• Sprott Money
    05/05/2016 - 06:02
    Why is a Deutsche Bank mouthpiece suggesting “negative retail deposit rates or perhaps wealth taxes”? The answer is to (supposedly) stimulate our economies.

US Postal Service Loses $1.9 Billion; Needs $10 Billion Bailout Or Pensions Get It

Tyler Durden's picture




 

Revenues are up modestly for the US Postal Service as First-class Mail volumes continue to tumble "extremely" but package volumes are rising; however, USPS records a $1.9 billion loss in the last quarter, despite efforts to streamline efficiency and cut costs. The rise in package volumes appears related to a "Sunday delivery" deal with Amazon.com who "found a great fit with USPS' capability and desire." However, USPS says it needs $10 billion for deferred investments (i.e. Capex) and warns if it does not get its bailout:

  • *USPS SEES UNABLE TO MAKE $5.7B RETIREE PAYMENT W/OUT REFORM

Given USPS says no new employees have been hired and flexible scheduling used for Sunday delivery, we wondered who exactly is benefiting from the taxpayer funded desperation of the USPS to do anything for even loss-making revenues?

 

USPS is set to deliver Amazon packages on a Sunday...

Starting this week, the postal service will bring Amazon packages on Sundays to shoppers' doors in the Los Angeles and New York metropolitan areas at no extra charge. Next year, it plans to roll out year-round Sunday delivery to Dallas, New Orleans, Phoenix and other cities.

 

...

 

To pull off Sunday delivery for Amazon, the postal service plans to use its flexible scheduling of employees, Brennan said. It doesn't plan to add employees, she said.

 

But the postal service partnership is the first time Clark knows of that "Amazon or really anybody else has done broad-scale Sunday delivery."

 

"It's going to be hard for others to replicate," he said.

 

Clark said the postal service "just happened to be a great fit" where "capability and desire matched."

It's going to be hard to compete because Amazon is "using" a taxpayer-subsidized and desperate for any revenue business is put up against private companies like UPS or FedEx...

Especially when the results are so bad...

 

  • *USPS RECORDS SECOND QUARTER LOSS OF $1.9 BILLION
  • *USPS: APPROXIMATELY $64B IN LIABILITIES EXCEED ASSETS BY $42B
  • *USPS HAS NEED FOR OVER $10B FOR DEFERRED INVESTMENTS
  • *USPS SEES UNABLE TO MAKE $5.7B RETIREE PAYMENT W/OUT REFORM

"The Postal Service is working diligently to improve its finances by streamlining our network to improve efficiency, reduce operating costs and increase revenue, which was up $379 million over the same period last year — the third straight quarter of revenue increase," said Postmaster General and Chief Executive Officer Patrick Donahoe.

"Despite aggressive cost-cutting actions, however, we will still incur annual inflationary cost increases of approximately $1.2 billion each year, and First-Class Mail volume continues to decline," added Donahoe.

...

"We haven't been making the retiree health benefit prefunding payments because we can't," added Corbett. "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."

In other words - if we don't get our bailout - the pensions get it (but in the meantime, Amazon can abuse us for the cheapest taxpayer-subsidized delivery in the 'not free' market).

0
Your rating: None
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 05/09/2014 - 10:51 | 4743311 Kaiser Sousa
Kaiser Sousa's picture

i knew i should have Fed EX'ed that last Silver order.

Fri, 05/09/2014 - 10:54 | 4743332 nope-1004
nope-1004's picture

Postal today has morphed into the flyer delivery service of the 70's.  It delivers junk mail today and that's it.  PC banking and email has killed this dinosaur.  Time to put it into extinction.

 

Fri, 05/09/2014 - 10:54 | 4743337 lordylord
lordylord's picture

But they have money to buy hollow points?

Fri, 05/09/2014 - 10:59 | 4743357 SafelyGraze
SafelyGraze's picture

the pensions might all be gone, but at least they paid for the cars, houses, vacations, wars, medical care, and pills that maw-maw and paw-paw enjoyed so much in the 60s and 70s and 80s

 

Fri, 05/09/2014 - 11:01 | 4743369 pods
pods's picture

Well they certainly aren't spending money on putting a muffler on the mail truck in my 'hood.

pods

Fri, 05/09/2014 - 11:09 | 4743391 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

If the USPS would audit package weights coming from China and stop the mail fraud, it may find an extra billion every quarter. But alas... that's not part of the agenda.

