USPS reports Q3 net loss of $1.1 billion
The US Postal Service has reported a net loss of $1.1 billion for its third quarter ending on June 30.
The USPS said the “greater-than-expected” net loss was the result of the country's current economic climate which has caused mail volume to decrease at an “accelerated pace.” Increased fuel prices also contributed to the Q3 loss, the agency said.
“With no economic recovery in sight, the postal service expects an end-of-year, economy-driven net loss,” the USPS said. Overall, the agency's year-to-date net loss for fiscal 2008 is $1.13 billion. The Postal Service had essentially broken even in the first half of the fiscal year, it noted.
The USPS reported that total mail volume was down 5.5% compared to the third quarter of 2007. Both First Class Mail and Standard Mail volume were down 5.5% in Q3. Express Mail volume dropped by 14.3%, while Priority Mail was down 4.9%. In addition, periodical volume decreased 3.3% while package services decreased 2.7%, according to the USPS.
Operating revenue for Q3 was $17.9 billion, a year-over-year decrease of 2.4%; and Q3 operating expenses were $19 billion, a year-over-year increase of 1%.
Third quarter expenses included $1.4 billion of a $5.6 billion payment to the Postal Service Retiree Health Benefits Fund. A requirement of the Postal Accountability and Enhancement Act of 2006, the USPS must make this payment by September 30.
“When the economy does rebound, mail volume may not return to previous levels,” said Postmaster General John Potter, in a statement. “This requires that we significantly accelerate process improvements and the realignment of resources in order to achieve long-term financial success.”