USPS isn't going out of business
by Rockwell Sands @

No, USPS Isn’t Going Out of Business

The United States Postal Service is not running out of cash or shutting down operations any time soon, despite what you may have read

If you’ve checked the Internet lately, you may have seen news pieces on the imminent demise of USPS. In fact, it’s difficult to avoid the subject. With the upcoming Presidential election, the Postal Service has become a political football between Democrats and Republicans. On one hand, Democrats keep pushing the message that USPS will go out of business without federal aid. On the other, some Republicans believe USPS should be privatized and raise its rates to make more money. Now, President Trump has cited mail-in-voting as a reason to oppose funding USPS, even though voting by mail is the only way many Americans will be able to cast their votes this year due to the Coronavirus pandemic. Amidst the conflicting messages, mainstream media outlets have adopted Democrats’ viewpoint that USPS is failing. However, most of these messages circulating are rooted in hyperbole, rather than in truth.

Don’t Believe the Media Messages that USPS is Going Out of Business

Recently, the media has portrayed the Postal Service as a cash-strapped organization that lacks the capacity to function properly. Package volume is now higher than it’s ever been, yes, and this has resulted in some strains on postal infrastructure. That said, data shows that USPS has actually been increasing in performance. USPS is an incredibly large organization, with hundreds of millions of mail pieces passing through its network each day. A small number of delays and lost packages relative to total volume have always been unavoidable. Since more packages have entered the network due to eCommerce growth amidst the pandemic, critics argue that delays and missing packages have become more widespread. However, the margin of error has remained nearly the same as it was before COVID-19.

It’s true that there are some pockets of service backlogs in very specific locations. These backlogs are likely related to local issues such as COVID-19 infections, staffing impacts at local Post Offices, or cutoff times for working that USPS is testing in specific regions. Speaking on operational efficiencies, Postmaster General Louis DeJoy said the following in a memo to employees on August 13th:

“I congratulate you on substantial improvements in our on-time dispatch schedule, which reached 97.3 percent, up from 89.8 percent. We also have reduced extra trips by 71 percent — a tremendous achievement. This means more mail is being moved to its intended destination on time and on schedule than in quite some time. And, we accomplished this in a cost-effective manner. This marks the beginning of our journey toward world-class performance necessary for us to compete and be sustainable.”

Pre-Funding Legislation: the Real Reason for the Postal Service’s Troubles

The real reason behind the Postal Service’s financial troubles goes back to 2006, when Congress enacted legislation called the Postal Accountability and Enhancement Act. This legislation required USPS to make federally-mandated payments several times a year to set aside money for future employees’ retirement and health benefits up to 75 years into the future. As a result, USPS was shelling out massive amounts of cash for the benefit of future employees who haven’t even been born yet. These federally-mandated payments were onerous, and carved out a huge hole in the Postal Service’s finances. Ever since USPS began making these payments in 2007, the organization began operating at a net loss each year. Once the media caught wind of this, they began painting USPS as a debt-riddled organization that could go out of business any day. Although, before the first pre-funding payment in 2007, USPS had always operated in the black.

Coincidentally, USPS owes one of these payments to the Treasury at the end of September, in the amount of $8 billion. The good news is, USPS can simply default on these payments without any real recourse. In fact, that’s exactly what the organization has been doing for the past few years. If USPS actually were to make these federally mandated payments, it would bankrupt the organization almost immediately. However, without any recourse, there’s simply no reason for USPS to make these payments and shoot themselves in the foot.

Another thing to mention is that this $8 billion payment would be directed into retirement funds that are already well-funded enough. Missing—or defaulting on—this payment won’t create any kind of crisis. In fact, USPS has some of the best funded retirement plans around. For example, a portion of this $8 billion would have gone to the Postal Service’s Retiree Health Benefit Fund. If no payments find their way into this particular fund, then it will run out of money 10 years from now…3 years after Medicare itself goes broke.

