My wife looked out the window on Sunday. “Hey, it’s a Postal Service truck,” she said. It was indeed. Our friends had already been visited on recent Sundays by their U.S. Postal Service letter carriers with armloads of Amazon.com (AMZN) packages. But this was the first time we’d spotted one in the wild.
The sighting came two days after the USPS released better-than-average financial results (PDF) for the fiscal year ended on Sept. 30. The agency transported 158 billion pieces of mail and made $66 billion in revenue. Yet it still lost $5 billion because of its legal obligation to pay $5.6 billion toward the health benefits of future retirees. If not for that, the USPS might have actually made money for a change.
Postal worker union leaders were quick to point this out. “The Postal Service is positioned for a strong comeback,” said Fredric Rolando, president of the National Association of Letter Carriers. He noted that the Amazon deal was part of this encouraging trend.
Perhaps a little perspective is in order. In 2008 the USPS made a record $74.9 million in revenue—and still lost $2.8 billion. Then the economy fell apart, and between 2008 and 2013 the USPS lost 22 percent of its mail volume. Now that the economy is recovering, the USPS’s finances are stabilizing. That’s not because customers are sending more mail, though. Last year, as people started buying more things on the Internet, the agency’s package volume rose by 210 million items—but the USPS’s total mail volume fell by 1.4 billion pieces. First-class mail fell by 2.8 billion pieces. That’s especially troubling because first-class mail is the Postal Service’s most profitable product.
The modest improvement in the agency’s numbers may have more to do with cost cutting. The USPS has done a good job of controlling expenses, reducing the number of its career employees by 26 percent since 2008 through buyouts and attrition. Eventually, the agency’s volume may flatten out. But that could take years. In the meantime, it will probably need to become even leaner to survive.
Rolando didn’t address this. But Mark Dimondstein, the newly elected president of the American Postal Workers Union, did in a statement on Friday. “Good union postal jobs are disappearing,” he lamented. Sunday deliveries for Amazon alone won’t bring them back.