(CNSNews.com) – Despite an increase in revenue of $1.1 billion, the U.S. Postal Service reported a net loss of $5.1 billion for Fiscal Year 2015, which ended on September 30th.
"The U.S. Postal Service reported a net loss of $5.1 billion for fiscal year 2015 (October 1, 2014 - September 30, 2015)," the Postal Service said in an news release.
It was the ninth year in a row that USPS ended its fiscal year in the red.
“We achieved controllable income in excess of $1 billion for the second consecutive fiscal year giving us some limited flexibility to make critical investments in the future of the organization,” Postmaster General Megan Brennan said in a statement. “To maintain this success, we will need to continue our efforts to grow the business and drive operational efficiencies.
“However, we will also need the enactment of legislation that makes our retiree health benefit (RHB) system affordable and that provides increased pricing and product flexibility.”
According to USPS’ latest financial report to the Postal Regulatory Commission, the postal system took in $68.9 billion in revenue, an increase of $1.1 billion over the $67.8 billion it received in FY2014.
However, “controllable expenses” also increased $1.3 billion, from $66.4 billion in FY2014 to $67.7 billion in FY2015. That included a 21 million increase in workhours, even though total mail volume declined from 155.5 billion pieces in 2014 to 154.2 billion pieces in 2015.
USPS explained that the increase in operating expenses “was the result of a combination of factors, including higher compensation costs attributable to increased benefits expenses and additional work hours partly associated with growth in the more labor-intensive shipping and packaging business,” which increased 14.1 percent during FY2015.
First-class mail decreased 2.2 percent in 2015 and standard mail volume was down 0.3 percent from last year, USPS reported. Periodical volume also decreased 7.3 percent.
“Adding to the financial pressures that the Postal Service will face in the short term is the fact that the exigent surcharge authorized by the Postal Regulatory Commission in 2014 will need to be rolled back in approximately April of 2016,” said USPS Chief Financial Officer Joseph Corbett.
“This surcharge has provided an additional estimated $3.5 billion in revenue since its inception, and will provide a total of $4.6 billion in additional revenue at the time when the commission will require us to eliminate the surcharge.”
But with $361.1 billion in total assets compared to $462.4 billion in total liabilities, USPS’ long-term financial outlook is not good, the report admitted.
“Total liabilities, including retirement obligations, exceed assets by $101 billion. It would take RHB legislative change and decades of annual profits to remedy this level of excess liabilities and unfunded retirement obligations,” it stated.