The U.S. Postal Service has been seeing a sharp decline in profitability the last few years, forcing cuts and other drastic measures to try and stay afloat. Now, as the clock on the 90-day extension for a more than $5 billion payment, the Postal Service is appealing to customers and Congress to reform and improve their business model.

“‘Neither snow, nor rain, nor heat, nor gloom of night… will stay us from the swift completion of our appointed rounds,’—for more than 235 years, the U.S. Postal Service has adhered to this unofficial creed,” said Louisiana Postal Service Manager Jeffery Taylor. “But now, the agency that is responsible for delivering mail to every resident of the nation at affordable rates is facing a financial crisis.”

Taylor has said that, absent Congressional action, the Postal Service will suffer a cash shortfall this year. They may even be forced to default on monies owed to the federal government.

There is no doubt the Postal Service has been struggling. Many are quick to point to email and digital technology, which are easily a lost source of revenue for the business that delivers 167 billion pieces of mail annually.

But, Taylor said, it is more than just lost postage that is draining the funds from the Postal Service. This includes the funds forcibly paid as required by federally regulation and money the organization is still owed.

“The Postal Service needs Congress to enact legislation…that would eliminate the current mandate requiring retiree health benefit pre-payments, which costs the Postal Service $5.5 billion annually,” Taylor said.

The money Taylor refers to is part of the Postal Accountability Enhancement Act, where the Postal Service is required to make anticipatory annual payments to the Treasury, in order to completely fund retiree health care costs. That remaining cost is still due. The payment was originally due on September 30. Thanks to a recent House bill—HR 2884—the Postal Service has another 90-days to make that payment.

Also part of the drain is the $6.9 billion the service had over paid to the federal employees retirement system.

To compensate for the loss in profits, cuts have been coming across the board. This June, residents and officials were barely able to save the St. Bernard office, which was on a list with 3,700 other retail locations set for closure in the nation. The Postal Service has already reduced its career positions by 110,000 over the last four years.

And according to the numbers given last week, by Postmaster General and CEO Patrick Donahoe, at the state of the Postal Service address show that another $20 billion in costs need to be cut by 2015 for the Postal Service to become profitable. These are in addition to the $12 billion already cut.
And the Postal Service has outlined a series of money managing measures, according to Rachel Cousin—the Post Office Marketing Manager for Louisiana. This includes consolidating processing plants for larger areas and increasing the coverage area for other locations as well. However, few are currently being employed.

Cousin told St. Bernard residents that Congress has declared none of the new measures would be considered until they see, “a good faith effort,” by the Postal Service to reduce its inordinate workforce and large system of offices.

So some of the changes have had to come from within the Postal Service, including the recent declaration that prominent people can now be featured on stamps while they are still alive—a break from the normal post mortem releases. The service is even soliciting aid from social media to market and get customers more involved with the stamp selection process.
Taylor said the efforts are a good start, but are insufficient to close the budget gap needed for the Postal Service to survive.

“The Postal Service is not seeking tax subsidies,” Taylor went on to say. “We receive no tax dollars for operating expenses, and rely on the sale of postage, products and services to fund our operations. Moreover, the Postal Service is not seeking additional borrowing authority. Indeed, the Postal Service needs access to the money we already have…

Taylor continued, “Regardless of how many people use the Internet to pay their bills and send documents, the core function of the Postal Service and core need of its customers— the physical delivery of mail and packages to America’s homes and businesses— will always exist,” Taylor continued.

“And despite doom and gloom headlines, the Postal Service can have a bright future and be put on the road to profitability, if given the flexibility from Congress to operate more like a business does.”