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Postal News Roundup

U.S. Postal Service Reports Fiscal Year 2017 Second Quarter Results
“Although the U.S. Postal Service posted modest controllable income for the second quarter of fiscal year 2017 (January 1, 2017 - March 31, 2017) of $12 million, it fell well short of the $576 million that it had for the same quarter last year. This reduction was driven by the April 2016 expiration of the exigent surcharge, which would have generated approximately $500 million in additional revenue during the quarter had it remained in place, and to a lesser extent, a $69 million increase in controllable operating expenses. Operating revenue was $17.3 billion, a decrease of $474 million from the same period last year. Revenue from First-Class Mail and Marketing Mail decreased $606 million and $331 million respectively over the prior year quarter, due largely to the exigent surcharge expiration and lower volumes. These declines in operating revenue were somewhat offset by continued growth in the Shipping and Packages business, with a second quarter revenue increase of $486 million, or 11.5 percent, over the same period in the prior year…” 

OIG: Update for Measuring Pension and Retiree Health Benefits Liabilities
“…The OPM calculates the Postal Service’s share of the CSRS, FERS, and retiree health benefits liabilities using demographic and economic assumptions from the federal employee workforce. However, using Postal Service-specific demographic and economic assumptions lowers these liabilities by $10.2 billion. Between FY 2010 and FY 2014, the funded status of the CSRS and FERS pension plans changed from a surplus to a deficit primarily due to changes in assumptions for the interest rate and the cost of living allowances, and lower than expected investment returns on pension plan assets…”

Postal Service, citing losses, seeks higher stamp prices (AP)
“The U.S. Postal Service is hoping it can soon raise stamp prices by a penny or more. The postal service on Wednesday reported a quarterly loss of $562 million, despite growth in package delivery, due to continued erosion in the use of first-class mail as well as expensive mandates for its retiree health care obligations. It also attributed losses to a forced reduction in stamp prices last year. The postal service is generally barred under federal law from raising prices more than the rate of inflation. But it is seeking greater regulatory leeway to increase prices, including a one-cent rate hike provided in a measure being considered by Congress…” 

Postal Service seeks ‘firmer financial footing’ from Congress, new appointments from Trump
“Among the hundreds of political executives that the Trump administration must nominate to fill out the ranks of federal agencies, the U.S. Postal Service is calling upon the White House to submit names for its management board. The U.S. Postal Service currently has zero independently appointed governors on its board, and hasn’t had a new governor sworn in over seven years, Postmaster General Megan Brennan told reporters Wednesday. Without those governors at the helm, USPS cannot legally make several long-term decisions, like selecting a new postmaster general, introducing new postal products or revamping its business strategies…”

Direct mail not dying out in the wake of digital 
“Each year, businesses in the U.S. use about 68 million trees to produce 17 billion catalogs and 65 billion direct mail pieces. Yet, referring to a study by the Boston Consulting Group, Experian notes that the use of direct mail is not waning in the wake of digital and advertisers will be using direct mail marketing even more in the years to come. Total spending on ad mail is expected to rise from 11% to 12% by 2020… Furthermore, USPS found that consumers who receive direct mail spend 28% more than those who don't and Neiman Marcus claims to make $4 for every $1 it spends creating and mailing catalogs…”