A few commentators have recently called for reducing the services the U.S. Postal Service offers the public, or even for privatizing the agency. To make their case, they paint a misleading picture of Postal Service finances while ignoring the broader value the USPS provides to our society.
So I appreciate the chance to provide some facts and perspective about this American treasure, which is based in the Constitution and is as relevant today as ever – as evidenced by the average of 3,630 new household, business or organization addresses added daily to the postal delivery network.
Overall, the Postal Service delivers to 155 million residences and businesses six and increasingly seven days a week, providing them with the industrial world’s most affordable delivery network.
Consistently rated the public’s most trusted federal agency, the USPS is particularly critical to small towns and rural areas as well as to small businesses. It is also the nation’s largest civilian employer of military veterans.
These are just some of the reasons why the Postal Service enjoys enthusiastic support from the public and from lawmakers across the political spectrum, including many conservatives and Republicans.
Regarding its finances, the Postal Service is operating in the black – despite what you may have heard. USPS revenue exceeded operating expenses by $610 million in Fiscal Year 2016, bringing its total operating profit the past three years to $3.2 billion. Bear in mind that this is earned revenue; by law USPS gets no tax dollars. It earns its money by selling stamps and other products and services.
Two structural factors account for this impressive performance: As the economy gradually improves from the worst recession in 80 years, letter revenue is stabilizing. And as the Internet drives online shopping, package revenue is rising sharply (up 16 percent in 2016), auguring well for the future. Record worker productivity also contributes.
Critics like to depict a harshly competitive delivery environment, but significant public-private cooperation actually exists. For example, UPS and FedEx bring an increasing portion of their parcels – millions a year – to the post office for “last-mile” delivery. The private carriers go to perhaps every 50th address while letter carriers go to every address anyway, so UPS and FedEx – and their customers – save money while USPS earns revenue.
There is red ink but it stems not from the mail, but rather from congressional politics. In 2006, a lame-duck Congress mandated that the Postal Service pre-fund future retiree health benefits. No other agency or company has to pre-fund these benefits even one year in advance; USPS must do so decades into the future. That $5.8 billion annual charge not only accounts for the “red ink” — it disguises the actual profits postal operations have been generating for years. (It’s important to note that the pre-funding charge goes on the books each year as a loss, whether or not USPS can afford to pay it.)
Addressing this elephant in the room — pre-funding — is imperative, given the Postal Service’s role in various facets of American society. I’ll cite just a few.
The post office is, in many places, the center of civic life. And across the country, it’s the centerpiece of the $1.3 trillion national mailing industry, which employs 7 million Americans in the private sector.
In every community they serve, letter carriers contribute to the quality of life. For example, each May letter carriers conduct the country’s largest single-day food drive to replenish food banks, pantries and shelters from coast to coast. Thanks to the generosity of Americans, the 24th annual drive last May collected a record 80 million pounds of food.
And every day as they deliver mail on their routes, letter carriers help save elderly residents who have fallen or experienced medical problems, put out fires, locate missing children or stop crimes in progress. For the one-quarter of letter carriers wearing their second uniform following military service, ignoring personal danger to save others is in their DNA; for letter carriers in general, the job involves a commitment to serve and protect the neighborhoods and families on their routes.
If members of Congress act on practical, targeted postal reform that addresses pre-funding while preserving and strengthening the invaluable and profitable postal networks – a consensus supported by a broad coalition of postal management and labor, industry groups and key legislators – the Postal Service can continue to provide Americans and their businesses with the level of service they rely on and deserve.
Fredric Rolando is president of the National Association of Letter Carriers.
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