WASHINGTON: The United States Postal Service ended its second quarter with a net loss of $1.9bn as first-class mail volume continued to tumble and lawmakers remained at odds over providing any financial relief, the agency said.
The Postal Service’s net loss for the fiscal second quarter ended March 31 surpassed the first quarter’s loss of $354m, but it remained flat from the year-ago quarter. It was the 20th of the last 22 quarters that the agency has posted a loss, the USPS said.
The volume of first-class mail, the agency’s most profitable product, fell 4.1 percent in the second quarter as more Americans chose to communicate and pay bills via the Internet. “We’re quite obviously in a deep financial hole,” Joseph Corbett, USPS chief financial officer and executive vice president, told reporters in a briefing.
Liabilities totalling $64bn exceeded current assets by $42bn, adding to the agency’s dire financial situation, the agency said in a statement.
In the meantime, its shipping and packaging business remained a bright spot, with volume increasing 7.3 percent as e-commerce grows and more online shoppers need carriers to deliver their goods.
Still, the Postal Service keeps struggling under the weight of heavy mandatory payments into its future retirees’ health fund, which was required by Congress in 2006.
The USPS has sought legislative relief to let it modernise its business service offerings, restructure the future retiree health-fund payments and shift to a five-day mail delivery service.
Postmaster General Patrick Donahoe said he was disappointed in Congress’ failure to act. He added that comprehensive legislation — not a bill narrowly focused on health costs — was still urgently needed.
The USPS had already factored in the expected loss in first-class mail volume, estimated at 4 billion fewer pieces of mail for fiscal year 2014. The agency lacks the money to upgrade its 23-year-old vehicles and make other needed improvements.
Reuters
