USPS says financial problems are caused by legal obligations

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The United States Postal Service (USPS) has reported its financial results for the three months to the end of June. The results are improving but not strong. USPS has been under fire from President Trump for losses which he considers to be subsidies for big companies making profits on the back of parcel tariffs that need to be increased.

The national US postal carrier reported total revenue of $17.1 billion for the third quarter of 2018 (to the end of June 2018), an increase of $402 million, or 2.4%, compared to the same quarter last year.

First-Class Mail revenue declined by $134 million, or 2.2%, and Marketing Mail revenue increased by $63 million, or 1.6%. Total mail volume declined by a combined 397 million pieces, or 1.2%, compared to the same quarter last year. Shipping and Packages revenue increased by $475 million and on volume growth of 102 million pieces. This is a familiar pattern for national postal services all over the world. All told, the net loss for the quarter increased by $507 million. The Postmaster General explained why:

The root cause of our financial instability is a flawed business model that is imposed by law. We encourage the Congress to engage in a broad public policy discussion and pass postal reform legislation. We support legislation under consideration in the current Congress which would provide immediate flexibility to the organization, allow the Postal Service to invest in our future and continue to provide the prompt, reliable, efficient and universal service the public expects.
– Megan J. Brennan, USPS Postmaster General and CEO

Interestingly, the position of Postmaster General, and the establishment of a post service for the United States, are mentioned in the constitution and that’s why Congress is the arbiter of its legal obligations, in a rather similar way to Royal Mail. President Trump has ordered a review of USPS’s financial performance under Executive Order that is expected to be published soon and could be the start of big changes. USPS has been keen to point out in the past that some of the President’s claims are not accurate.



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