Postal Service Wants to Offer Payday Loans, The Mail is Arriving Way too Late, Watchdog Reports, Find Postal Service Jobs Without Being Scammed, Mail Delivery Could be Even Slower Than USPS Admits, History of the United States Postal Service, Living Past 90 in America is No Decade at the Beach, How the Votes Are Counted on Election Day, Code of Ethics for United States Government Service, Go Green Forever Stamps Good for the Environment, Republicans Move to Cut Federal Workforce, Postal Accountability and Enhancement Act of 2006. The Postal Service reported a loss of $2.7 billion for the fiscal year that ended Sept. 30. Fact Check: Is The Post Office Losing Money By Delivering Packages For Amazon? The post office may be losing money, but Amazon is not to blame ... post office losses would be even greater,” said Satish Jindel, founder of the consulting firm ShipMatrix. Is the post office making or losing money delivering Amazon packages? Unlike the last three postmaster generals, DeJoy is not a career employee; he is a large GOP donor and the former CEO of a logistics company. The post office attributed revenue increases to cost-cutting and growth in … Where do we go from here? 0 0. It survived the Civil War, two world wars, the Great Depression, and the upheaval brought by the internet and email. Lawmakers on Capitol Hill had tried to work aid for the Postal Service into the $2.2 trillion coronavirus relief packaged passed in March. Tom Murse is a former political reporter and current Managing Editor of daily paper "LNP," and weekly political paper "The Caucus," both published by LNP Media in Lancaster, Pennsylvania. Also, our fully tax paying retailers are closing stores all over the country…not a level playing field! The Post Office card account provides a simple way to receive pensions, tax credits or benefits, and withdraw them as cash at a local branch – with no overdraft, fees or charges to worry about. Money Pit: The USPS Has Lost More Than $46 Billion Since 2007 – 2015. By Dave Edwards & Helen Edwards. The other side of the USPS is the parcel-delivery service, which is profitable. The post office is losing a fortune, but Trump is wrong to blame Amazon. Which brings us to today. This creates a $6.5 billion annual shortfall that could easily be avoided.” The solution, O’Rourke says, would involve three steps: There’s been a lot of buzz surrounding the United States Postal Service lately, from the speed of mail delivery to the uncertainty of its future.. That is because as mentioned above, the USPS has some unusual expenses, imposed by Congress, that artificially depress earnings. But it's currently more than $160 billion in debt, and it's telling Congress it will run out of cash by September and needs a $75 billion infusion. The postmaster general has told Congress she expects the USPS to be completely out of cash by September. In its most recent annual report, the post office said it had incurred almost $78 billion in losses from 2007 to 2019. There are several key reasons that the USPS is hemorrhaging money. If the letter from Uncle Ben arrived a day or so later, nobody fussed. A … So, basically, the USPS was fine. In 2017, the service lost $800 million on $69.7 billion operating revenue. Once the bill was enacted, USPS had to contribute about $5.6 billion a year for people who had not yet retired, in addition to the normal amount for current retirees. The modern innovations of email, texts and the internet helped turn this into a money-losing business. And then, in early May, Trump appointed Louis DeJoy the new postmaster general, and he will take the reins of the organization on June 15. The Postal Service said it had made "significant cost reductions in areas within its control" by 2011 but claimed it needed Congress to approve several other measures to boost its financial outlook. The rule has created an environment where packages are the post office's only profitable area. However, with fewer people and businesses because of the COVID-19 outbreak, the quasi-governmental Postal Service—which relies on user fees rather than taxes—could be forced to close its doors as early as June 2020, lawmakers warned. The timing for this was not ideal, either. Under a … The Postal Service carried billion-dollar surpluses for many years before the Internet became widely available to Americans. The United States Postal Service is hemorrhaging money -- $25 million a day to be precise. The 497,000 Americans who rely on the USPS for their jobs, and the 329 million Americans who rely on it for paying bills, medication, and everything else the USPS delivers through rain, sleet, snow, and even pandemics. First-class mail, marketing mail, and other products the post office does not have a large competition for were all tied to the consumer price index, meaning it couldn't increase rates for those products above the rate of inflation. As you can plainly see, just five little numbers, quick as can be. US Postal Service Announces $5-Billion Loss – 2015. Naturally, the post office is not exempt from that impact, and it didn’t take long to feel its … “Based on a number of briefings and warnings this week about a critical fall-off in mail across the country, it has become clear that the Postal Service will not survive the summer without immediate help from Congress and the White House. Medicines are going into people's homes through the post office," he says. Claim: The United States Postal Service (USPS) is losing money due to a 2006 law mandating it fund its pensions 75 years in advance. Competition from UPS and FedEx made the post office innovate on its offerings, like introducing express mail. This would make it unable to pay its employees and could quickly cause disaster in mail delivery across the country, especially in rural areas not serviced by UPS and FedEx. Without these burdensome requirements, the USPS would neither be losing money nor experiencing its … ... the Postal Service wouldn't be losing money if it charged more to Amazon and ... the post office … $2.7 billion in 2017. But mail volume is way down, and the USPS is losing billions of dollars. Clip: What a system! These include falling demand for mail delivery, high employee costs, and surging benefits. It also set up the elimination of the post office's direct government subsidies, which were completely phased out in 1982. Four charts explain the Postal Service’s financial struggles. No Wonder the Post Office Is Losing Money! “The Postal Service is in need of urgent help as a