How bad is the outlook for the Postal Service? Ronald Stroman, deputy postmaster general, doesn’t hesitate.
We’re defaulting on our retiree health benefit obligations, he explains.
We owe the Treasury $15 billion, he says.
First class mail volume is declining about 4 percent a year, he notes.
The Post Office should spend about $10 billion to upgrade its fleet of delivery vehicles and improve its sorting equipment to reflect the growing importance of package delivery, he adds.
It’s not a pretty picture. It helps explain why the Postal Service is talking about unspecified new products it expects to roll out and upgrades such as next-generation postboxes, which could hold packages for customer pickup.
(To the question, “Will you deliver groceries?,” Stroman said he couldn’t say.)
The hulking problem that looms over the Postal Service is the Congressionally imposed requirement that it prepay its retirees’ pensions and health benefits. On paper, this is why the Postal Service reports quarterly losses in the $2 billion range.
Postal Service’s bleak financial picture requires Congressional action, deputy postmaster general says