Fri, 05/09/2014 - 11:21 | 4743452 Headbanger
Headbanger's picture

But the Russian Post seems to be getting along just fine!

http://www.russianpost.ru/RP/INDEX/RU/Home

Maybe we could out source our mail to them soon.

Gee, I wonder if they order hollow points or save lots of money using up 7.62x25 and 7.62x39 millsurplus ??

Fri, 05/09/2014 - 11:34 | 4743529 StacksOnStacks
StacksOnStacks's picture

USPS sucks! I've had mail in-city take 3 weeks! I had certified mail sent to me and it finally arrived after 5 weeks!!! Fucking amazing! Shut this fucker down!!!

Fri, 05/09/2014 - 11:46 | 4743587 ParkAveFlasher
ParkAveFlasher's picture

Does this mean my Forever Stamps investment gambit may not pan out?

Fri, 05/09/2014 - 12:17 | 4743689 Handful of Dust
Handful of Dust's picture

However........................at least they are working for their dough. So yes, they want a Bailout so give them a Bailout.

I ax you, How much has Greenspan, Shalome and Yeller handed to Wall Street and corrupt politicans?

 

[However, I will agree with anyone who says a lazy or incompetent employee should be able to be fired. Too bad that seems to only apply to the private sector.]

Fri, 05/09/2014 - 12:34 | 4743752 Save_America1st
Save_America1st's picture

I've asked my local postal carrier spy several times to stop stuffing my mailbox with junk mail and they refuse ever fucking time. 

So one day she asked me why I never pick up my mail because my box is always so full (it was my monthly visit to the junk mail box and she was there stuffing all the others with garbage).  She asked me if I traveled a lot.  As if that's any of her fucking business, right???? 

So I told her it's because I rarely get any regular mail anymore and that all there every is is junk mail.  This was as I was emptying the box and throwing it all straight into the large garbage that can we have next to the mailboxes.

She actually got offended and indignant with me and tried to correct me that it wasn't called "junk" mail.  She said if I didn't start to pick up my mail more regularly that they would....get this....it's funny....she said they would "stop delivering my mail to me."!!!  LOL

I laughed at her and said, "That's exactly what I've been asking you to do for years and you refuse to NOT deliver all this garbage to me!"  "But if I stop picking it up then you're going to threaten to "punish" me by not delivering this garbage to me????"

I laughed more and said have a nice day...she wasn't very amused at all and so I'm sure I've been marked down for FEMA Camp relocation due to this interaction with a government slug.

Only government fuck-tard assholes think this way...I fucking tell you.  All they're there to do is scam off the tax payers and most likely spy on what we recieve or order while lazily delivering garbage that 99% of the people don't want. 

Fri, 05/09/2014 - 14:44 | 4744334 Cathartes Aura
Cathartes Aura's picture

a war-vet junk-mail-delivery-worker has this comment for ya,

Cutting off junk mail would only serve to increase unemployment in our country. If bound printed matter could have a Made in the USA designation I would assume (I have to guess) over 90% of the junk you recieve in the mail could be considered made in the USA and likely made in the community in which you live.

Nobody is going to agure that they like junk mail, and by the way I dont like to deliver it anymore than you like to receive it. Sure doing away with it would make alot of people happy no more junk mail ya. But on the other hand, no more Americans jobs creating, designing, printing, delivering or recycling those items nobody really wants.

How hard is it to deal with anyway, you check your mailbox, sort though the things you want, throw what you really dont want into a recycle bin. It take me around 10 seconds of my day or less to accomplish something that keeps so many Americans employeed. Isnt keeping Americans employeed something that we should all be concered about, or should we just stop supporting the jobs we have here now, and hope that some other manufacturer brings jobs back home. Or are we as Americans becoming so selfish and lazy that we just dont want to be bothered even if it means putting other Americans out of work.

It is our Postal Service, I think its about time we support jobs in our country instead of letting every single job we still have here slowly slip away just so we wont have to spend a few seconds of a day recycling mail we didnt really want.

 

can't win fer losing, eh.

Fri, 05/09/2014 - 18:58 | 4745072 Save_America1st
Save_America1st's picture

an outdated, archaic mail service that only exists to deploy tons of worthless paper trash is not a valid argument in keeping anybody employed.  I'd like to be paid triple what I make now but it's not going to happen by arguing "becuz obama" or any other lame excuse.  I have to be worth justifying tripling my salary.  At least I can admit that I'm not worth that much more money. 

A postal service that does nothing but cost the tax payers countless hundreds of billions of dollars while constantly forcing people to pay more and more for a now almost completely obsolete service is nothing more than the definition of a crony, fascist system. A company in bed with the government to act as a monopoly over the people.

