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Postal Service lost $3.5 billion in third quarter

By Lisa Rein
Lisa Rein

By The Post's Lisa Rein

The U.S. Postal Service lost $3.5 billion in the third quarter of the year and may have trouble making payments for health benefits for future retirees, officials said Thursday.
Losses for the quarter that ended June 30 were $1.1 billion more than the Postal Service hemorrhaged during the same period a year ago, according to a financial report presented to the agency's board of governors.
The bleak picture -- on top of several years of plummeting revenue caused by declining mail volume -- comes as the Postal Service prepares to begin labor negotiations for new four-year contracts with its two largest unions,representing rural letter carriers and clerks, maintenance workers and motor vehicle operators.
"We continue to work on productivity," chief financial officer Joseph R. Corbett told the board. "But we need legislative and contractual changes... .We've got to get to be a profitable organization."
To stem the losses, the Postal Service has proposed raising rates and eliminating Saturday delivery. Both proposals are pending. Another high cost is advance payments required for future retirees, which come to about $5.5 billion annually. Even with borrowing, the agency's cash-flow problems may be too severe to allow payment in the next fiscal year, Corbett said.
The financial statement was challenged by a new lobbying group representing volume mailers. The Affordable Mail Alliance, which is fighting the plan to raise rates in January, accused the Postal Service of inflating its financial pressures to push the rate increase through.
"It's misleading information designed to thwart the need for the rate case," said Tony Conway, head of the alliance. He said postal officials indicated as recently as a month ago that they would finish this fiscal year with $1.3 billion in cash.


By Lisa Rein  | August 5, 2010; 2:29 PM ET
Categories:  Agencies and Departments  
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Comments

face it money is fungible... the DoD and federal government has been subsidizing corporations like fedex and the other delivery services for decades... that's right...

think about it... fedex has fleets of aircraft...ditto for the others... they get lucrative contracts to ship parts to the troops overseas and within CONUS at really inflated rates... this more than offsets costs in other areas...

the post office is competing with its hands tied behind its back having to pay air carriers to deliver the mail and packages...

it's no wonder they will stop service on saturdays... maybe if the federal government didn't allow air carriers to consolidate and merge all the time... there would at least be a little more competition...

let's analyze this issue correctly... and stop busting on the post office.

Posted by: FranknErnest | August 5, 2010 11:39 PM | Report abuse

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