Postal Service Hits Gains Among Losses, Can Use Same-Day Delivery

The US Postal Service has had its’ share of challenges in the recent years. However, there are some positive signs in the midst of the heavy drought. This past Friday the agency reported a $740 million loss in the three months up to June 30. It is a large figure, yet it is far less than what it loss in 2012. The USPS reported an overwhelming $5.2 billion loss last year. What is being found is many customers are not using first-class mail like they use to. Many bills are being paid online and the increase in technology is creating more convenient ways to handle everyday business.

One of the issues fueling the fire is the Postal Service health care benefits for future retirees, which is a pre-fund requirement by the US Government. These are yearly payments. The USPS currently owes $5.6 billion to fund these health care costs. This is actually only half of what the agency owed last year, which is due to the company withholding its’ 2011 payment. This year’s payment is due September 30th and the Postal Service is expected to default again. It has also depleted its’ $15 billion taxpayer loan that was given to assist with its’ debt.

The USPS needs some relief. It has attempted again and again for Congress to release the yearly health care benefit requirement to stop the losses. The agency also is requesting to end Saturday delivery of letters. Postal Service CFO Joe Corbett stated in the report, "Without comprehensive postal reform legislation signed into law, our hands are tied and we expect multi-billion dollar annual losses to continue". Without the pre-fund healthcare benefits, the USPS would have generated a $660 million profit in the third quarter this year. Not only is this looming, but its’ workers’ compensation benefits are due in October, which can affect its’ ability to pay its’ operational bills.

The pursuit for reform is not the only strategy the US Postal Service is engaging in to make a comeback. It knows it will require innovation and stepping into new business waters to really thrive again. The agency has launched a new service to compete will the demand for faster and more convenient mail deliveries. It has launched Metro Post, which offers same-day delivery. It is currently being tested in San Francisco. Online business is rises annually at 17% and many companies are aware this is a avenue for growth also. This is a great step for the Postal Service, following the likes of companies such as Wal-Mart, eBay, Google, Macy’s, and others seeking how to meet online demand via same-day delivery.

The USPS does appear to be going in the right direction, especially when it comes to same-day delivery. This is the future of any type of delivery that involves small packages and envelopes that customer need on a daily basis. Same-day couriers such as A-1 Express is able to assist any customers with a same-day delivery solution and deliver fast. The Postal Service can partner with the Portland Courier and become more competitive with all its’ deliveries.

Reference: 8.9.13, CNN Money, Jennifer Liberto, Postal Service loses less, but cash crunch looms