US Postal Service: COVID-19 is having a devastating effect on our business

[postareale]

https://postandparcel.info/120802/news/ ... -business/

USPS: COVID-19 is having a “devastating effect on our business”
The U.S. Postal Service is requesting access to $75 billion through a combination of cash, grants and loans to avoid a liquidity crisis this Autumn, reports Government Executive.

Postmaster General Megan Brennan told committee members in a virtual briefing on Thursday that USPS will “run out of cash this fiscal year” without further financial assistance.

Brennan said that USPS now expects a $13 billion revenue loss tied “directly to COVID-19” this fiscal year. Over the next 18 months, that loss would approach $22 billion and would exceed $54 billion within the next decade, “threatening our ability to operate.”

“We are at a critical juncture in the life of the Postal Service. At a time when America needs the Postal Service more than ever, the reason we are so needed is having a devastating effect on our business,” Brennan said.

“The Postal Service relies on the sale of postal products and services to fund our operations, and these sales are plummeting as a result of the pandemic. The sudden drop in mail volumes, our most profitable revenue stream, is steep and may never fully recover.

“I want to commend the brave men and women of the Postal Service for all they are doing in the midst of this pandemic,” said Carolyn Maloney, the oversight committee’s chairwoman, after receiving a briefing from Brennan on Thursday. “The Postal Service is holding on for dear life, and unless Congress and the White House provide meaningful relief in the next stimulus bill, the Postal Service could cease to exist.”

[hero22]

Don't think its the same here. Mail and parcels have never been as high in our office.

[wacko74]

Don't think its the same here. Mail and parcels have never been as high in our office.

The cost of sick pay and taking on casual workers to cover the 20% of staff off sick will more than wipe out any increase in revenue from the increase in pkts.

I don't understand why RM aren't requesting financial support from the government, especially given that it's the govt. that deemed us to be ''key workers'' who have to keep operating throughout this crisis.

Everyone else from benefits claimants to Billionaire Branson, Green and Levy are getting some from of govt help so why shouldn't RM as well?

[postareale]

Don't think its the same here. Mail and parcels have never been as high in our office.

The cost of sick pay and taking on casual workers to cover the 20% of staff off sick will more than wipe out any increase in revenue from the increase in pkts.

I don't understand why RM aren't requesting financial support from the government, especially given that it's the govt. that deemed us to be ''key workers'' who have to keep operating throughout this crisis.

Everyone else from benefits claimants to Billionaire Branson, Green and Levy are getting some from of govt help so why shouldn't RM as well?

If Royal Mail hadn’t been sold and listed on the London Stock Exchange it would’ve been bailed out by the Her Majesty’s government by now!

Check out again share price performance since Rico Back became CEO on June 1 2018.

The solution for the UK guv is to sack Back and buy back all RMG shares. This is an essential public service for all citizens across the land. As the currrent crisis has proven. The time to act is now!

[SpacePhoenix]

The solution for the UK guv is to sack Back and buy back all RMG shares. This is an essential public service for all citizens across the land. As the currrent crisis has proven. The time to act is now!

Once the coronavirus has gone, and the government has to start to pay off the debt from all this, there's no way the government will be able to afford to buy back RM. They'll probably be looking at large cuts across all government departments and drastic reductions in public spending plus tax rises

[britwrit]

It's interesting to see what will happen. So many variables. We're having a Christmas level rush in parcels but much less pressure to get them out the door quickly. Are any temporary outhouses/sorting centres being rented?

My guess is that the company will do financially well out of this. Then they'll use what we make to pay down our massive debt because (a) it's smart, and (b) few people will take notice.

[PostmanBitesDog]

“The Postal Service is holding on for dear life, and unless Congress and the White House provide meaningful relief in the next stimulus bill, the Postal Service could cease to exist.”

Especially while Dumbass Trump is president. He's got a seriously vindictive streak in him when it comes to Amazon. More to the point, a strong dislike towards Amazon's C.E.O. Jeffrey Preston Bezos. That's because the 56-year-old multi-multi-multi-multi-billionaire ($117.2 billion) owns The Washington Post, a paper not seen as a favorite of President Stupid's.

