US Postal Services posts $5.6B loss for 2016

The U.S. Postal Service, which has suffered through years of financial trouble, recorded a net loss of $5.6 billion for fiscal 2016 despite an increase in revenue.

The Postal Service had $610 million in so-called controllable income for the year, down from $1.2 billion in 2015.

{mosads}Controllable income, which takes into account operational expenses including compensation and benefits, excludes the $5.8 billion payment mandated by the government to prefund the agency’s retirement benefits.

Excluding the obligation, the Postal Service would have recorded net income of about $200 million in 2016.

The agency’s losses increased from 5.1 billion in 2015.

“To drive growth in revenue and better serve our customers, we continue to invest in the future of the Postal Service by leveraging technology, improving processes and adjusting our network,” said Postmaster General and CEO Megan Brennan.

“In 2016, we invested $1.4 billion, an increase of $206 million over 2015, to fund some of our much-needed building improvements, vehicles, equipment and other capital projects,” Brennan said.

The shipping and packages business showed revenue growth of $2.4 billion, or 15.8 percent, which was offset by a 3.3 percent decline in first-class mail revenue of $925 million.

Overall, the Postal Service reported operating revenue of $70.4 billion for 2016, a 2.3 percent increase over last year, which excludes a $1.1 billion change in accounting estimate during the year.

The agency posted a revenue increase despite the April expiration of a surcharge, which was put in place to offset losses through the recession, that reduced revenue by approximately $1 billion more than it would have been.

Without the surcharge, revenue will be lowered by about $2 billion a year.

In response to another yearly loss, the agency once again urged Congress to take action saying that despite some positive trends in the decade-long trail of loses can’t be ignored.

“Even with continued proactive and aggressive management, such losses are likely to persist for the foreseeable future because of mandated costs such as an unaffordable retiree health benefits program that is not fully integrated with Medicare, and an ineffective pricing system,” the agency said in a release.

Overall, operating expenses increased compared with last year.

This story was updated at 4:02 p.m.

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