We can email rather than use "snail" mail.  We can scan documents without even needing a phone line to send them via fax machine.  Are we supposed to continue paying for out-dated analog copper phone lines and modems just to keep faxing paperwork so that the telecom companies can keep making money off us for that out-dated service?

Anything that needs to officially be sent regular mail these days can easily be trimmed back to 1 day a week...okay, maybe 2 days tops.  Lets say on Mondays and Fridays or something like that...but nobody, not even you and your excuses, can justify the postal service going on like it does now.

By your logic the postal service is basically a "broken window theory" scam operation.  Some guy owns a window repair service so he goes out at night and smashes everyones windows in order to produce business for himself.  No harm, right?  Nobody gets hurt, right?  Only broken windows and that keeps the window repair business in business. LOL

The government does not exist to provide useless employment for people who live off tax payers and who will VOTE for those in government who will give them BIG FAT UNSUSTAINABLE PENSIONS and an easy job screwing around all day cramming garbage into little boxes. 

You have to remember that the job I'm supposed to feel guilty for trying to eliminate, by way of your reasoning, does not produce anything.  Yet it takes 10's of billions of dollars out of the tax payers pockets each year.  That's detrimental to the economy.  Those taxes and the many others we have to pay to this criminal mafia actually serve to eliminate other jobs that would actually be productive in America.

So don't give any of us on here any crap about providing jobs for anybody via our taxes as if we owe it to anybody.  Nobody, especially the government owes anybody else a job.  I don't see that written anywhere in the Constitution or the Bill of Rights.

We earn a living and what is involuntarily STOLEN from our paychecks is REDISTRIBUTED to others who aren't producing in order to buy their votes and domesticate them under the umbrella of this sick and twisted government.

You call that winning?  I call that losing.

The obvious sinking state of our economy and our country are proof enough of what happens when we let shit like this go on unchecked.

Sat, 05/10/2014 - 11:42 | 4746074 Stuck on Zero
Stuck on Zero's picture

Please don't tell me that the postal retirement system is invested in government T-notes. 

 

Fri, 05/09/2014 - 11:00 | 4743361 Divided States ...
Divided States of America's picture

Thats why Amazon need drones to do the work in the future...

Fri, 05/09/2014 - 12:35 | 4743764 Save_America1st
Save_America1st's picture

need drones to shoot the tires out of the mail trucks! lol

Fri, 05/09/2014 - 11:02 | 4743374 NoDebt
NoDebt's picture

US Postal Service- by any other name, still a government "works program".  And, shockingly, in financial trouble with their over-promised pension obligations.  Nobody could have seen this coming.

Fri, 05/09/2014 - 11:27 | 4743487 toady
toady's picture

My uncle is retiring after 40 years at the post office. I don't have the heart to tell him he won't get that pension after a few years. The post office pension fund is one of the more solvent ones though... They're obligated to fully fund by law. Paid in 5B+ quarterly for a while now. The vampire squid is going to FEAST when they get their tenticles on that one! 

Fri, 05/09/2014 - 11:55 | 4743630 dontgoforit
dontgoforit's picture

I find it hard to see a way that most pension funds won't wind up insolvent.

Fri, 05/09/2014 - 12:01 | 4743645 thedrickster
thedrickster's picture

Faster breeding imports improving the demographic picture and paying into the system, culture/social dislocation/nation-state be damned.

The European bandaid being applied to Amerika.

Fri, 05/09/2014 - 12:03 | 4743628 thedrickster
thedrickster's picture

Right, so just stop the cherade of a going concern and treat it like any other stimulus/transfer payment.

Jobs for the otherwise unemployable, not 100% of course but to a large degree. Put it under a cabinet department and let it contribute to the problem. This faux private enteprise thing is insane, only benefitting the USPS personnel who don't have to at least operate with even the very mediocre oversight of other "essential services".

Another thing, in principal, no government employee should be permitted to collectively bargain at any level. Collective bargaining is a zero sum game where the objective is to extract the maximum amount of resources from the tax payers who don't in actuality have a seat at the negotiating table. Politicans and their fucked up time preference/incentives DO NOT represent taxpayers in these negotiations, see Chicago/IL for empirical evidence to this effect.

Fri, 05/09/2014 - 14:40 | 4744321 Cathartes Aura
Cathartes Aura's picture
The Postal Service employs more Veterans than any other civilian employer

By using the 10 points in Veterans Preference when I was hired 6 years ago, the Post Master that hired me was FORCED to hire me. Based off of the hiring rules for career positions, 10 point vet pref eligibles must be hired first before anyone else, unless there very is a good reason not too.

