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U.S. Postal Service Losses Mount, Warns of Potential for Defaults

February 9, 2011
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WASHINGTON, DC—Feb. 9, 2011—The U.S. Postal Service (USPS) ended the first quarter of this fiscal year (Oct. 1 - Dec. 31, 2010) with a net loss of $329 million, compared to a net loss of $297 million for the same period in fiscal year 2010. Excluding the cost of prefunding future retiree healthcare benefits and noncash adjustments to the workers’ compensation liability, the Postal Service would have had a net income of $226 million for the first quarter.

Despite significant cost reductions and efforts to grow revenue, current financial projections indicate that the Postal Service will have a cash shortfall and will have reached its statutory borrowing limit by the end of the fiscal year. Absent changes in applicable laws, the Postal Service will be forced to default on some of its financial obligations to the federal government on Sept. 30, 2011.

“The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model,” said Postmaster General and CEO Patrick R. Donahoe. “We are eager to work with Congress and the Administration to resolve these issues prior to the end of the fiscal year.”

Economic indicators suggest that the worst of the precipitous volume decline during the recession is over. The lack of strong economic growth, however, continues to have an impact on the Postal Service’s financial situation. Total mail volume increased a modest 707 million pieces or 1.5 percent for the first quarter of 2011, compared to the first quarter of 2010. Total mail volume remains well below the 2006 peak.

Mailing Services revenue of $15.3 billion decreased $520 million, or 3.3 percent, in the first quarter of 2011, compared to the same period a year ago. Mailing Services volume of 45.9 billion represents a 1.5 percent increase from the same period a year earlier. Revenues from Mailing Services declined despite an increase in overall volume. The increase in revenue from Standard Mail was not sufficient to offset the loss of revenue from the reduced volume of First Class Mail.

Mailing Services results include:

• First-Class Mail revenue of $8.8 billion, on volume of 20 billion pieces;

• Standard Mail revenue of $5 billion, on volume of 23.8 billion pieces;

• Periodicals revenue of $480 million, on volume of 1.8 billion pieces; and

• Package Services revenue of $431 million, on volume of 186 million pieces.

Shipping Services revenue of $2.6 billion increased 1.7 percent or $42 million compared to the same period a year ago. Shipping Services volume of 422 million pieces represented a 2.4 percent increase compared to the same period a year earlier.
 
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Most Recent Comments:
Eric Jefferson - Posted on February 19, 2011
"Excluding the cost of prefunding future retiree healthcare benefits and noncash adjustments to the workers’ compensation liability, the Postal Service would have had a net income of $226 million for the first quarter." There is your problem! Business owners - How would you like to pay for ALL of your past, present and future employees that ever worked for your company health benefits? What a joke! Below is what the Post Office Union PR people came up with in the "About the U.S. Postal Service" A self-supporting government enterprise," NO YOU'RE NOT - YOUR LOSING MONEY - HOW IS THAT SELF SUPPORTING? "The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations." You're correct, but for eveything else you NEED AND WASTE our tax money!
Roy Woolner - Posted on February 09, 2011
QUESTIONS… Can the USPS go bankrupt? If so, would they be allowed to restructure their labor agreements?
Click here to view archived comments...
Archived Comments:
Eric Jefferson - Posted on February 19, 2011
"Excluding the cost of prefunding future retiree healthcare benefits and noncash adjustments to the workers’ compensation liability, the Postal Service would have had a net income of $226 million for the first quarter." There is your problem! Business owners - How would you like to pay for ALL of your past, present and future employees that ever worked for your company health benefits? What a joke! Below is what the Post Office Union PR people came up with in the "About the U.S. Postal Service" A self-supporting government enterprise," NO YOU'RE NOT - YOUR LOSING MONEY - HOW IS THAT SELF SUPPORTING? "The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations." You're correct, but for eveything else you NEED AND WASTE our tax money!
Roy Woolner - Posted on February 09, 2011
QUESTIONS… Can the USPS go bankrupt? If so, would they be allowed to restructure their labor agreements?