Postal Service posts profit after holiday season

A record number of holiday packages helped push the Postal Service toward a profitable first quarter for the new fiscal year.

The mail service reported $1.3 billion in controllable income — that’s income that covers the service’s operational expenses but not large prepayments into a retiree health benefit fund — and $307 million in net income for the stretch spanning from Oct. 1 through Dec. 31. Both of those numbers are up from the same period one year earlier.

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The busy holiday shopping season was good for the Postal Service, as package shipping was up over 16 percent from the same period a year prior. However, Postal officials maintained that Congress needs to step in with legislation to reform the Postal Service after years of red ink.

“Despite these achievements and the best efforts of our employees, our financial condition will worsen without legislative reform,” said Megan Brennan, the postmaster general. “Our financial situation is serious but solvable through the enactment of prudent legislative reform.”

In particular, the Postal Service noted that its finances may not be as rosy as they appear. While it reported a positive net income for the first quarter of fiscal 2016, officials noted that most of that came from a $1.2 billion favorable changes in workers’ compensation payouts spurred by changes in interest rates — something wholly outside the control of the Postal Service itself. Another boost came from a temporary hike in postage costs that is set to expire in April.

In other words, Postal Service officials said the profitable quarter should not be seen as a sign that the mail service is back on its feet permanently. Rather, without action from Congress, officials expect the service to again post multibillion dollar losses per year.

“While net income is favorable compared to a net loss, it unfortunately does not reflect the end of our losses," said Joseph Corbett, chief financial officer and executive vice president.

However, the postal employees’ union had a more optimistic take, arguing the latest results are an indication the mail service is adjusting to a modern world where e-mail has effectively replaced traditional letters.

“These results aren't a fluke,” said Fredric Rolando, president of the National Association of Letter Carriers. “They stem from two structural factors: An improving economy has helped stabilize letter revenue, and Internet-driven online shopping has sent package volume sharply upward.”

Recent efforts by Congress to reform how the nation delivers its mail have stalled, and there is little sign the issue will move from the backburner in the near future. But lawmakers close to the matter remain eager to address it.

“I strongly urge my colleagues in Congress to come together around significant, bipartisan reforms that can stabilize the Postal Service’s financial situation and stop the downward spiral of this American institution before it is too late,” said Sen. Tom CarperThomas (Tom) Richard CarperHillicon Valley: Facebook, Google struggle to block terrorist content | Cambridge Analytica declares bankruptcy in US | Company exposed phone location data | Apple starts paying back taxes to Ireland Overnight Energy: Pruitt taps man behind 'lock her up' chant for EPA office | Watchdog to review EPA email policies | Three Republicans join climate caucus Watchdog to probe EPA email preservation MORE (D-Del.), the ranking member of the Senate Homeland Security and Governmental Affairs Committee.