WASHINGTON — Holiday shipping and the 2012 election helped the Postal Service stems its losses, but the agency’s financial woes continued in the first quarter, which ended Dec 31.
The Postal Service posted a $1.3 billion loss in the first quarter, compared with a $3.1 billion loss over the same period last year. The agency said the first quarter has traditionally been one of its strongest periods.
Total mail volume continued to decline, however. Mail volume was 43.5 billion pieces for the quarter, down from 43.6 billion in earlier year, according to agency officials.
Revenue from first-class mail, which provides the bulk of the revenue for the Postal Service, declined $237 million, or 3.1 percent, from the same period last year, with a decrease in volume of 834 million pieces, or 4.5 percent. Revenue from advertising mail increased $141 million, or 3.1 percent, in the first quarter compared with the same period last year on a volume increase of 783 million pieces, or 3.6 percent. The increase is largely attributable to official election mail and political campaign advertising related to the presidential and Congressional elections mailed during the quarter, which began Oct. 31.
The agency’s shipping and packaging business increased by $154 million, or 4.7 percent, over 2012 first-quarter results, fueled by the growth of online shopping and the continuing success of Postal Service marketing campaigns to promote shipping services.
The agency also said that it cut its operating costs to $18.9 billion from $20.9 billion over the same period last year, a decrease of 9.8 percent. The agency attributed the savings to a number of cost-cutting measures it has undertaken, including staff reductions and the consolidation of some of its mail processing centers.
But postal officials said the agency’s actions alone are not enough.
“The encouraging results from our holiday mailing season cannot sustain us as we move deeper into the current fiscal year and face continuing financial challenges,” said Patrick R. Donahoe, the postmaster general. “We urgently need Congress to do its part and pass legislation that allows us to better manage our costs and gives us the commercial flexibility needed to operate more like a business does. This will help ensure the future success of the Postal Service and the mailing industry it supports.”
The agency announced earlier this week that it would seek to move to a new delivery schedule beginning the week of Aug. 5. The post office would stop delivering or picking up mail on Saturdays, ending a practice that goes back to the 1890s. Packages would continue to be delivered Monday through Saturday. The Postal Service said the change would result in an annual cost savings of approximately $2 billion if the new delivery plan is fully implemented.
Members of Congress, postal unions and some businesses strongly oppose the move. But Mr. Donahoe said the Postal Service's dire financial situation calls for drastic measures.
Current projections show the Postal Service will have less than five days of operating cash reserves by the end of the 2013 fiscal year, which the post office said would leave it unable to react to possible economic downturns or other issues.
The Postal Service wants Congress to remove a 2006 requirement that it pay nearly $5.5 billion a year for health benefits to future retirees, a mandate imposed on no other government agency, that officials have said has crippled the post office. The agency defaulted on two payments last year for the first time and said it would not be able to pay them this year. The agency also wants to be able to enter into new areas, like shipping beer and wine through the mail, which is currently prohibited.
Last April, the Senate passed a bill that would have allowed the Postal Service to ship beer and wine, reduced its work force, and allowed the agency to recoup more than $11 billion it overpaid into an employee pension fund. The Senate refused to stop Saturday deliveries. The House has taken no action on its own postal overhaul.
“Our liquidity concerns can only be fully resolved if Congress takes action to address our unsustainable business model, including resolving the overly aggressive payment schedule to prefund retiree health benefits,” said Joseph Corbett, the agency’s chief financial officer. “The Postal Service will continue to prioritize payments to our employees and suppliers ahead of those to the federal government to ensure that we maintain high-quality customer service.”
Postal Service Posts Loss of $1.3 Billion in First Quarter
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Postal Service Posts Loss of $1.3 Billion in First Quarter
