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The United States Postal Service ended its second quarter with a net loss of $1.9 billion as first-class mail volume continued to tumble and lawmakers remained at odds over providing any financial relief, the agency said on Friday.
The Postal Service's net loss for the fiscal second quarter ended March 31 surpassed the first quarter's loss of $354 million, but it remained flat from the year-ago quarter. It was the 20th of the last 22 quarters that the agency has posted a loss, the USPS said.
The volume of first-class mail, the agency's most profitable product, fell 4.1 percent in the second quarter as more Americans chose to communicate and pay bills via the Internet.
"We're quite obviously in a deep financial hole," Joseph Corbett, USPS chief financial officer and executive vice president, told reporters in a briefing.
Liabilities totaling $64 billion exceeded current assets by $42 billion, adding to the agency's dire financial situation, the agency said in a statement.
In the meantime, its shipping and packaging business remained a bright spot, with volume increasing 7.3 percent as e-commerce grows and more online shoppers need carriers to deliver their goods.
Still, the Postal Service keeps struggling under the weight of heavy mandatory payments into its future retirees' health fund, which was required by Congress in 2006.
The USPS has sought legislative relief to let it modernize its business service offerings, restructure the future retiree health-fund payments and shift to a five-day mail delivery service.
Postmaster General Patrick Donahoe said he was disappointed in Congress' failure to act. He added that comprehensive legislation - not a bill narrowly focused on health costs - was still urgently needed.
The USPS had already factored in the expected loss in first-class mail volume, estimated at 4 billion fewer pieces of mail for fiscal year 2014. The agency lacks the money to upgrade its 23-year-old vehicles and make other needed improvements.
Congress has remained gridlocked on postal reforms, partly by pressure from trade groups and unions to maintain the status quo, as well as due to some lawmakers' reluctance to see postal services cut back in their districts.
Lawmakers pushing postal reform legislation include Oklahoma Republican Senator Tom Coburn, Delaware Democratic Senator Tom Carper, and Representative Darrell Issa, a California Republican and the chairman of the House Oversight and Government Reform Committee.
The U.S. Postal Service, which does not receive taxpayer funds, has said it could require a massive bailout from the taxpayers in excess of $50 billion by 2017 if Congress fails to act.
"The harsh reality is that it's likely we'll continue to see the U.S. Postal Service suffer unsustainable losses that threaten its long-term viability until Congress acts," said Carper, who is chairman of the Senate Homeland Security and Governmental Affairs Committee. "As I've said time and time again, Congress and the administration need to come to agreement on comprehensive legislation that reforms, right-sizes and modernizes this American institution."
So Kbit, what is your point? I think we already explained the situation and as your quote says, until Congress changes the incredibly unfair laws against the US Postal service, the losses will continue. That again, isn't the USPS's fault..
Post Office is nothing more than a giant spamming machine. I get maybe two things a month via postal that are not spam. Ridiculous post office sells my physical address to spammers then charges the spammers to deliver to my address. I think we could easily survive without US Mail.
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
Sorry but USPS does not sell data. The only data they provide is CASS and NCOA. CASS is list of physical delivery addresses. It does not contain First, Last name. NOCA is National Change of address. When you move and fill out one of those cards to forward your mail it goes into a database for 12 months (I think). This data is all provided free of charge. Any company doing a bulk mail must run their data through CASS and NCOA databases to cut down on non-deliverable mail. USPS was losing a lot of money on non deliverable mail.
There are huge data warehouses which buy and sell data as their core business. These are multi million dollar business.
SPAM, junk mail, what ever you want to call it is huge money. Additionally, it is great for creating jobs. Over 20% of printed items are mailed. Printing is one of the last manufacturing industries where most of the jobs have not been shipped overseas. These are decent paying jobs since it is skilled labor.
I know because I sold printing and mailing services for 11 years.
@lipton80205 Okay wrong on selling data. Either way to result is the same as my mailbox is full of junk everyday. I could care less about jobs being created by bombarding with unsolicited mail. I hate in my email I hate in the mail. Difference is post office is the purveyor of much of it. There should be a form fill out one time at post office that stops all junk mail. But they won't because they make to much money on it.
Here is an interesting article on the post office causing issues for outbox note the quote by the postmaster general below about Junk mailers being the USPS customer.
"But instead, Evan recounts that US Postmaster General Patrick Donahoe “looked at us” and said “we have a misunderstanding. ‘You disrupt my service and we will never work with you.’” Further, “‘You mentioned making the service better for our customers; but the American citizens aren’t our customers—about 400 junk mailers are our customers. Your service hurts our ability to serve those customers.”’
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
Liquidcci, look at it this way, the spamers are supporting your cheap mailing prices. If you think that for less than 50 cents you could mail a letter across a continent, you should start a delivery business. UPS charges like $5.75 for the same...
Most people don't know or understand the issues. Sure there could be some changes like less delivery, but in every country the mail service is an important part of society. Until Congress starts to mess with it...
Platform: "I trade, therefore, I AM!"; Theme Song: "Atomic Dog!"
Trading: EMD, 6J, ZB
Posts: 796 since Oct 2009
I sometimes wonder when "they" quote numbers like that, whether that really is business lost or missed, or actually a net negative cash flow against expenses.
All my accounting class training suggests their expenses exceeded their revenues (traditional way of stating such), and this was as stated.
How?, are the taxpayers really funding them to that tune? Doesn't that then become a jobs program?, in its essence.
What would the landscape be like without the postal service?, whether or not it no longer seems high tech and current?
Platform: "I trade, therefore, I AM!"; Theme Song: "Atomic Dog!"
Trading: EMD, 6J, ZB
Posts: 796 since Oct 2009
MSNBC "The Ed Show", yesterday concluded with a segment by a representative of either the US Postal Union or another outside agency and he drew light on this subject
he stated that the Post Office has prefunded (according to Congressional approval) tens of millions, if not billions of dollars and shows this "funny accounting loss", so that public opinion will be swayed towards privatizing its operations and selling off its most desirable assets to others...
he also stated that the USPS is net positive of over $1,000,000,000 profitable year over year, and has been so for quite some time...
I searched their website for a direct link to that exerpt and such, but perhaps they have not loaded it up yet. So from time to time, search under "The Ed Show", on msnbc: news, video and progressive community. Lean Forward. and perhaps you too will see that segment and be able to challenge the voracity of his claims.
