Postal Service Delivers $1.9 B Quarterly Loss
The U.S. Postal Service ended its second quarter with a $1.9 billion net loss thanks to the national economic contraction and increased use of faster, cheaper alternatives to traditional mail. Despite deep cuts in costs and work hours, the service still expects a $1.5 billion cash shortfall by the end of its fiscal year in September.
“The economic recession has been tough on the mailing industry, and we have seen an unprecedented decline in mail volumes and revenue that continued to accelerate during the second quarter,” Postmaster General John Potter said during USPS Board of Governors meetings today in Washington. “We are aggressively realigning our costs to match the lower mail volumes, while also maintaining the high level of service and reliability our customers expect. We are also taking a number of steps to grow revenue.”
Those steps could prove tricky, since USPS has lost money in 10 of the last 11 fiscal quarters. Worse, mail carriers delivered only 43.8 billion pieces of mail in the second quarter, down by 7.5 billion pieces, or 14.7 percent from the the same time last year.
Second quarter revenues dropped to $16.9 billion, a $2 billion loss over last year. Operating expenses totaled $18.8 billion, a 4 percent reduction from 2008.
USPS CFO Joseph Corbett said today that the agency is aggressively trimming work hours and other costs in order to save cash. In the first half of its fiscal year, it has cut 58 million work hours -- the equivalent of cutting 33,000 full-time employees. It is on pace to trim more than 100 million work hours for the entire year, or the equivalent of 57,000 full-timers.
Potter threatened earlier this year to cut back to five days of service a week, suggesting the current six days could eventually prove unaffordable. While he called such a move a worst-case scenario, lawmakers and angry customers stepped in almost immediately, postponing further talk of possible cuts.
In lieu of service cutbacks, officials once again today expressed support for a House bill that would redirect some payments to an employee health benefits fund. The move would reduce the projected net loss this year by roughly $2 billion.
Posted by: electroman | May 6, 2009 3:15 PM | Report abuse
Posted by: jwind | May 6, 2009 3:52 PM | Report abuse
Posted by: eagle55 | May 6, 2009 4:01 PM | Report abuse
Posted by: brianlee | May 6, 2009 4:12 PM | Report abuse
Posted by: bucky_katt | May 6, 2009 5:46 PM | Report abuse
Posted by: xconservative | May 6, 2009 7:52 PM | Report abuse
Posted by: brewstercounty | May 6, 2009 8:45 PM | Report abuse
The comments to this entry are closed.