill no other company or agency in the country is required to pay. Operating revenue is up 3.6 percent compared to the same period last year.

That good operating picture was fueled by a sharp 8.8 percent rise in package delivery revenue from online orders, which offset the effect of online bill-paying, as well as by workers' compensation interest adjustments.

The sharp improvement over 2012 reflects the fact that the opportunities offered by the Internet (delivering goods ordered online) increasingly are offsetting Internet challenges (online bill-paying), which augurs well for the future.

All of the Postal Service red ink for the entire year to date stems from an external political factor: the 2006 congressional mandate to pre-fund future retiree health benefits, which no other entity in the country is required to do.

Given this, it makes no sense to degrade service or dismantle a network that is performing well and that provides Americans and businesses with the world's most affordable delivery network.

The congressional priority should be to address the actual source of red ink: the $5.5 billion annual pre-funding albatross that is hampering the Postal Service. This mandate is not only onerous, it is unnecessary, because the Postal Service already has put aside sufficient money to meet the needs of future retirees for decades to come. Few, if any, companies can say the same.

The path to profitability is clear: Address the pre-funding fiasco and give the Postal Service the freedom to innovate and grow in the digital era. Do not eliminate Saturday delivery, which would raise costs for small businesses open weekends, and do not force people to traipse around their neighborhood looking for cluster boxes. Such steps would inconvenience the public and would destroy the Postal Service by driving mail—and revenue—out of the system.

The latest financial results should finally convince Congress to deliver a postal reform plan that eliminates pre-funding; strengthens and protects the existing Postal Service network; provides a more business-oriented governance structure; and frees the Postal Service to meet evolving customer needs in the digital era. Unfortunately, the advancing House legislation and the recently introduced Senate bill fail to achieve these goals.