Check out this Los Angeles Times article from Michael Hiltzik published on Thursday:

LA Times (April 9, 2020) - Business Column: Trump Again Attacks the U.S. Postal Service With Lies

Of the myriad pathological fixations swirling around President Trump’s approach to governing, perhaps the oddest is his unrelenting hostility to the U.S. Postal Service. Trump was at it again during a news briefing Tuesday, when, prompted by a question from a reporter, he hared off after the Postal Service and one of its most important customers, Amazon.com. In his usual style, Trump disavowed responsibility for the Postal Service. “I’ll tell you who’s the demise of the Postal Service,” he said. “It’s these internet companies that give their stuff to the Postal Service — packages.” He asserted that the Postal Service loses money “every time they deliver a package for Amazon or these other internet companies that deliver.”
He said that if the Postal Service raised prices “by actually a lot they could make money or break even.” He claimed he had no authority over the service, because it’s run by independent boards “appointed by other administrations.”
There’s a lot of misinformation to unpack there, so let’s roll up our sleeves and get started. Let’s keep in mind that Trump is attacking a government service specifically designed to provide universal delivery, binding together a nation from the remote Aleutian Islands of Alaska to Key West, from Lake of the Woods in frigid northern Minnesota to humid Brownsville, Texas. Postal services are specifically enumerated in the Constitution (Article I). Put it all together, and the notion that they should be offered only at a profit or even at break-even costs is unsupported by law or tradition. We don’t operate the military at a profit, or schools or any other public service; the notion that the Postal Service should be “run like a business,” as inviting that is to conservatives, is code for undermining a public good and letting private enterprise saddle up.

Trump blew up at the reporter’s repeating an assertion she attributed to Rep. Gerald E. Connolly (D-Va.), that Trump killed a provision in a coronavirus rescue measure that would have given the Postal Service an emergency appropriation of $25 billion. In the latest rescue package, the Postal Service only received a government-backed loan of up to $10 billion; postal officials have said it needs more to guarantee its continued operation past June. As for Trump’s representations, although it’s true that the Postal Service is overseen by an independent board of governors, they’re all subject to presidential appointment. Currently the board has two vacancies and five members. Every one of the five was appointed by Trump.

The separate Postal Regulatory Commission has the power to set rates, which are Trump’s major bugaboo. The PRC has five members, of whom no more than three can be members of the same party. Of the current commissioners, three (two Democrats and a Republican) were appointed by Trump. The other two members are both Republicans. Trump doesn’t appear to be up to speed on this. He said at the briefing, “We just got a chance to appoint a couple of people onto the commission, as I understand it, and that’s good.” It’s hard to glean what he’s talking about. He made his three appointments in June 2018 and August and June of last year, which stretches the term “just” pretty far. The other two seats don’t open up until 2022. If Trump’s appointees don’t see things his way, he has no one to blame but himself.

Trump’s claims that a cut-rate deal with Amazon is at the heart of the service’s losses, that it loses money on every Amazon parcel or that it could move into the black if it jacked up prices by “a lot” aren’t based on facts. More likely, they’re based on his animosity to Amazon, which is owned by Jeff Bezos, who separately owns the Washington Post. That sticks in Trump’s craw, because the Post produces some of the most searching, effective — and critical — coverage of his administration. Indeed, Trump’s overt threats directed at Amazon have resulted in the blowup of a $10-billion contract for high-tech services that the Pentagon awarded to Microsoft. Amazon has sued to stop the award, asserting that its bid was superior and was lost to Microsoft only because of Trump’s interference. The deal is still tied up in court.

Amazon and other package delivery services, including those such as FedEx that aren’t internet merchants, have become a crucial customer base for the Postal Service. There’s no evidence from the service’s financial reports that these deliveries are made at a loss. Indeed, they account for an increasing share of its revenue. In the first quarter of fiscal 2019 ended Dec. 31, the service reported, shipping and packages revenue increased by $146 million, or 2.3%, despite a volume decline of 84 million pieces, or 4.6%, compared to the same period a year earlier. The growth in parcel revenue probably can’t make up for the sharp decline in first-class mail, which is one of the challenges faced by the Postal Service. Packages and shipping accounted for less than one-third of the service’s revenue of $71.3 billion in the last fiscal year. The service certainly could negotiate contracts at higher rates, but there are obvious limits, since parcel delivery isn’t a legal monopoly reserved to the Postal Service and at some level it would lose business to other parcel services or to a home-grown service such as one that Amazon has had in the works.

The actual terms of Amazon’s deal with the Postal Service aren’t public. But there’s reason to believe that the relationship is relatively efficient. According to Trump’s version, “these companies ... walk in and drop thousands of packages on the floor of the post office and say ‘deliver it.’” But Amazon boasts a well-developed logistical capacity. By some accounts, the firm does a considerable amount of sorting before dropping off its parcels for the Postal Service to carry the last few miles. No one disputes that the Postal Service loses billions of dollars a year — $8.8 billion in the last fiscal year. But the largest single contributor to its red ink is a mandate Congress imposed in 2006 that it pre-fund its retiree health coverage costs, a requirement no other government agency faces.

Connolly and fellow Democrats hoped to eliminate the mandate and the resulting overhang of debt via the coronavirus rescue package, but failed. Trump hasn’t done anything to improve the Postal Service’s fortunes, nor has he shown that he understands its problems. As with so many issues, he could do everyone a favor by not talking about it.