US Postal Service reports $5.2 Billion Loss for Third Fiscal Quarter

credit: USPS

(Best Syndication News) - The United States Postal Service (USPS) announced a net loss of $5.2 billion in their third fiscal quarter results (April 1 – June 30). The USPS also showed a net loss $3.1 billion for the same time period last year.

The USPS attributes the sizeable increase in losses to the mandated prefunding of retiree health benefits. A financial shortfall has caused the USPS to be unable to pay the required $5.5 billion prefunding payment for retiree health benefits that was due on Aug. 1.

Another problem was the reduction in First Class Mail. There was a reduction of 4.4 percent in First Class revenue for the last quarter. There was a 9 percent growth in revenue from Shipping Services and package delivery, but the decline in First Class mail volume offset the growth. Total mail volume this quarter was 38.5 billion pieces, which was a decrease of 1.4 billion pieces compared to the same time last year.

The USPS has been working at reducing costs and becoming more efficient by retooling their operation. The goal is to get the USPS to return to financially stability but large loses are expected to continue until the laws are changed..

Some of the changes proposed in the Postal Business Plan include refunding $11 billion in pension-plan over-funding. The money refunded to the USPS could help them pay down debts and invest for growth in the years to come. There is also a call for reducing to a five-day mail delivery week, which would trim off Saturday service. The USPS also wants to get rid of the requirement to prepay the retiree health benefit and instead wants to introduce the Postal health insurance program, which would operate separate from the current federal programs.

By: Dave Reddy

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