 

Also in my office, we have a Vietnam vet, 2 Desert Storm vets, and at least 1 vet that served in Afganistan, that I know of. Im sure there are more but I dont make it a point to ask where someone may have served in such difficult times.

A well run and managed Postal Service could be profitable, and could provide alot of jobs for Veterans, if the board of directers (congress) would just get out of the way.

 

above quoted from commentary thread. . .

 

because. yeah.  .gov benefits come is soo many categories.

Fri, 05/09/2014 - 12:40 | 4743785 Lord Koos
Lord Koos's picture

The pension committments were forced upon the USPS by a conservative congress.  No other agency or private company is forced to hold pension funds in this way.  It is merely a scheme to break, and then privatize, the post office. From the comments, apparently most of you dumb-asses have swallowed the propaganda hook, line and sinker.  A country without a functioning public postal service is a joke.

I have run a small side business in mail-order products since the 1980s and I have had very few problems with the postal service in that entire time, I can count them on one hand.  However I have had some real nightmares with FEDEX and especially UPS.  And USPS will actually pay insurance for lost or damaged goods, unlike the private carriers whose policies are to stonewall all claims.

Remove the pension provision from the USPS and it will return to being a profitable organization. 

Fri, 05/09/2014 - 13:01 | 4743881 thedrickster
thedrickster's picture

"Remove the pension provision from the USPS and it will return to being a profitable organization. "

No, it won't. Nor need it be.

Fri, 05/09/2014 - 14:12 | 4744201 scraping_by
scraping_by's picture

The accurate word is 'surplus' not profit. But management is the current state religion, and we must use its theology.

Fri, 05/09/2014 - 14:25 | 4744253 mumcard
mumcard's picture

Sounds like a gov parasite (postal employee) squealing to me.

Fri, 05/09/2014 - 13:03 | 4743888 marathonman
marathonman's picture

I believe this requirement to pre-fund those pensions ( to workers retiring in 2075 if I recall correctly ) was jammed through in a last kick in the groin to Americans by the Pelosi-led Democrats of 2010.  US Postal is still buckling under the Congressionally required load.  Deep down I still can't understand why Democrats continue to get elected.  Deep down I also know that people are really stupid.

Fri, 05/09/2014 - 11:28 | 4743463 Smegley Wanxalot
Smegley Wanxalot's picture

That's part of the pension plan restructuring. Instead of giving a watch at retirement, the USPS will riddle the retirees with bullets, and thus save the retirement funds for more important things, like paying off bankers, or being extorted by union leaders.

Fri, 05/09/2014 - 10:58 | 4743350 lordylord
lordylord's picture

"Time to put it into extinction."

You mean let a failing business fail?  That's just not American. 

But in all seriousness, I say raise the price of stamps to the point that the USPS is not operating in the red.  Then let's see how many people would actually send any mail with these fools. The tax-payer needs to stop subsidizing all this BULLSHIT.

Fri, 05/09/2014 - 11:14 | 4743426 nope-1004
nope-1004's picture

I think we're at that point already, which is why the losses keep mounting.  People aren't using the service as price of stamps keep increasing at an alarming rate.

 

Fri, 05/09/2014 - 12:44 | 4743810 ajax
ajax's picture

"I think we're at that point already, which is why the losses keep mounting.  People aren't using the service as price of stamps keep increasing at an alarming rate."

Oh come on you have got to be joking: USPS is quite probably the LEAST expensive postal service on earth. Compare USPS prices with Canada, Germany, Switzerland. Here in Suisse a first class postage stamp costs about $1.10 and that's LOCAL not Int'l. Sending a packet from Suisse to USA costs DOUBLE what Americans pay to send the same packet to Suisse.

Have a look at these prices for Domestic postage:

http://www.swisspost.ch/post-startseite/post-privatkunden/post-versenden...

 

Fri, 05/09/2014 - 13:35 | 4744049 lordylord
lordylord's picture

The US tax-payer subsidizes the cost of the stamp.  Get a clue loser.

Fri, 05/09/2014 - 14:08 | 4744187 scraping_by
scraping_by's picture

How? It's been noted elsewhere that, absent the pension drain, the USPS would have a surplus of $1B over the last four years.

If you want subsidies, look at the transportation costs of UPS and FedEX. Semis don't pay the cost of the wear of the highways, and Memphis International is a government entity with less private support than it needs for maintenance. Not to mention the costs of air traffic control and traffic enforcement.

