Latest News and Highlights
PRC Releases Financial Analysis Report. On Friday, March 31, the PRC released its Financial Analysis Report which analyzes the USPS's financial position in FY 2016. In FY 2016, the Postal Service generated its third consecutive year of Operating Income despite an increase in operating expenses and the expiration of the exigent surcharge in April 2016. When all adjustments are included, the net operating income of $0.6 billion becomes a total net loss of $5.6 billion, a deterioration of $0.5 billion compared to FY 2015. The increase in the total net loss is largely driven by a $1.5 billion increase in overall compensation and benefits costs and an increase in non-cash workers’ compensation expense of $0.9 billion caused by a decrease in the discount rate.
PRC Issues Annual Compliance Determination. On Tuesday March 28, the PRC issued its Annual Compliance Determination (ACD), thus closing docket ACR2016. In its report, the PRC found the Postal Service to be out of compliance on a number of issues including some presort discounts, market dominant and competitive product cost coverages. The Commission also expressed disappointment with the Postal Service’s continuing failure to meet its service targets, and with the number of postal facilities under suspension. The PRC has once again decided to report separately on the Postal Service’s financial condition and on its performance plans and program performance. It will issue both its financial analysis and its analysis of the performance plans and program performance in the second quarter of 2017.
Leaders in Mailing Organizations Call for Balanced Approach to Postal Rates. On Monday, March 20, three mailer organizations representing all segments of the mailing community and all classes of mail urged the Postal Regulatory Commission to retain the inflation-capped pricing structure that has protected captive users of the Postal Service’s monopoly services for the past decade. The Alliance of Nonprofit Mailers (ANM), MPA -- the Association of Magazine Media (MPA), and The Association for Postal Commerce (PostCom) together submitted comprehensive comments showing how the current pricing regime has simultaneously given the Postal Service adequate revenues while protecting mailers who have no alternative to USPS for delivery of their valued mail to the nation’s homes and mailboxes. The comments demonstrate clearly that the financial outlook for USPS is far healthier than it portrays. The three organizations also outlined untapped management opportunities to improve Postal Service finances without abandoning the price cap and threatening mail volumes. Press Release. Executive Summary. Comments.
House Panel Approves Postal Service Legislation. On March 16, 2017, the House Oversight and Government Reform Committee approved H.R. 756, the Postal Service Reform Act of 2017. The bill addresses unfunded liabilities of the US Postal Service (USPS), strives to enhance and improve the Postal Service's revenue and efficiency, makes reforms to keep mailing costs affordable for consumers and mailers, and encourages innovation, all without additional borrowing capacity from the U.S. taxpayer. Additionally, the Committee approved the Postal Service Financial Improvement Act, H.R. 760, which allows Postal Service Retiree Health Benefits Fund to utilize the same index funds and strategies as the Thrift Savings Plan. Summary of the Bill.
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