The United States Postal Service reported a net loss of US$5.1 billion for fiscal year 2015 (October 1, 2014, to September 30, 2015). The net loss, according to the USPS, is largely due to certain statutorily mandated payments over which the Postal Service has no control. Behind the loss, total revenue was $68.9 billion (all dollar amounts in U.S. figures) for the year, an increase of approximately $1.1 billion from 2014.
“We achieved controllable income in excess of $1 billion for the second consecutive fiscal year giving us some limited flexibility to make critical investments in the future of the organization,” said Postmaster General and CEO Megan Brennan. “To maintain this success we will need to continue our efforts to grow the business and drive operational efficiencies. However, we will also need the enactment of legislation that makes our retiree health benefit system affordable and that provides increased pricing and product flexibility.”
Controllable income for 2015 was $1.2 billion compared to $1.4 billion last year. Controllable income is defined as net loss excluding expenses related to the mandated prefunding of retirement health benefits, actuarial revaluation of retirement liabilities and non-cash workers’ compensation adjustments, which are factors largely outside of management’s control.
The USPS explained its large net losses continue, and controllable operating expenses increased $1.3 billion from last year. This was the result of a combination of factors, according to the USPS, including higher compensation costs attributable to increased benefits expenses and additional work hours partly associated with growth in the more labor-intensive shipping and package business.
“Adding to the financial pressures that the Postal Service will face in the short term is the fact that the exigent surcharge authorized by the Postal Regulatory Commission in 2014 will need to be rolled back in approximately April of 2016,” said Chief Financial Officer and Executive Vice President Joseph Corbett. “This surcharge has provided an additional estimated $3.5 billion in revenue since its inception, and will provide a total of $4.6 billion in additional revenue at the time when the commission will require us to eliminate the surcharge.”
For 2015, total USPS mail volume of 154.2 billion pieces fell slightly from 155.5 billion pieces in 2014, as First-Class Mail and Standard Mail volume decreased by 2.2 percent and 0.3 percent, respectively. Shipping and Packages volume increased 14.1 percent.
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