USPS Posts $3.3 Billion Loss in 3 Months
To return to profitability, Donahoe has advanced a plan to reduce annual costs by $20 billion by 2015. The plan includes continued aggressive actions to generate additional revenue and reduce operating expenses. To reach the goal, the Postal Service also needs changes in the law. “Passage of legislation is urgently needed that provides the Postal Service with the speed and flexibility needed to cut costs that are not under our control, including employee health care costs,” Donahoe said. “The changes will give the Postal Service a bright future and provide the nation with affordable and reliable delivery for generations to come.”
Other details of the first quarter results compared to the same period last year include:
- Total mail volume of 43.7 billion pieces, a 6 percent decrease.
- Operating revenue of $17.7 billion, a 1.1 percent decrease.
- Operating expenses (before prefunding of retiree health benefits and the impact of discount rate changes for worker’s compensation liability) of $17.8 billion, a 1 percent increase.
- Transportation expenses increased by $105 million, or 6.3 percent, due to rising fuel costs. The Postal Service continues to decrease controllable costs, including an 8 million decrease in work hours, or 2.8 percent. Total compensation and benefits expenses decreased by $180 million, or 1.4 percent.
The Postal Service continues to suffer from a severe lack of liquidity. “Absent significant changes in the law to allow normal commercial freedoms, the Postal Service will default on both retiree health benefits pre-payments to the federal government due this year,” said Chief Financial Officer Joe Corbett. “Even if legislation changes or eliminates the prefunding payments, we may reach our $15 billion debt ceiling in the fall of this year.”
Complete financial results are available in the Form 10-Q, available after 10 a.m. ET today, at http://about.usps.com/who-we-are/financials/welcome.htm.
The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.