US Postal Service runs $2.2B Q2 net loss
The US Postal Service saw a net loss of $2.2 billion in its fiscal second quarter, which ended March 31, despite cutting work hours by 3.2%.
The organization again warned that it will face a cash shortfall by the September 31 end of its 2011 fiscal year, and it will have to default on payments to the federal government without major legislative changes.
“The Postal Service may return to financial stability only through significant changes to the laws that limit flexibility and impose undue financial burdens,” said Postmaster General Patrick Donahoe, in a statement.
Revenue from mailing services dropped 3.9% to $14 billion in Q2, compared with the same period of 2010. Mailing services volume also decreased 3.1%, compared with Q2 2010, to 40.7 billion pieces.
Shipping services revenue increased 5% year-over-year in the quarter to $2.2 billion, while shipping services volume grew by 3.5%, compared with the prior year, to 352 million pieces. The USPS ran a net loss of $8.5 billion in FY 2010.
Although the organization's push to enact “exigent” rate increases was struck down by the Postal Regulatory Commission last year, the USPS is also urging legislators to allow it to reduce its home delivery schedule to five days per week. It is also asking Congress to reform its pension payments requirements, which its inspector general contends have overcharged the Postal Service by tens of billions of dollars since 1972.