Postal Service

Why the USPS Lags the Rest


Other countries' postal systems are in better financial shape than the U.S. Postal Service because they can offer services beyond mail and package delivery, and their governments cover some employee health-care costs and most retiree costs. In the U.S., the Postal Service is expected to be self-sufficient, yet its ability to run itself like a business is restricted.

U.S.

The U.S. Postal Service is an independent federal agency that is expected to make a profit.

Services: It's allowed to offer only limited non-mail services, including packaging, money orders, and greeting cards.

Performance: In the fiscal year ended Sept. 30, it showed an $8.5 billion loss on $67 billion in revenue. The service may need a bailout because it has borrowed $12 billion and can borrow only $3 billion more. This year losses are expected to exceed that. It has a $50 billion obligation to its retiree health fund and is in a dispute with Congress over who should pay that.

Britain

The Royal Mail is fully owned by the British government, which plans to privatize it.

Services: Provides banking and insurance services along with mail delivery and shipping.

Performance: Restructuring and pension interest costs pushed the Royal Mail to a $512 million loss on sales of $14.9 billion for the fiscal year ending March 2010. It has a $12.6 billion unfunded pension obligation but does not have to pay for retirees' health care.

Japan

Japan Post Holdings is fully owned by the government.

Services: Beyond postal services, it offers banking and insurance products and package delivery.

Performance: Reported $227 billion in sales and $5.4 billion in net income for the fiscal year ending March 2010. Its banking unit holds about $2.1 trillion in savings accounts. The government covers health insurance and pensions.

Germany

Deutsche Post is fully privatized and trades on the stock market.

Services: It mostly delivers mail and also owns DHL, a global express shipping company.

Performance: Had revenue of $64.4 billion and net income of $898 million in 2009. But the sale of Postbank, its banking unit, to Deutsche Bank contributed $842 million toward the net, a one-time gain. Many retirees are former civil servants, so the government pays most of their pensions. With fewer civil servants now, the company’'s share of pension costs is growing, but it does not have to pay for retirees’ health care.

France

La Poste is fully owned by the French government.

Services: Offers financial services, which generate profits that offset losses on mail service.

Performance: Revenue in 2009 was $21.6 billion; net income was $740 million. In 2006 the government agreed to take over $94 billion in pension obligations to about half of those La Poste employees who are civil servants, in exchange for a $2.7 billion payment by La Poste. Last year, La Poste spent about $2.5 billion on pensions. It does not have to pay for retirees' health coverage.

Matlack is a Paris correspondent for Bloomberg Businessweek.

Silicon Valley State of Mind
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus