USPS lost $1.9 billion; UPS makes $1.5 billion. What’s wrong with this picture?

Through rain, sleet, snow, the mail is delivered and I am truly grateful for the men and women of the US Postal Service (USPS). However, I must admit to being alarmed at the fiscal management of the organization.

According to The Hill, “The USPS lost $1.9 billion over its most recent quarter, despite bringing in more revenue during that three-month span. The red ink means the cash-strapped agency has now lost money in 20 of the last 22 quarters. In all, the agency lost some $2.2 billion in the first six months of fiscal 2014, through March 31.”

This is the frustrating aspect of the federal government. It is an entity that demands more taxpayer resources, yet squanders the money, often with no explanation. Case in point — as we reported here — the $6 billion lost by the US State Department over the last five years, which cannot be explained. I think we all remember the strenuous machinations and alarm touted by the Obama administration over the “sequestration” cuts (which our lawmakers have somehow lifted), but in any event Armageddon never arrived.

As The Hill reported, postal officials again cited the losses to press lawmakers to enact a comprehensive overhaul of the agency, which has now lost more than $23 billion over the last two and a half years. In its statement, the USPS said that first-class mail volume dropped roughly four percent in 2014’s second quarter, a continuing result of the rise in electronic communication. The agency added that it would not be able to pay a scheduled $5.7 billion payment for future retirees’ healthcare due in September, the fourth such bill it would default on in recent years.

Can any of you imagine what would happen in the private sector if a business lost $23 billion in two and a half years? I think the Board of Directors would have made some changes in leadership immediately. And what about innovation? Instead of complaining about the rise of electronic communications, where is the visionary leadership in the USPS?

Private-sector companies seem to be able to figure that out. In the first quarter of this year, the operating profit for UPS (the folks in brown) was up $1.5 billion and the company generated $1.9 billion in cash flow. In a nutshell, UPS earned what the USPS lost.

And this is what angers American taxpayers. Accountability and responsibility is demanded in the private sector, but seems optional in the federal government.

However, Joseph Corbett, chief financial officer of the USPS is speaking up. “We haven’t been making the retiree health benefit prefunding payments because we can’t, he said in a statement, “If legislation reduced the required retiree health benefit prefunding payment, it doesn’t provide us with any more cash to pay down our debt or put much needed capital into our business. Only comprehensive postal legislation that includes a smarter delivery schedule, greater control over our personnel and benefit costs, and more flexibility in pricing and products will provide the necessary cash flows.”

Which sounds like prudent market-based solutions to me. What are your recommendations for improving the solvency of the USPS? And more than that, what are your recommendations for ending wasteful government spending and massive losses?

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45 Comments on "USPS lost $1.9 billion; UPS makes $1.5 billion. What’s wrong with this picture?"

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This is lies and lies perpetuated by serial liar named Allen B. the douchebag West. During his short lived as politician, he voted against anything that will help out USPS and voted to increase subsidize money for UPS and FedEx.

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Guest

UPS and FedEx practically begged USPS to help them out to deliver Christmas presents and while they has done that, USPS has done everything on their own effective and smoother with ZERO complaints of breaking glasses and stuffs while complaints filed against UPS and FedEx soared. Allen West, as always, being negligent of the facts and always spew out his own revisioned history of bullshots.

When will you finally go away, Allen West?

Eric Domejean
Guest

As someone who ships daily, I can tell you that the USPS does a better job than either UPS of Fedex.

Chief
Guest

USPS does a good job as does FedEx. Out of 1000 packages sent, I have had less than1% of them damaged or lost. UPS on the other hand…….. Charges way to much for their ??SERVICE??.

pearl87
Guest

I don’t know about shipping, but 1st class mail is a disgrace. An anyway, aren’t they outsourcing their package deliveries through Fedex?

Chief
Guest

You have that wrong, FedEx has partnered with USPS to deliver its (FedEx’s) small packages so the can drop the residential surcharge. Check it out.

Aaron Raymond
Guest

All of those companies use each other services.

William Torpey
Guest

Actually, UPS and FedEx save money by having the USPS do the final delivery on many small packages to homes.
On packages that you have sent to your home that you thought were coming UPS or FedEx, go online and check the tracking numbers. You will find that they will go most of the way by their truck, then be diverted to a USPS Mail Processing Plant in the nearest large city, before going the rest of the way as US Mail.

Eric Domejean
Guest

How is it a disgrace, 49 cents get a letter delivered anywhere in the US and protectorates with in 2 to 5 days. Sometimes 1 day. As for the outsourcing be specific. The global express mail is handled by FEDex, Smart/sure/dhl/post is a partnership between the shipping companies to use the cheapest transport methods of each.

Chief
Guest

I think Pearl should start a mail delivery service and see if it can deliver a 1st Class letter across the country for $ .49. Put your money where your mouth is Pearl

Phil Mullinax
Guest

ZERO complaints? Wow, you obviously have no clue of what you are talking about. Haters gonna hate.

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Guest

Zero. Just googled the Christmas 2013, none has complained about USPS.

Kesshin Hakari
Guest

cite your sources on the fedex and ups requests. from the looks of things you have it all backwards.

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Unlike Allen West and his gullible followers, I never got anything backwards. I don’t regress like you.

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It’s all over the news, even Fox News mentioned it for few hours.

Lucy Ball
Guest

Spew you BS elsewhere.

Ed Medlin
Guest

The USPS is required by their unions to pay medical and retirement benefits 75 years in advance. In other words, they are paying benefits for employees that have not been born yet. What private company is required to do that? That costs the Postal Service billions of dollars. If they could get out from under that burden, they could be much better off. This is something I rarely hear mentioned. What is wrong with them only paying ahead for 20-25 years. That would keep pensions safe and the USPS much more solvent.

William Torpey
Guest
Those 75 years of benefits are required by law (Congress). Congress saw a “cash cow” and decided to milk it. First, they came up with a calculation to determine how much the USPS would pay each year. But after they had been paying into this fund for ten years, the GAO determined the calculation was wrong, and the USPS had already paid in more than enough money to cover the 75 years worth of benefits. So was the Postal Service allowed to stop paying? Of course not. Only Congress can change the amount of money that the Postal Service has… Read more »
Bob Young
Guest

The USPS receives no tax support, but is controlled by a greedy legislature who wants them to act privatized, but won’t let them do what they need to do. They would do as well as UPS if we could get the Washington idiots to let go. Oh – and that 75 year advance retirement is a big bunch of union hooey.

Ed Medlin
Guest

Yes… But that fund is sitting there with 75 years of prepaid retirement in it for who knows how many workers…

Eric Domejean
Guest

UPS is not controlled by congress nor does it have a criminal like Rep Issa forcing them to over fund the pension, probably because he want to sell it off and steal the pension for his retirement.

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Looks like $200 million isn’t enough for Issa, he wants more. Before his introduction to political arena, he wasn’t even a millionaire. I can guarantee you that Allen west would attempt to benefit more money than his Representative salary by tweaking the stocks to his favor like Boehner, Pelosi, Kerry, Cantor, Issa, and others.

technoreaper
Guest

Mr. West, have you ever worked for a private company? They’re not perfect. When you experience the cost-cutting greed that destroys a company and their product, you can get back to me. USPS has a lot of government bureaucracy meddling with it and their revenues. They also pay people a living wage, unlike much of UPS. USPS provides middle class jobs that help this country thrive. Without them, we’re done. Get real.

pearl87
Guest

Your “middle class” mail carriers look like a bunch of escaped convicts. Half the time they’re not in uniform and ALL the time, they fail to perform up to any standard. My mail never arrives before 3:30 and sometimes after 5:00 pm. I don’t know anyone who has mail delivery before afternoon. Why is that? What are they doing all morning?

Aaron Raymond
Guest

I don’t remember seeing anything about when my mail is suppose to be delivered. I bet most of the carries are ex military and I’m sure they have a higher IQ than you as well.

taxpayer9999
Guest

Someone has to pull your mail from trucks, sort it to the routes, then to the adress, then load it up, and THEN deliver it pearl each morning. The mail does not arrive magically all ready to go. You really have no idea how all of this works do you? These people do work hard to get your mail out and if you deklivered to 850 + homes after sorting it all from the truck then having to be back by a set time or get disciplined you might make a mistake once in a while.

Eric Domejean
Guest

It is not a guaranteed service, if you want that pony up $19.00 to UPS

technoreaper
Guest

Ever thought that maybe they’re loading and delivering mail to businesses and other large customers before the residential areas, genius? UPS does the same thing.

pearl87
Guest
The USPS is composed of illiterate, lazy, incompetents. I have days at a time when I receive no mail, then I get a giant bundle. This can’t be a coincidence since it happens on a regular basis. I also get mail delivered that belongs to my neighbors all the time. But the ultimate insult was when I received a request to but canned goods out for the mail carrier to pick up on 5/10. REALLY?!! How is that any part of mail delivery? They should do their job and not try to do two things poorly, instead of just one.… Read more »
taxpayer9999
Guest
Maybe you need to get a job and you might realize that people can make mistakes while working. The food drive was for the needy in the community, Your mail can and will only be delivered to you when it arrives at the local post office and the carriers are required to take out ALL 1st class mail on the day it arrives. Junk mail has a deliver by date so it can be delayed a day or two. My wife delivers mail and she is neither lazy, illiterate or incompetent. Before she was told not to do it she… Read more »
beechnut69
Guest
My spouse works for the postal service …it is a very hard job and there is undue pressure put on employees from the higher up management. In our local PO’s all the stamp machines were removed. Which results in lost of $$ and longer wait lines. The pick up of the mail from the post office is very poorly managed with many totally unnecessary pick ups – which cost money and time. The problem is not with the carriers – it’s with the higher up management, who continue to make terrible decisions on how to gain $$ and run the… Read more »
Paul Boulanger
Guest

Say I have an idea; lets have Congress take billions from UPS to spend on their congressional pet projects (but they promise to pay it back in retirement benefits for the employees later on). Sound unfair? That’s what they are doing to the Postal Service. Shame on you Allen West for spinning the party line instead of doing honest research.

Absomazing!!!
Guest
As a person that sends out many first class mail packages, it is absomazing how well and how bad this entity works. They may have lost out on most small letters but the small package business is booming. However, the way that they handle this is what is messing them up. If UPS or FEDEX could come up with a low cost alternative to First Class shipping… I would be in big time. USPS can lose a package with tracking number… USPS can have a package loop in and out of a sorting facility for days on end… USPS can… Read more »
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Guest

I never have any issues with first class package with USPS. But I already experience increasing numerous of failed deliveries by UPS, FedEx, and DHL in past year and my business are suffering because of that.

Absomazing!!!
Guest
Not sure where you are located, but South Florida is having some problems. Let me say that when USPS is hot, they are hot… packages flow like no tomorrow… I have had packages go across the country in 2-3 days… amazing! But… packages sitting in one sort location for days… Sorry… can’t buy that. Bulk of all our orders go out USPS First Class because the price point of the product does not support any other shipping method… it is cost-prohibitive! Business does suffer because the customer does not blame those responsible for delivering the package only the business that… Read more »
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Allen West is mad because he can’t do insider trading anymore like Issa, Pelosi, Boehner, Kerry, Cantor, Ryan, Cruz and others are doing right now.

gregmurphy
Guest
The USPS is not funded by tax payer dollars. It is supposed to be ran like a private sector company such as Fedex or UPS. However, the biggest difference is that the government still has a hand in how the USPS does business. If the government would stop mandating the post office on everything they do then as a company it would be ahead. In fact a message by the Postmaster General Patrick Donahoe sent to all postal facilities says that the changes they are making will generate the Post Office 500 million in revenue per year. This article is… Read more »
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Guest

Allen B. West, congratulations, you literally got plenty of hopelessly ineptitude followers believing into anything you say to them.

Don’t worry, this is my first time I’ve been here today and its going to be my last one ever. Ever sine I read a lot of rumors about your pathetic website, I couldn’t help it but being curious about it. Wow. Just wow. Your slogan of Steadfast and Loyal are so full of it.

Any commenters here who are dying to incite the response to my comment, don’t bother, I’m not going to read any of it.

Chris Riley
Guest

Get rid of the union in the post office and we can actually make money.

DeadMessenger
Guest
Agreed. Furthermore, UPS has the slowest and most inaccurate shipping in the history of shipping. And they are by far the most liable to damage your package. For example, I live in FL and frequently order hobby supplies online. If I order two similarly sized items that ship from the same city, paying the same amount for shipping, and one ships USPS first class, and one ships UPS ground, I get the USPS package in three days. I get the UPS package in two weeks if I’m lucky, but usually closer to three. Let’s just say that “brown” is an… Read more »
MotherBatherick
Guest

It’s sad. UPS use to run a tight ship but nowadays, very disappointing.

ligersaurus
Guest

You must be unique. I regularly order merchandise on-line (we live in a remote rural area) and in almost every case, the item(s) arrive by UPS or FEDEX in 2-3 days, as opposed to the letter announcing that my order has shipped coming in the mail a week after the actual items arrive.

MotherBatherick
Guest

Another govt agency, the VA, not only loses money but people’s lives…Shinseki should resign.

debw777
Guest
They don’t believe we are their customers anymore. Our rural delivery person refuses to deliver packages. I’ve ordered four things that were mailed to me in the last couple of months and I only got one of them because I saw her and walked down to the mail box. Even then, she was rude to me and I had to ask twice before she acknowledged that she had a package. I think she’s just too lazy to drive up to the house, get out of the truck and leave the package on the porch like she’s supposed to. When I… Read more »
Craig1748
Guest

My Dad retired from the Post Office with 42 years of service (including 3 years during WW11 in the Army postal service) and his father, my grandfather has I believe 36 years of postal service retiring in the 1930’s sometime. I can say for sure that they are turning in their graves at the mess their Post Office has become!!!