USPS lost $200M during holidays

Pre-fund mandate continues to hamper Postal Service.

WASHINGTON — The U.S. Postal Service said Thursday it lost $200 million during the year-end holiday season, despite a strong quarter of package shipping and expanded use of vote-by-mail in the November presidential election.

The results also reflect continued erosion in the delivery of first-class mail as well as expensive mandates for pre-funding of its retiree health care obligations.

The post office’s report shows earnings of more than $1.4 billion between October and December 2016. But when effects of a $1.7 billion change in workers’ compensation liability due to fluctuating interest rates are excluded, the service says it lost money overall.

Operating income came to $522 million, down from $1.3 billion in the previous year.

The post office continued to notch double-digit growth in its package business, boosted by the strength of Amazon and other Internet retailers, but also suffered losses from a forced reduction in stamp prices last year. Election-related mail volume, meanwhile, rose to 1.3 billion, up from 214 million in the same period in 2015, a non-election year.

An independent agency, the Postal Service does not use taxpayer money for its operations. Under federal law, it can’t raise prices more than the rate of inflation without approval from the Postal Regulatory Commission.

Quarterly revenue was $19.2 billion, down slightly over the same period in the previous year.

The Postal Service is urging relief from the mandate to “pre-fund” retiree health benefits. Legislation in 2006 required the post office to fund 75 years’ worth of retiree health benefits, something that neither the government nor private companies are required to do. The service continues to press for legislation this year.