Postal Service Business Plan to Profitability Requires Comprehensive Approach


April 11, 2012 



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The Postal Service has a comprehensive business plan that provides a clear path toward financial stability. To return to profitability, the Postal Service must continue to take actions that reduce costs and grow the business. The plan requires the reduction of annual costs by $22.5 billion by 2016. This cost reduction is necessary given projected declines in First-Class Mail volume, which has already dropped by 25 percent since 2006. However, the Postal Service can achieve only a portion of these reductions under current business model constraints; legislative changes are needed to achieve the full cost reductions and to provide the Postal Service with the flexibility needed to adjust more quickly to our customers’ changing mailing and shipping needs. 

The Postal Service continues to work with Congress to seek comprehensive legislation to reform and improve the Postal Service business model. To return to long-term financial stability and to avoid burdening the American taxpayer, the Postal Service requires an urgent legislative remedy this fiscal year. In the absence of legislative reform that quickly enables meaningful operational changes and cost reductions, the Postal Service could incur annual losses as great as $21.3 billion by 2016, and accumulate a total debt of $92 billion by 2016. The Postal Service will continue to lose $25 million per day until it is allowed to fully enact its proposed changes.

The Postal Service does not receive tax dollars for operating expenses; it relies entirely on the sale of postage, products and services to fund its operations. 

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A self-supporting government business, the U.S. Postal Service is the only delivery service that reaches every address in the nation, 151 million residences, businesses and Post Office Boxes. The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations. With nearly 32,000 retail locations and the most frequently visited website in the federal government, usps.com, the Postal Service has annual revenue of more than $65 billion and delivers nearly 40 percent of the world’s mail. If it were a private sector company, the U.S. Postal Service would rank 35th in the 2011 Fortune 500. In 2011, the U.S. Postal Service was ranked number one in overall service performance, out of the top 20 wealthiest nations in the world, Oxford Strategic Consulting. Black Enterprise and Hispanic Business magazines ranked the Postal Service as a leader in workforce diversity. The Postal Service has been named the Most Trusted Government Agency for six years and the sixth Most Trusted Business in the nation by the Ponemon Institute.

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