On Tuesday, the U.S. Postal Service changed the planned July 11, 2015 shutdown of the Processing and Distribution Center in Tucson/Cherrybell to a “To Be Determined” status.
The Postal Service has tried, at times, to be fiscally responsible, but local politicians on both sides of the aisle have turned the nearly obsolete Cherrybell facility into a political opportunity to scare their constituents.
First announced in 2011, the closure of the Cherrybell processing facility would require all mail processing to be consolidate to USPS’s Phoenix facility, cutting nearly 250 union jobs and ending overnight delivery for Tucson residents.
“While any news other than closure is good news, we must keep in mind the hundreds of our neighbors who are waiting with baited breath to learn if their jobs will be there next year,” said Rep. Raul Grijalva. “Likewise, small businesses across Southern Arizona that count on local service to ensure overnight delivery are awaiting an outcome too. I will continue to do everything in my power to ensure the outcome is the right one for our neighbors, our community, and out postal service at large.”
Facts:
The U.S. Postal Service ended the June 30, 2014, quarter with a net loss of $2.0 billion, compared to a net loss of $740 million for the same period last year.
As of September 2014, the Postal Service has recorded a loss in 21 of the last 23 quarters, the excepted quarters being the two in which Congress rescheduled the Retiree Health Benefits prefunding payments.
In 2014, the Postal Service revenue improve as a result of the Postal Service’s January mail price increase, successful sales and marketing initiatives, and continued success in growing the package business. Total operating revenue of $16.5 billion increased by $327 million, or 2.0 percent, compared to the same period last year.
Shipping and Package revenue was up 6.6 percent. Standard Mail revenue was up 5.1 percent, driven by a 0.9 percent increase in volume and the January 2014 price increase. First-Class Mail volume was down 1.4 percent, but the January price increase offset this decline, resulting in a 3.2 percent revenue increase.
Total operating expenses for the third quarter of 2014 were $18.4 billion, an increase of $1.5 billion from the same period last year, driven mainly by the Workers’ Compensation fair value adjustment. Compensation and benefits expenses increased by $15 million, or 0.1 percent, compared to the third quarter of 2013, as contractual pay increases were offset by work-hour reductions and more efficient use of available labor flexibility.
Chief Financial Officer and Executive Vice President Joseph Corbett said that the organization will be unable to make the required $5.7 billion retiree health benefit prefunding payment to the U.S. Treasury, due by Sept. 30, 2014. Comprehensive postal legislation is necessary to eliminate this liability and provide a basis for the Postal Service to return to long-term financial health.
This quarter’s results were improved as a result of implementing the exigent price increase, which the Postal Regulatory Commission has ruled as a surcharge to be collected only until the Postal Service recovers a total amount of $3.2 billion of incremental revenue, estimated to occur in the second half of 2015. The Postal Service has petitioned the United States Court of Appeals for the District of Columbia Circuit to review the PRC’s order on the exigent price increase. Among other things, the Postal Service’s position is that the PRC improperly and artificially limited the amount of relief to which the Postal Service was entitled as a result of the Great Recession.
Following is a summary of third quarter results of Operations compared to same period last year:
• Total mail volume of 37.7 billion pieces compared to 37.8 billion pieces •Shipping and Package volume increased 7.7 percent.
• Standard Mail volume increased 0.9 percent.
• First-Class Mail volume declined 1.4 percent. This was the 32nd consecutive quarterly decline for First-Class Mail volume.
• Operating revenue of $16.5 billion increased $327 million or 2.0 percent.
• Operating expenses before non-cash Workers’ Compensation and Postal Service Retiree Health Benefit Fund expenses of $16.5 billion increased from $16.3 billion, a 1 percent change.