WASHINGTON (AP) — The Postal Service said Friday it lost $3.1 billion in the
April through June period and could be forced to default on payments due to
the federal government when the fiscal year ends in September.
Losses for the
year come to $5.7 billion.
“We continue to
take aggressive actions to reduce costs and bring the size of our
infrastructure into alignment with reduced customer demand,” Postmaster
General Patrick Donahoe said. But losses have been mounting over the last
few years as more private mail and bill payments were switched to the
Internet, and the recession caused a decrease in business mail.
He said the
agency planned for a decline in first-class mail but it occurred more
rapidly than expected. On the positive side, Donahoe said, there has been an
increase in parcels business as the post office carries more items purchased
via the Internet.
The post office
has asked Congress to change or drop the requirement that it make a $5.5
billion annual payment into a fund to cover future retirement disability
benefits. No other government agency is required to make such a payment.
doesn’t act and current losses continue, the post office will be unable to
make that payment at the end of September because it will have reached its
borrowing limit and simply won’t have the cash to do so. In that event,
Donahoe said, “Our intent is to continue to deliver the mail, pay our
employees and pay our suppliers.”
The post office
wants permission to reduce mail delivery from six days a week to five as
part of a series of cost-cutting measures. And it would like a refund of
overpayments it says it made to employee retirement accounts.
coordinator of the Coalition for a 21st Century Postal Service, which
represents the private sector mailing industry, commented that “within the
past year, the Postal Service’s financial situation has gone from bad to
worse to worst. If Congress does not enact bold reforms soon, the tailspin
the Postal Service is in will pass the point of recovery, and many of the 8
million private sector workers who depend on it will lose their jobs. This
would be terrible not only for them and their families, but for our
designed to change the law governing the post office, an independent
government agency, are pending in the House and Senate.
Service, which does not receive tax revenues for its operations, is in the
process of reducing its administrative staff by 7,500 people and is
reviewing about 3,600 underused post offices across the country for closing.
Over the last four years the Postal Service has cut its staff by 110,000 and
reduced costs by $12 billion.
In the three
months from April through June, the post office handled 39.8 billion pieces
of mail. That’s 1.1 billion fewer items than in the same period a year ago.