USPS Takes In More Revenue, Needs To Spend More On Workers And Vehicles

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Here’s the problem that the U.S. Postal Service has with making money: it’s delivering more packages to quench our thirst for online shopping, but carrying more packages means that the service needs more and upgraded vehicles, and to pay more people to deliver those packages. If the USPS simply reported its profit and loss, it would have had a $200 million profit for fiscal year 2016, but things are not that simple when you’re a quasi-governmental agency.

The postal service has depended on first-class mail revenue for centuries, and now that people are receiving their bills, important documents, and love letters electronically. Packages have made up some of the difference, even handling things like only “last-mile” services for large e-commerce companies like Amazon. First-class revenue fell $925 million in fiscal year 2016, and package revenue increased $2.4 billion.

The USPS remains in fiscal crisis because it’s required to pre-fund retirement and health care benefits for its employees, which cost the service $5.8 billion in fiscal year 2016. The workers who handle additional packages for the holiday season and Sunday deliveries are cheaper, “non-career” employees who don’t need their retirement benefits funded.

Despite bright spots, financial issues remain at the forefront for USPS [Logistics Management]

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