USPS Reports $1.9 Billion Loss

U.S.-mail-boxThe U.S. Postal Service suffered a net loss of $1.9 billion in the first quarter of 2013, highlighting the urgent need for legislative reform, according to Postmaster General and CEO Patrick Donahoe, who says the public corporation needs to save $20 billion per year by 2016.

In 2012, the USPS posted a total loss of $16 billion and defaulted on $11.1 billion in scheduled health-care benefit contributions.
 
The latest quarterly results show no change in a long-term trend of declining mail volumes. The total number of pieces of mail delivered slipped 1.5% from 39.4 billion in the first quarter of 2012 to 38.8 billion in the first quarter of 2013. Previously, annual mail volumes declined from 213 billion pieces in 2006 to 159.9 billion in 2012, for a 25% decline over six years.
 
In February, USPS proposed cutting costs by ending Saturday delivery, but the move met with opposition from legislators, as well as interested parties like magazine publishers. Congress passed a continuing resolution forcing the USPS to continue delivering mail six days a week.

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The USPS board of governors backtracked, saying the planned service reduction would have to be put off until Congress authorizes it with new legislation.
 
Donahoe and the board of governors also hope Congress considers abandoning legislation that requires the USPS to pre-fund health care for future retirees. As it stands now, the USPS expects to default on another $5.6 billion health care benefit contribution in September of this year.
 
In the past, Donahoe has also proposed cost-cutting measures, including closing post offices in rural areas, but was blocked from doing so by the Senate. USPS efforts to raise revenues by delivering beer and wine have also been stymied by Congress, which refused to vote down 1909 legislation forbidding this.
 
Donahoe is now proposing a new Five-Year Business Plan that aims to restore the USPS to solvency. It includes creating a USPS health-care plan to resolve the pre-funding issue; reduce delivery to five days a week as proposed, except for packages, which would still be delivered six days a week; streamline governance; and allow the USPS to expand products and services, which may be a reference to adding beer and wine delivery.

1 comment about "USPS Reports $1.9 Billion Loss".
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  1. Chris Westerkamp from Active Youth Network, May 13, 2013 at 10:31 a.m.

    Someone should take the balance sheet of USPS next to the balance sheet for UPS OR FEDEX and see what's costing USPS so much money and fix it if possible. I suspect it's pensions and health care. would be good to know . . .

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