U.S. Postal Service Reports 1Q $2.2 Billion Loss
U.S. Postal Service Reports 1Q $2.2 Billion
Loss
The United States Postal Service reported Tuesday that it lost $2.2 billion in the first quarter, warning that it could be forced to default on federal payments if action is not taken to relieve pressure on it. Such a payment default would not interrupt mail service, the agency said, but could further hinder the agency as it continues to struggle through a decline in revenue because of the Internet and tough economic times.
In the three months ended March 31st, the USPS says it lost $2.2 billion, well above its posted loss of $1.6 billion in the same three months of 2010. The agency said it will also surpass its Congressionally-set borrowing limit of $15 billion before the end of the budget year on September 30th. Unless Congress takes action, the agency warned, it won't have enough cash available to make certain payments to the government, including payments to a trust fund for health care for its future retirees.
“ The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model,” explained Postmaster General and USPS CEO Patrick Donahoe. “The Postal Service may return to financial stability only through significant changes to the laws that limit flexibility and impose undue financial burdens.”
Total mail volume for the quarter was about 41 billion pieces of mail, down 3.1 percent from the same period a year ago. There was a small increase in the agency's revenue from standard mail, but it wasn't nearly significant enough to offset losses in revenue from first class mail, the agency said. The USPS has cut more than 130,000 jobs over the last three years, and is planning an additional 7,500 job cuts of administrative positions on regional offices.
The United States Postal Service reported Tuesday that it lost $2.2 billion in the first quarter, warning that it could be forced to default on federal payments if action is not taken to relieve pressure on it. Such a payment default would not interrupt mail service, the agency said, but could further hinder the agency as it continues to struggle through a decline in revenue because of the Internet and tough economic times.
In the three months ended March 31st, the USPS says it lost $2.2 billion, well above its posted loss of $1.6 billion in the same three months of 2010. The agency said it will also surpass its Congressionally-set borrowing limit of $15 billion before the end of the budget year on September 30th. Unless Congress takes action, the agency warned, it won't have enough cash available to make certain payments to the government, including payments to a trust fund for health care for its future retirees.
“ The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model,” explained Postmaster General and USPS CEO Patrick Donahoe. “The Postal Service may return to financial stability only through significant changes to the laws that limit flexibility and impose undue financial burdens.”
Total mail volume for the quarter was about 41 billion pieces of mail, down 3.1 percent from the same period a year ago. There was a small increase in the agency's revenue from standard mail, but it wasn't nearly significant enough to offset losses in revenue from first class mail, the agency said. The USPS has cut more than 130,000 jobs over the last three years, and is planning an additional 7,500 job cuts of administrative positions on regional offices.
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