U.S. Postal Service Can't Stop the Bleeding

The U.S. Postal Service is still having a tough time. It lost another $3.5 billion in the second quarter, as mail volume continued falling and operating expenses rose. How bad is it? Let's consider its recent performance.

Via the Wall Street Journal:

The Postal Service's $3.5 billion loss for the quarter ended June 30 compares with a $2.4 million loss a year earlier. Its year-to-date loss widened to $5.4 billion from $4.7 billion.

In other words, the USPS is hemorrhaging cash. It can't see to get its head above water, and things are getting worse, instead of better.

In July, we learned of a potential postage increase. This might help a little, or it might not help at all. As the slope of a consumer demand curve shows, as a product or service's price rises, the appetite for it falls. So it's unclear just how much good raising prices would really do for overall revenue if it lowers volume. The USPS had better hope that the consumer demand curve for mail is very steep.

But despite the post office's poor performance, it's hard to imagine that the federal government would ever allow the USPS to fail entirely. So Washington will probably just throw more and more money at it if necessary. At this point, it's hard to see how the business will ever be profitable, considering how the world continues to evolve.

Presented by

Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

Why Principals Matter

Nadia Lopez didn't think anybody cared about her middle school. Then Humans of New York told her story to the Internet—and everything changed.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Video

A History of Contraception

In the 16th century, men used linen condoms laced shut with ribbons.

Video

'A Music That Has No End'

In Spain, a flamenco guitarist hustles to make a modest living.

Video

What Fifty Shades Left Out

A straightforward guide to BDSM

More in Business

Just In