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 The agency said on Monday that it lost $2 billion from April to
June, compared with a net loss of $740 million in the same period
last year, and a $1.9 billion loss in its first quarter.
An increase in its shipping and package business helped the agency
see a 2 percent rise from last year in its total operating revenues
to $16.5 billion.
USPS has focused on its shipping and package business and expanded
to Sunday package delivery as more people shop online and need a
service to deliver their purchases. Shipping and package revenue
jumped 6.6 percent, compared with the same period last year.
The volume of its most profitable product, first-class mail, fell
1.4 percent as more people communicate electronically, but the
temporary rate increase helped offset the losses by bringing a 3.2
percent rise in revenues for that product. The rate increase is a
temporary measure to mitigate the effects of the recession.
The jump in losses was largely due to a $1.5 billion increase in
operating expenses as a result of workers compensation payments, the
agency said.
USPS blames much of its financial troubles on a 2006 mandate to stow
away billions of dollars for its future retirees' healthcare. The
Postal Service already defaulted on three of its payments into the
fund and does not expect to make the next $5.7 billion installment
due September 30.
Because of continued losses, the agency also said, it has not been
able to update its fleet.
"To continue to provide world-class service and remain competitive,
we must invest up to $10 billion to replace our aging vehicle fleet,
purchase additional package-sorting equipment, and make necessary
upgrades to our infrastructure," said USPS Chief Financial Officer
and Executive Vice President Joseph Corbett.
USPS and postal unions have so far failed to coax U.S. lawmakers to
allow it to modify its business, including eliminating or modifying
the future retirees' health fund.
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The agency also wants Congress to authorize it to limit door-to-door
delivery and to cut Saturday mail delivery, but those plans have
been blocked by some unions and lawmakers who say it would hurt
their communities.
Despite the red ink, the latest announcement showed an improvement
from 2012 when USPS lost $15.9 billion that year.
Many in the industry point to these improvements as a sign that the
agency does not need to make the drastic service cuts it has sought.
"Given the positive mail trends, it would be irresponsible to
degrade services to Americans and their businesses, which would
drive away mail – and revenue – and stop the postal turnaround in
its tracks," Fredric Rolando, president of the National Association
of Letter Carriers, said in a statement.
(Reporting by Elvina Nawaguna; Editing by Karey Van Hall and
Jonathan Oatis)
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