Postal Service loses $1.9B in last quarter

The U.S. Postal Service announced Friday that it lost $1.9 billion over its most recent quarter, despite bringing in more revenue during that three-month span.

{mosads}The red ink means the cash-strapped agency has now lost money in 20 of the last 22 quarters. In all, the agency lost some $2.2 billion in the first six months of fiscal 2014, through March 31.

Postal officials again cited the losses to press lawmakers to enact a comprehensive overhaul of the agency, which has now lost more than $23 billion over the last two and a half years.

In its statement, the USPS said that first-class mail volume dropped roughly four percent in 2014’s second quarter, a continuing result of the rise in electronic communication.

The agency added that it would not be able to pay a scheduled $5.7 billion payment for future retirees’ healthcare due in September, the fourth such bill it would default on in recent years.

But there were bright spots for the Postal Service in the results. Shipping and package revenue grew by more than a quarter billion dollars over last year’s second quarter, as consumers increasingly rely on online shopping. The USPS, citing that growth, is seeking to expand its package delivery, in some cases, to Sunday.

In all, revenue grew $379 million over 2013’s second quarter.

Still, even with — or perhaps because of — those positive signs, congressional efforts to pass postal reform legislation remain stalled.

House Oversight Committee Chairman Darrell Issa (R-Calif.) postponed a planned markup of legislation modeled after President Obama’s own postal recommendations this week, after struggling to get Democratic backing.

Issa had already pushed a postal measure through his committee last year, and the Senate Homeland Security Committee passed its own postal measure this year. But leaders in both the House and the Senate have shown no interest as of yet in bringing postal bills to the floor.

Postal leaders have consistently pushed for legislation that would allow them to roll back Saturday letter delivery, set up their own healthcare plan and give them relief from the required benefit prepayment.

Congressional Democrats, postal unions and even dozens of House Republicans have signaled that they oppose any limits on Saturday delivery.

Labor officials have suggested that ending the prepayment would be the most helpful to the Postal Service’s bottom line, after yearly losses dropped from $15.9 billion to $5 billion in 2013.

But Joseph Corbett, the USPS’s chief financial officer, pushed back on that idea Friday.

“We haven’t been making the retiree health benefit prefunding payments because we can’t,” Corbett said in a statement. “If legislation reduced the required retiree health benefit prefunding payment, it doesn’t provide us with any more cash to pay down our debt or put much needed capital into our business.

Only comprehensive postal legislation that includes a smarter delivery schedule, greater control over our personnel and benefit costs, and more flexibility in pricing and products will provide the necessary cash flows,” he added.

USPS also said it would have to implement contingency plans to make sure the mail was delivered if there was a downturn in the economy or any other unforeseen problems.

Tags Darrell Issa United States Postal Service
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