Online shoppers help cut U.S. Postal Service first-quarter loss
Andrew Harrer/Bloomberg via Getty Images
By Elvina Nawaguna

WASHINGTON -- The U.S. Postal Service narrowed losses in its latest quarter, as a surge in online shopping and package delivery boosted revenues during the busy holiday season.

The agency, which has lost money for 19 of the last 21 quarters, lost $354 million in its fiscal first quarter ended Dec. 31, compared with the same quarter a year ago when it posted a net loss of $1.3 billion.

Revenues from shipping and package delivery rose by 14.1 percent to $479 million, driven by growth in online shopping and a lucrative deal with online retail giant Amazon.com (AMZN) to deliver packages on Sundays in some U.S. cities, the agency said Friday.

The Postal Service has been grappling with tumbling mail volumes as Americans communicate more online, and as massive payments for its future retirees' health benefits take a toll. A 2006 law requires the Postal Service to fund 75 years worth of its future retirees' health care by 2016.

First-class mail volume, its most profitable product, declined by 4.6 percent, leading to a $209 million drop in revenues from that type of mail.
Operating revenues increased by 1.9 percent to $18 billion.

The agency has sought legislation to allow it to become more innovative and to find other ways to raise revenues, including switching to a five-day delivery system and managing its own health care system. So far Congress has failed to pass reform legislation.

Postmaster General Patrick Donahoe said in a statement that he was proud of what the agency had achieved in reducing losses, but that its financial outlook remains grim.

"We cannot return the organization to long-term financial stability without passage of comprehensive postal reform legislation," he said.

Industry groups argue that the Postal Service's improving finances undercut the need for some of the drastic reforms the agency has sought, like raising postage fees and a five-day delivery schedule.

"Today's Postal Service figures for the first quarter of [fiscal] 2014 are highly encouraging and show why the postal network must be maintained and strengthened, not degraded," said Fredric Rolando, president of the National Association of Letter Carriers.

Higher postage rates would turn more people and companies away from the Postal Service and lead to more losses, said Ben Cooper, co-manager of the Coalition for a 21st Century Postal Service, a group seeking postal reform.

But Richard Geddes, an expert in postal issues and an associate professor at Cornell University's Department of Policy Analysis and Management, said the agency is still lagging behind its counterparts in other developed countries, and urgently needs lawmakers to allow it to adapt to the changing market.

"My hope would be that postal reform in the U.S. would take a deeper look than just what happens in any quarter and think about allowing this firm to adapt to the new marketplace," Geddes said. "I feel sad for the U.S. Postal Service that they have not been legally allowed to adapt."


Amazon Teams With Postal Service to Deliver on Sundays


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militiaman2013

Scamazon is a communist dictatorship like ebay and it's a trap for the poor 99% who think they might make a buck selling their precious belongings to make ends meet since their non livable wages are not enough.

Then, the big surprise, first Scamazon takes a criminally huge fee for the privilege of letting you sell your item.

Next is the postal scam that works like this; if you sell an item that costs $20.00 to ship through the post office Scamazon will reimburse you $3.99 and you have to eat eat the $16.01 loss on shipping. You might try to add the cost to the price of the item your selling but that doesn't work because the average Scamazon customer is a 1%er trying to get something for nothing at the expense of the 99%er who is just trying to survive.

Scamazon and the post office have partnered to rip off the general public on shipping cost for massive billion dollar profits - just look at the numbers post office has cut losses by nearly a billion dollars by charging more for packages and helping Scamazon cheat the public.

Everyone who mailed a package at Christmas that didn't get their on time it was because the post office was busy making sure Scamazon packages got priority over your packages.

February 08 2014 at 8:26 PM Report abuse -1 rate up rate down Reply
militiaman2013

Post office is another too big to fail story; they automated the system 11 years ago with machines that replaced 9 out of 11 workers however the 9 workers who should have been axed were not and remain freeloading at the expense of the customer who has to pay increased postage to support this scam.

February 08 2014 at 8:10 PM Report abuse -1 rate up rate down Reply
mily469

amazon is the company a couple summers ago (2011, pennsylvania) that kept its employees locked inside a non air conditioned warehouse in 100+ degree heat. ambulances had to be called when they started to collapse. if an employee tried to escape they were fired. some employees are demanded to work 7 days a week, some 11 hours a day. no doubt amazon employees make minimum wage which the founder says must be eliminated. and you know they have zero benefits other than to be grateful to work there. this is what a few of the 1% want for you and your children. amazon is bringing apple style manufacturing to you!!! they asked 20 employees in that warehouse if amazon was a great place to work, 19 said no, it was the only job they could find.

February 08 2014 at 11:14 AM Report abuse rate up rate down Reply
militiaman2013

Hey let's give the postal service an IPO and print all kinds of worthless money and flood it into the mail room; then Wall Street can have a new toy to manipulate.

Amazon calling the shots now at the postal service; another case of government being bought off by 1% corporations and you can be sure the mail will never be the same again.

Amazon has agreements or pay offs with UPS already and trust me; Amazon gets priority over anyone else as many learned this past Holiday when their packages didn't arrive by Christmas when they should have.

February 08 2014 at 10:40 AM Report abuse -1 rate up rate down Reply
1 reply to militiaman2013's comment
militiaman2013

Don't worry Dickey I have a huge following and the stalker like you are few and far between.

I have vision of you slicing your face with a straight edge and writing my name in blood all over your home - I mean the inside of your VW.

Don't be so hard on yourself Dickey and save your blood I'm sure it will be needed for research at a later date.

February 08 2014 at 11:49 PM Report abuse rate up rate down Reply
mily469

uh-oh. looks like the gop is going to have to demand the post office prefund their pensions by 400 years in under 5 years next time.

February 07 2014 at 3:56 PM Report abuse +1 rate up rate down Reply
1 reply to mily469's comment
alfrankenfool

That's the stupidest statement I've read all year, oh wait it's coming from a Liberal Regressive Democrap Drone.

February 07 2014 at 4:09 PM Report abuse -1 rate up rate down Reply