Postal Service Posts $2 Billion Quarterly Loss

US Postal Service Mail Delivery Ahead Of Second-Quarter Results
Andrew Harrer/Bloomberg via Getty Images
WASHINGTON -- The U.S. Postal Service lost $2 billion this spring despite increasing its volume and charging consumers more money to send mail, officials said Monday.

The loss for the spring quarter, which ended June 30, was significantly higher than the $740 million loss for the same three-month period last year. The agency blamed increases in compensation and benefit costs for the red ink and said it would be unable to make a congressionally mandated payment of $5.7 billion this September for health benefits for future retirees. The loss came despite a 2 percent increase in operating revenue compared to last spring.

"Due to continued losses and low levels of liquidity, we've been extremely conservative with our capital, spending only what is deemed essential to maintain existing infrastructure," said Joseph Corbett, the Postal Service's chief financial officer.

The Postal Service is an independent agency that receives no tax dollars for its day-to-day operations but is subject to congressional control. It has asked to end most Saturday deliveries, a request that is languishing in Congress amid opposition by postal unions. The agency also is seeking to eliminate the congressionally mandated $5.7 billion annual payment for future retiree health benefits.

Fredric Rolando, president of the National Association of Letter Carriers, agrees that Congress should get rid of the 2006 mandated payment but says it would be "irresponsible to degrade services to Americans and their businesses" just as postal delivery is rebounding with the economy. Because more people are shopping online, "the Internet is now a net positive for USPS, auguring well for the future as e-commerce grows," Rolando said in a statement.

The Postal Service has defaulted before on federally mandated annual payments to cover expected health care costs for future retirees. Corbett said the agency also needs $10 billion to replace old vehicles, buy new package sorting equipment and make other infrastructure upgrades.

Other findings from the latest quarterly report compared to the same time period last year:
  • Shipping and package revenue was up 6.6 percent, while standard mail revenue increased 5.1 percent. The increase was attributed both to higher volume and prices charged to consumers.
  • First-Class mail volume declined by 1.4 percent, but revenue climbed 3.2 percent because of price increases.
  • Operating revenue increased by $327 million to $16.5 billion.
  • Operating expenses increased by $1.5 billion to $18.4 billion.

Postal Service Loses $2 Billion In Second Quarter

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45 Comments

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gee.effwye

What does it mean when they fly the flag half-mast at the post office?

They're hiring.

August 13 2014 at 3:27 PM Report abuse rate up rate down Reply
gee.effwye

Is part of the postal worker's.test held at a gun range?

August 13 2014 at 3:25 PM Report abuse rate up rate down Reply
trew.liberal1

The world's biggest polluter is the government goons.

http://ivn.us/2012/04/18/the-number-one-worst-polluter-on-earth-is-the-u-s-federal-government/

Meanwhile, the worlds dumbest humans worship the knuckle-draggers at the EPA.

Truth really is stranger than fiction sometimes.

August 13 2014 at 9:35 AM Report abuse rate up rate down Reply
toosmart4u

TomWilson31, you do know the Postal Service comes under our republican congress. They are the ones doing nothing to fix the system, they are worried about the upcoming election and how they can get republican control of all government, if that does happen we will be in a lot of trouble.

August 13 2014 at 4:42 AM Report abuse -1 rate up rate down Reply
fred mosrie

I RETIRE FROM THE UNITED STATES POST OFFICE IN 2002. IF THEY CUT OUT SATURDAY SERVICE THEY WILL BE OK. FIVE DAYS A WEEK IS ENOUGH.

August 13 2014 at 1:39 AM Report abuse +1 rate up rate down Reply
ectullis

Affirmative action at work?

August 12 2014 at 6:21 PM Report abuse rate up rate down Reply
William

Let's look at some of the agencies under congressional control, USPS, FAA, TSA, AMTRAK. EPA, HHS, Education, Energy, does anyone else see a pattern here?

August 12 2014 at 6:04 PM Report abuse rate up rate down Reply
1 reply to William's comment
nos2001

all failures....anything government is a joke. overpaid,overstaffed and can't get rid or extra help. the unions are a joke.

August 13 2014 at 3:52 AM Report abuse -1 rate up rate down Reply
koos458

Congress is the problem here, not the USPS.

August 12 2014 at 4:07 PM Report abuse +1 rate up rate down Reply
3 replies to koos458's comment
jrb359

If you think this is bad, wait until you see what happens with obamacare!

August 12 2014 at 3:26 PM Report abuse rate up rate down Reply
sam54ct

Time for the USPS to charge for home delivery, just as they do for a O.O Box at the office locations.

August 12 2014 at 12:50 PM Report abuse rate up rate down Reply
1 reply to sam54ct's comment
trew.liberal1

The do charge for home delivery. It's called a sender pays model.

August 12 2014 at 12:53 PM Report abuse rate up rate down Reply