Postal Service net loss plummets to $3.1 billion
The US Postal Service continued its downward spiral on Aug. 5, with the agency reporting a net loss of $3.1 billion for the third quarter of its 2011 fiscal year. The number is a slight improvement compared with the same period in 2010, when the USPS posted a $3.5 billion net loss, but the agency said that “absent substantial legislative change” it will default on payments owed to the federal government.
“We are experiencing a severe cash crisis and are unable to continue to maintain the aggressive prepayment schedule that was mandated in the [Postal Accountability and Enhancement Act of 2006]. Without changes in the law, the Postal Service will be unable to make the $5.5 billion mandated prepayment due in September,” Joseph Corbett, CFO and EVP of the USPS, said in an earnings statement. A USPS representative referred requests for comment to the earnings statement.
USPS' operating revenue dipped 2% compared with the prior year to $15.8 billion. Revenue from mailing services, which generated 86% of the agency's total revenue for the quarter, fell by 3% year-over-year to $13.6 billion. Mailing services includes first-class mail, standard mail, periodicals and package services. Revenue from Shipping Services, which includes Express Mail and Priority Mail, rose by 7% to $2.2 billion.
At 39.5 billion pieces, mailing services accounted for 99% of total mail volume in the quarter. The USPS said that its total mail volume dropped to 39.8 billion pieces for the quarter, a 3% decline from the prior year, and that the fall was led by a decrease in First Class Mail.
First Class Mail volume was down 6% year-over-year to 17.7 billion pieces, while Standard Mail volume rose 1% to 19.8 billion pieces. Periodicals stayed flat at 1.8 billion pieces. The USPS decreased work hours in the quarter by 9.2 million hours.