direct result of the coronavirus crisis,” said the House Committee on Oversight and Reform. Up until this point, the post office added to and removed from its retiree pension and healthcare accounts on an ongoing basis, putting money in as needed, based on its current retirees. A leading-edge research firm focused on digital transformation. By using ThoughtCo, you accept our, COVID-19 Pandemic Threatens Postal Service Survival. “ The Post Office has lost money for years, though advocates emphasize it’s a subsidized government service rather than a profit-maximizing business like FedEx or … And without that revenue, the Postal Service would lose a lot more money than it is already losing. See also: Find Postal Service Jobs Without Being Scammed, "We must pay today for benefits that will not be paid out until some future date," the Postal Service said. Postal Service (USPS) had largely completed Post Office Structure Plan's (POStPlan) implementation prior to a 2014 POStPlan arbitration decision and expected millions in cost savings. Clip: HR 6407, a bill to reform the postal laws of the United States. The US government demands that the post office lose a lot of money. In April 2020, lawmakers warned that losses related the novel coronavirus COVID-19 flu pandemic could threaten the Postal Service’s very existence. Reuters/Brian Snyder. Account active Parcels are growing the Postal Service The Postal Service reported a net loss of $2.7 billion for 2017. No Wonder the Post Office Is Losing Money! The Next Bailout? The postal service has lost money for 11 straight years, mostly because of pension and health care costs. In 2006, prior to the new bill, this was $1.6 billion for those who were already retired. Additionally, the new bill restricted the post office's ability to set prices. May 11, 2018 This article is more than 2 years old. Isn’t the post office losing money? However, without unreasonably burdensome restrictions, it would likely be a different story. COVID-19 has hit businesses and institutions across the country and around the world. Parcels are growing the Postal Service The Postal Service reported a … Many would have us do away with the Postal Service altogether. Postal Service Losing $42,335,766 Per Day – 2012. How did this happen? In 2017, the service lost $800 million on $69.7 billion operating revenue. Already burdened by a negative net worth of $65 billion and an additional $140 billion in unfunded liabilities, the USPS originally expected to run out of liquidity by 2021 without help from Congress. This has caused various problems, like in 2009, when prices couldn't be raised at all on those products, because there was no inflation. That loss is partly — but not entirely — attributable to the post office’s obligations to put money aside for retiree benefits that were awarded to employees (but were not pre-funded) in the past. To put this in perspective, that'd be like you only working from age 18 to 28 and then expecting to live on that income until you were 103 years old. President Trump has repeatedly attacked Amazon and the U.S. Clip: The post office stands to be swamped, overwhelmed, drowned in a sea of mail. It reported a $2.7 billion net loss in 2017 . The post office is a government agency, but thanks to the Postal Reorganization Act, a law that was passed in 1970 in order to help modernize the post office… The post office has been an American institution since 1775, when Benjamin Franklin was named the first-ever Postmaster General.The first stamps were issued in 1847, and city delivery got its start in 1863. There is much criticism of the Postal Service for losing money. The Post Office Lost $2 Billion In Just 3 Months. The post office is meant to be self-sufficient, but it hasn’t broken even for years. The Postal Service Lost $3.9 Billion Last Year Despite a $1 billion increase in revenue, unsustainable personnel costs pushed USPS' losses to such great heights. USPS just hired FedEx to haul mail for it for the next seven years... for $10.5 billion. Official site of The Week Magazine, offering commentary and analysis of the day's breaking news and current events as well as arts, entertainment, … The Post Office Has Lost Nearly $20 Billion In Four Years – 2011. The post office has been losing billions of dollars for years, but because the pandemic crushed mail volume, it’s on pace to lose at least $12 billion this year. "The Postal Service is not losing money because of Amazon," the post says. There is much criticism of the Postal Service for losing money. And those at risk? Reuters/Brian Snyder. Narrator: Enter the Postal Accountability and Enhancement Act, which was passed by the Republican-controlled Congress and signed into law by President George W. Bush. “It’s a moment of crisis that brings us … Postal Service continued to bleed money during its second quarter, despite an increase in package revenues and an emergency price hike that took effect in January. Post Office Has Boom Year, Loses More Money Than Ever Craig Eyermann • Tuesday November 27, 2018 12:30 PM PST • For the U.S. government’s 2018 fiscal year, the U.S. President George Washington signed the Postal Service Act, which authorized Congress to create the US Postal Service. Get the latest coronavirus business & economic impact analysis from Business Insider Intelligence on how COVID-19 is affecting industries. As with many other industries, the coronavirus has taken its toll on the post office. There were all sorts of backlogs, and sorting-room floors were bursting with unsorted mail. The Post Office, like any organization, has faced its share of obstacles. Combined with a postal worker strike in March of 1970, led to the Postal Reorganization Act and established the United States Postal Service as we know it today. Fewer mail pieces means lower revenue ($1B) [5] Figure 2 tells the tale; between 2007 and 2012, the … Reuters. By the end of the decade, the semi-independent government agency's losses had reached a record $8.5 billion, forcing the Postal Service to consider seeking an increase in its $15 billion debt ceiling or face insolvency. It operated at a loss in the first couple years of the 21st century, but by 2003, it was back to operating at a profit. Narrator: In 1823, it started using waterways to deliver mail, then began using railroads. WASHINGTON, Aug 11 (Reuters) - The U.S. This was not regular mail, but certified with a return receipt and the shortage was on the certified fee. 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