USPS Doesn’t Need the $10 Billion Loan from the Treasury

In addition to the pre-funding payments, the bigger issue is that USPS recently to accept a $10 billion loan from the Treasury. This amount of money will subsequently be available to the Postal Service, should the organization need it. However, USPS doesn’t need to take this loan, because it actually has a cash balance of $12.9 billion on hand. According to the postal insiders, this is a historically high level of cash for the organization.

The Postal Service’s daily cash burn to operate hovers right around $220 million. Judging from that figure, the amount of cash USPS has on hand translates to roughly 58 days of liquidity. If USPS defaults on the $8 billion it owes the Treasury, it will still have $12 billion on hand. Not to mention that package volumes are still on the rise. Consequently, so is revenue from these services.

In addition to that, this year’s Presidential election will see a massive influx of vote-by-mail ballots, since voters have limited in-person polling options due to continued social distancing ordinances. USPS makes a small amount of revenue off of mail-in-ballots, as well. Depending on individual states, USPS classifies mail-in ballots as either Marketing Mail or First-Class Mail, and mailing services are precisely how USPS makes the majority of its money. As a result, the upcoming Presidential election is set to inject another boost into the Postal Service’s finances.

In a Nutshell…

Despite the media’s messages, support for USPS comes from both sides of the political aisle. Democrats or Republican, no one wants to see the organization fail. The Postal Service is America’s most beloved institution, and has consistently ranked as such several years in a row. However, most media outlets’ reports about the USPS “cash crisis” haven’t taken into account all of the facts. In reality, the idea that USPS is desperate for cash and going out of business is simply not true.

No, the Postal Service is not going under. For a simple explanation why, here’s what it all comes down to: USPS doesn’t have to make any enormous federally-mandated payments to the Treasury, package revenues are on the rise and will continue to increase, and the unprecedented amount of mail-in ballots for this year’s election will create added revenue at a perfect time. With all this evidence, it’s difficult to believe the claims that is USPS going out of business anytime soon.

29 Comments

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  1. Geneva M Maples

    I don’t see my first comment. I asked where I can write to file a complaint about my mail service. Can you give me an address, please?

    Reply  
  2. Geneva M Maples

    In regard to the post I just posted a few minutes ago, I tried to track the envelope. All it showed was that it was put in my mail box on 8/28/2021. No tracking of where it had been for the 8 days since it was mailed on 8/20/2021. The tracking number was 9405 5092 0204 3040 9385 35.

    Reply  
  3. Geneva M Maples

    Where can I send a complaint. I had a Tracked/Insured Priority Mail envelope mailed on 8/20/21 that was delivered on 8/28/2021 – 8 days later? On front says “PRIORITY MAIL – 2-DAY”. One end was torn open. This is my DISH magazine that I pay extra to have mailed first class because it was always late if mailed bulk mail.

    Reply  
  4. LIVIER

    Supposably my mail went out since March 2021 and so far as now no answer, no information, really bad service and cero attention. Is their someone there!???? To respond for all this frustration.

    Reply  
  5. Danny

    Estos rapa su madre mamaguevo todos de USPS tienen 4 paquetes míos desde el 1 de mayo del 2021 y todavía no llegan ni siquiera se comunican con uno malditos irresponsables rapa su madre 🤬🖕🏻

    Reply  
    • LIVIER

      Ya somos 2 yo desde Marzo y aún ninguna noticia de nada. Es una porquería de servicio y atención.

      Reply  
  6. Joyce

    The package was supposed to be delivered on Monday, Aug 2nd and I tracked it today and its still not delivered as of today. I called the postal service and gave them tracking number and I still don’t know when it will be delivered. This is crazy,I could have just sent it regular mail if I knew it was going to take this long

    Reply  
  7. cristina magaña

    ayúdenme a localizar donde están los documentos que mande los mande el 14 de junio del 2021 , me dijeron de 2 a 3 semanas ya casi cumplen el mes y no han llegado a su destino Tijuana baca california a un domicilio particular , pueden ayudarme?

