Federal Manager's Daily Report

The Postal Service’s financial performance improved in 2014 but officials warn that long-term prospects remain difficult and they called again for fundamental reforms to be enacted by a Congress that has sat on similar ideas for a number of years.

The USPS posted a $5.5 billion net loss in the budget year ending September 30, a figure that includes a bookkeeping charge of $5.7 billion for a required payment to pre-fund retiree health insurance that the service was unable to make.

On the positive side, operating revenue was up by nearly $600 million to $67.8 billion and the increase would have been closer to $2 billion apart from a one-time change in accounting of 2013 income related to Forever stamps. Also, shipping and package services grew by 8 percent, or 300 million pieces. And cash on hand rose to the amount to cover 19 days of expenses, up from nine days.

However, a main drag on the agency continues to be erosion in its most profitable line of business, First Class mail, which fell by 2.2 billion pieces, around 6 percent. Officials said they see no end to that decline, and accompanied by inflation in general operating costs and wage increases built into union contracts means that the service effectively starts each budget year in the red.

While cost-saving steps such as closing facilities will continue, “We’re simply running out of game-changing efficiency measures,” one official said. “The problem is the low-hanging fruit is gone.”

A summary of the fiscal 2014 postal finances is here: http://about.usps.com/news/electronic-press-kits/cfo/media-call-141114.pdf