Fri, 05/09/2014 - 14:17 | 4744220 lordylord
lordylord's picture

So the USPS  hasn't recieve loans from the US taxpayer?

All subsidies are bad.  Period.  No need to argue over facts, friend.

Fri, 05/09/2014 - 12:19 | 4743709 Handful of Dust
Handful of Dust's picture

Itz unpossible for house prices to drop, stocks to fall or a busines to fail in The New Merika.

Unpossible!

Fri, 05/09/2014 - 19:49 | 4745180 Peanut Butter E...
Peanut Butter Engineer's picture

Just a year ago my family use to pay all of our bills by mail, which translates to monthly average of $5 to $10 for stamps alone but we converted 50% of snail mail payment to electronic payment with our bank's billpay program and this is all due to recent increase in the stamp cost. Any further increase in stamps cost will means no more snail mail for us.

Fri, 05/09/2014 - 11:03 | 4743378 Kaiser Sousa
Kaiser Sousa's picture

"Time to put it into extinction."

that aint gonna happen to the whole system drowns in its own vonit of debt...

the politicians count on these sheep for their salaries and position from which the go on to become millionaires....this country is so fucked.

Fri, 05/09/2014 - 11:07 | 4743393 Hippocratic Oaf
Hippocratic Oaf's picture

Yep, wanna see a riot; put down this animal and it'll make 'occupy' look like a church service.

I mail nothing but xmas cards and trust me.....I can give that up easily.

Fri, 05/09/2014 - 11:57 | 4743638 dontgoforit
dontgoforit's picture

Unfortunately, if they put it down, the USPS workers would go postal.

Fri, 05/09/2014 - 14:47 | 4744341 Cathartes Aura
Cathartes Aura's picture

and given a quarter of those USPS workers are ex-military, we sure don't want to see that, eh.

Fri, 05/09/2014 - 11:17 | 4743441 sm0k4
sm0k4's picture

I was thinking of this same thing the other day when my mailbox was full of junk. 5 pieces of mail, 2 were advertising, 3 were from credit cards or banks looking for customers (2 of those 3 weren't even for me or anyone in my family). I get junk mail for the old owners of the house multiple times a week. 

Want to increase revenue USPS? Start by charging extra for any mail that deals with solicitation. Then we will see the junk mail decline heavily when it actually costs something for these banks to mail out millions of pieces of junk mail, half of which aren't even for the person at the residence it is sent to. 

Fri, 05/09/2014 - 11:58 | 4743642 dontgoforit
dontgoforit's picture

If everyone would just mail back the empty envelopes it would cover the costs for the USPS. 

Fri, 05/09/2014 - 10:55 | 4743343 max2205
max2205's picture

Embarrassing. ...why even tells us the bad news we already new....

Wonder what Congress critter will do the right thing and shut down this joke

 

USPS = BarryCare....gonna be the same way

Fri, 05/09/2014 - 11:01 | 4743364 lordylord
lordylord's picture

Obummercare:  Run with the efficiency of the DMV, the cost-effectiveness of the USPS, and the heart of the IRS.  Can't lose!  Government is great!  I love government!  Let's have the government run more things!!!!

Fri, 05/09/2014 - 11:10 | 4743406 onewayticket2
onewayticket2's picture

in chicago the letters arent even geting delivered....it's worse than just the bailout...the basic service isnt being provided.

 

http://chicago.cbslocal.com/2014/05/07/2-investigators-complaints-growin...

 

Fri, 05/09/2014 - 11:53 | 4743622 mrdenis
mrdenis's picture

Great idea ,everybody must buy XXXXX ammount of stamps a year or the IRS will apply a "penality tax "....

Fri, 05/09/2014 - 11:59 | 4743647 dontgoforit
dontgoforit's picture

Mail insurance?  Perhaps Mail-o-care.

Fri, 05/09/2014 - 11:19 | 4743455 drendebe10
drendebe10's picture

Skrew their fat azz pensions. Give the lazy bums 401Ks like all the US citizen tax paying serfs and peasants get.

Fri, 05/09/2014 - 13:39 | 4744074 The Longest Call
The Longest Call's picture

Pension reform is a coming....

Better get that cheddar out while you can.  Take the hit, or do this:  

http://perpetualassets.wordpress.com/2014/03/27/a-bird-in-the-hand-is-wo...

Fri, 05/09/2014 - 10:51 | 4743312 intric8
intric8's picture

Sell obozo's new helicopter to fund this, stat!

Do NOT follow this link or you will be banned from the site!