U.S. Postal Service shrinks forecast losses as hikes prices
10:38 am Thursday, April 27th, 2023
By David Shepardson
WASHINGTON (Reuters) -The U.S. Postal Service said on Thursday it has cut projected losses through 2031 by more than half after winning financial relief from Congress, instituting regular price hikes and adopting reforms.
USPS said two years after unveiling its reform plan it has reduced projected losses from $160 billion to $70 billion over 10 years and still forecasts it can break-even by 2030 despite inflationary pressures that added $3 billion in USPS costs over the last two years.
USPS is raising prices twice yearly and expects its “new pricing policy to generate $44 billion in additional revenue” by 2031. USPS said last month it plans to hike the price of first-class mail stamps to 66 cents from 63 cents and raise overall first-class mail prices by 5.4%.
President Joe Biden signed legislation in April 2022 providing USPS with $48 billion in financial relief over a decade and required its future retirees to enroll in a government health insurance plan.
USPS has asked the Biden administration for accounting changes for retirement contributions that would eliminate amortization payments and save USPS $2 to $3 billion per year and up to $34.6 billion over 10 years.
USPS said in its 2022 budget year it reduced work hours versus 2021 by over 10 million hours — the first year-over-year
reduction in nine years. Through February it has reduced work hours by approximately 15 million hours.
USPS said has converted 125,000 employees to full-time positions, including 50,000 between April 2022 and March 2023.
The Postal Service has also boosted daily packaging processing capacity to 60 million after buying 249 new package processing machines.
(Reporting by David Shepardson; Editing by Sharon Singleton and Alexander Smith)
