Postal Service says it lost $2.2 billion over three-month period

Postal Service says it lost $2.2 billion over three-month period

The U.S. Postal Service (USPS) announced Friday that it lost $2.2 billion in the second quarter of the year as the coronavirus pandemic devastated the U.S. economy.

Louis DeJoy, who recently took over as postmaster general, admitted his agency’s finances are “dire,” warning that it could shed about $20 billion overall in 2019 and 2020 alone.

“Let me start by saying that I am an optimist by nature, and as I take on this new role, I am enthusiastic and energized about the prospects for our future and our untapped promise,” DeJoy said in remarks to the USPS Board of Governors Friday. “That said, I am a realist, and am keenly aware of the magnitude of the financial challenges we face.”

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“Our financial position is dire, stemming from substantial declines in mail volume, a broken business model and a management strategy that has not adequately addressed these issues,” he added. “Without dramatic change, there is no end in sight, and we face an impending liquidity crisis.” 

The Postal Service said package deliveries were up by over 50 percent as Americans were homebound during the pandemic, but that improvement was more than offset by declines in first-class and business mail. 

DeJoy urged intervention from Congress and said his department is looking for a $10 billion infusion to cover losses and regulatory changes. But even that kind of investment would not be enough to fundamentally alter USPS’s financial situation. 

“Access to an additional $10 billion in borrowing authority will delay the approaching liquidity crisis and is a positive development,” he said.

“However, we remain on an unsustainable path which cannot be solved simply by borrowing money which needs to be paid back with interest, since our current path does not enable us to pay even our current bills, let alone new ones. We will continue to focus on improving operational efficiency and pursuing other reforms in order to put the Postal Service on a trajectory for long-term financial stability.”

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DeJoy said he has directed the department to take an aggressive approach to reduce “ingrained inefficiencies” to try to cut costs, including implementing stringent restrictions on overtime, among other things. 

“By running our operations on time and on schedule, and by not incurring unnecessary overtime or other costs, we will enhance our ability to be sustainable and to be able to continue to provide high-quality, affordable service,” he said. “I call on every executive, employee, union and management association leader to join me in pursuing this simple objective that every service organization needs to achieve in order to be successful.” 

The news comes amid an avalanche of concerns over the agency’s ability to handle what is expected to be a flood of mail-in ballots this year, with Democrats saying changes DeJoy has made, including reducing overtime and adjusting delivery policies, may leave the agency even more unprepared.

“We believe these changes, made during the middle of a once-in-a-century pandemic, now threaten the timely delivery of mail — including medicines for seniors, paychecks for workers, and absentee ballots for voters —  that is essential to millions of Americans. While it is true that the Postal Service has and continues to face financial challenges, enacting these policies as cost-cutting or efficiency measures as the COVID-19 public health emergency continues is counterproductive and unacceptable,” Speaker Nancy PelosiNancy PelosiPelosi preparing for House to decide presidency if neither Trump or Biden win electoral college: report Trump seeks boost from seniors with 0 drug discount coupons GOP senators confident Trump pick to be confirmed by November MORE (D-Calif.) and Senate Minority Leader Charles SchumerChuck SchumerDemocrats blast Trump after report reveals he avoided income taxes for 10 years: 'Disgusting' Biden refuses to say whether he would support expanding Supreme Court Schumer says Trump tweet shows court pick meant to kill off ObamaCare MORE (D-N.Y.) said in a letter to DeJoy Thursday.