    Reply  
  8. Liliana Cervantes

    Hello I was sent a package by usps to Mexico from April 19, 2021 and since that date I do not know anything about it and I left a message to their company and they told me that I just have to wait 🤬🤬

    Reply  
  9. Mary Holst

    I have seen USPS perform badly for a couple of years now. The worst is the stimulus check roll out. I have a 3/26/21 mailed date an informed delivery of 4/1/ 21 and now 5/2/2021 no check. They don’t take responsibility and do not help ! We deserve better from this organization Dejoy is sabotaging because his Buddy Trump lost !

    Reply  
  10. Lisa

    The absolute worst!!!! And these poor mail carriers are getting the brunt of poor leadership. They purposely make it difficult for me people to check on their packages and refuses to explain delays. UPS doesn’t seem to have an issue. USPS is hands down the worst for a reason. People need to do something about their leadership.

    Reply  
  11. alethia flores

    i didn’t recibe my packge

    Reply  
  12. Roderick Briffa

    I have 2 packages stuck. 1 from 27th march and another from 7th april. What is going on please?

    Reply  
    • Rockwell Sands

      Hi Roderick – I’m so sorry you’re on the hunt for this package, and I apologize for any confusion here. Shipping School is simply a free educational resource geared for small business owners to help them save the most money on their shipping processes. We don’t have anything to do with USPS and the delivery of packages themselves. At this point, I would suggest submitting a missing mail search with USPS, or contacting them directly to see what’s going on. You can do that here. You can also type in the tracking number into the USPS website to see if you can glean any more information on the whereabouts of this package here. Hope this helps!

      Reply  
  13. Yusuf

    My iterm has gone missing since February and here is the tracking number CC185357836SE

    Reply  
  14. gabriela

    i didnt receive my packge in mexico UH034099208US

    Reply  
  15. Jodha

    Tracking ID : EP616663573IN
    There is no update on this package since 1st March .
    Kindly help

    Reply  
  16. Elena

    CV060456883UA
    CV060456923UA
    CV060466700UA
    CV060466695UA
    CV060541595UA
    Missing my boxs, please help me find them USPS

    Reply  
    • cristina magaña

      buenos días tengo mas de 3 semanas que mande unos documentos de aquí de las vegas a Tijuana baja california a un domicilio particular , tengo numero de seguimiento y me dicen que ya están en México pero no saben en donde están específicamente , pueden ayudarme a encontrar en donde están?

      Reply  
  17. Reniery armardo hernandez

    Quiero saber cuando llega mi pasaporte

    Reply  
  18. Shahadat hossain tanim

    My purchase thorough new York facility USPS 28day .how long my purchase come in the my post office.

    Reply  
  19. María Molina

    Gracias x la buena atención

    Reply  
  20. Frank

    Please my parkege was sent on the 27th of October yet is has not gotten to me what’s wrong how long does my parkege going to take before it gets to me

    Reply  
  21. Christoph Klukowski

    My package was sent to the wrong destination. Not to Europe but to China or Japan

    When sending to wrong address

    Tracking number CH100072212US was not sent to Switzerland (CH) but to China

    According to the tracking, my parcel has been in place since 04.Sept. in PU DONG Shanghai China

    Sincerely,
    Christoph

    Reply  
    • Alcides Calunga

      I lost 11 certificate coins Whit high grade some of them like 1999_D lincoln 1c ms 68- PL one Canada Maple lift dollar ms 63 and more moreore I like your opinion l send Priority sure I get a lawyer they asking what I want to do after 10 year getting only crappy results in all my certification sure a get them is much out is possible please give a coming thanks

      Reply  
  22. john h welch

    my meds left ohio on sept 8,2020 i have not recievd them i am out.what is wrong

    Reply  
    • Steve

      Great article!
      Thank you for dispelling all the inaccurate information out there and providing the historical facts as to the pre funding mess Congress created.
      Congress (Democrats and Republicans) could correct the pre funding rule overnight by abolishing it but that would make too much sense. They need something to argue about and the main stream media need content.

      Reply  
  23. Deepu

    Sir pls courier send to addrs

    Reply  
  24. A. Desiato

    Why are you using this color font it is difficult to see? Why have grayed out all the font in this article very difficult to read. Please for the sake of old eyes change it.

    Reply  

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