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.

The Best 71-Second Animation You'll Watch Today

A rock monster tries to save a village from destruction.

Join the Discussion

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

blog comments powered by Disqus

Video

The Best 71-Second Animation You'll Watch Today

A rock monster tries to save a village from destruction.

Video

The Case for Napping at Work

Most Americans don't get enough sleep. More and more employers are trying to help address that.

Video

A Four-Dimensional Tour of Boston

In this groundbreaking video, time moves at multiple speeds within a single frame.

Video

Who Made Pop Music So Repetitive? You Did.

If pop music is too homogenous, that's because listeners want it that way.

Video

Stunning GoPro Footage of a Wildfire

In the field with America’s elite Native American firefighting crew

More in Business

Just In