Finances Stabilize, or Maybe Not

It’s hard to know whether the U.S. Postal Service should have as its theme song “We’re in the Money” or “Brother, Can You Spare a Dime?” Its just-released financial results for the first quarter of fiscal 2016 suggest both are accurate – depending on how you read the statements.

 

Putting a Stamp on Good Causes

Would you pay more for a postage stamp if the extra money went to support a cause you consider important? Many people would, and do. It’s the idea behind semipostal stamps. You may be familiar with the Breast Cancer Research semipostal stamp, but might not know about its history or the semipostal stamp concept.

 

What should be the top priority for capital investment?

For the first time in years, the U.S. Postal Service has money to invest in its future. Postal officials have said they expect to spend about $2 billion on capital projects in 2015.

There’s a good chance most of that investment will go toward revamping the 190,000-vehicle fleet – one of the Postal Service’s most pressing needs. Our audit work found that the Postal Service’s vehicle fleet is adequate for delivery needs only until about 2017.

 

Making Every Mile Count . . . More

Earn more or spend less. Those are the two basic ways to achieve financial fitness, whether you’re talking about the household budget or a multi-billion-dollar corporate balance sheet.

And that’s what it comes down to for the U.S. Postal Service as it seeks to bring revenue in line with expenses (it lost $5 billion in fiscal year (FY) 2013). So far, the Postal Service has been looking at cost cutting ideas like moving to 5-day mail delivery to changing employee benefits to consolidating networks.

 

Show Me the Money

Benjamins, dough, cabbage, coin, greenbacks. Most of us could rattle off a dozen or more slang words that mean money. But we might be unsure what certain financial terms -- operating income, liquidity -- mean. When you follow the U.S. Postal Service, this might put you at a disadvantage, especially when it’s quarterly financial statement time.

 

Big Changes in Canada

Canada Post shares a number of similarities with the U.S. Postal Service, including its founding by Benjamin Franklin in 1753 when both Canada and the 13 colonies were under British rule. Both posts are self-supporting, meaning they pay for their operations through the sale of postage and services. And Canada Post, like the Postal Service, has suffered volume losses the past few years.

 

Exigent Price Increase Proposed

The U.S. Postal Service’s governing body, the Board of Governors, voted this week to request permission to raise postage prices above the inflation-based price cap to generate $2 billion in revenue in 2014. It is asking the regulator, the Postal Regulatory Commission (PRC), to allow the Postal Service to raise the price of a stamp by 3 cents (to 49 cents), which is 2 cents more than the annual inflationary increase. Prices on other single-piece and commercial mail products would also increase.

 

Passing up Passport Revenue?

Until the early 1970s, citizens applying for passports had to wait in long lines at one of 10 U.S. Department of State passport offices or at a federal or state court. The traveling public was not happy about the inconvenient locations of these offices or the hours’ long wait to submit an application, and they let their elected officials know. The solution allowed post offices to accept and process passport applications on behalf of the State Department. The passports were then mailed directly to the applicants.

 

Charging for a New Address?

The U.S. Postal Service adds more than 600,000 new delivery points each year, mostly in the form of new residential homes. While most new residences include cluster boxes rather than to-the-door delivery to reduce costs, delivery remains the Postal Service's largest cost center. Canada Post, which has suffered losses recently after years of profits, has introduced a $200 per address charge that it is assessing housing developers for installing community mailboxes.

 

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