U.S. Postal Service loses $2.4 million an hour in third quarter
The U.S. Postal Service released a dire financial report for the third quarter, featuring a $5.2-billion loss as first-class mail volume shrinks and the agency continues to default on retiree healthcare benefit payments.
For the three months ended June 30, the USPS lost the equivalent of $57.1 million a day, or nearly $2.4 million an hour. Over the same period in 2011, the agency suffered a $3.1-billion loss.
As more customers switch to email and other electronic transactions, first-class mail took a 4.4% slide. Overall mail volume tanked 3.6% to 38.5 billion pieces total.
The plunge was too deep to be offset by the shipping and packaging sector, which enjoyed a 9% revenue boost with 43 million more pieces sent.
So far this year, USPS has lost $11.6 billion, compared to $5.7 billion over the same chunk of time last year.
But nearly 80% of that chasm is due to the $9.2 billion that the agency owes the federal government in payments to pre-fund retiree health benefits, per a congressional mandate.
The USPS defaulted on a $5.5-billion payment Aug. 1 and is set to miss another $5.6-billion payment due Sept. 30, it said.
And unless legislative changes are made – namely a USPS-specific healthcare plan independent from federal requirements – the agency said “large losses are expected to continue.”
Executives at the agency said that by the end of the fiscal year and through October, USPS will face increasingly low cash levels and an inability to borrow, despite efforts to cut costs and move to a five-day mail delivery schedule.
“We remain confident that Congress will do its part to help put the Postal Service on a path to financial stability,” said Patrick Donahoe, postmaster general and chief executive, in a statement. “We will continue to take actions under our control to improve operational efficiency and generate revenue by offering new products and services to meet our customers’ changing needs.”
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