Business

Post Office Reports $5.2B Loss

Post Office Reports $5.2B LossThe nearly bankrupt U.S. Postal Service on Thursday reported a quarterly loss of $5.2 billion and warned it will miss another payment due to the Treasury, just one week after its first-ever default on a payment for future retiree health benefits.

From April to June, losses were $2.1 billion more than during the same period last year.

The mail agency said it is being hurt significantly by mounting costs for future retiree health benefits. Those expenses made up $3.1 billion of the post office’s quarterly loss.

Declining first-class mail volume also contributed to losses.

“We have simply reached the point that we must conserve cash,” Thurgood Marshall Jr., chairman of the Postal Service’s board of governors, said in explaining the payment defaults. He cautioned that the mail agency may have to delay other payments if necessary but that day-to-day mail service will not be impacted in any way.

The Postal Service for months has been urging Congress to pass a Senate bill that would allow it to eliminate Saturday mail delivery and reduce the annual health payment of more than $5 billion. However, Congress has fought the bill because, they say, the cuts aren’t deep enough and it doesn’t allow for meaningful and long-term restructuring of the agency. After the House headed home for a five-week break, the post office defaulted on that payment.

The mail agency says it will miss the second $5.6 billion payment due on Sept. 30, also for future retiree benefits, as cash runs close to zero.

“We remain confident that Congress will do its part to help put the Postal Service on a path to financial stability,” said Postmaster General Patrick Donahoe. “We will continue to take actions under our control to improve operational efficiency and generate revenue by offering new products and services to meet our customers’ changing needs.”

Overall, the post office had operating revenue of $15.6 billion from April through June, the third quarter of its 2012 fiscal year. That was down a fraction from the same period last year. But quarterly expenses this year climbed to $20.8 billion, up 10 percent, largely driven by the health prepayments. The Postal Service is the only government agency required to make such payments.

Post Office Reports $5.2B LossThe Postal Service also has been hurt by declining mail volume as people and businesses continue switching to the Internet in place of letters and paper bills. The number of items mailed during the last quarter was 38.5 billion pieces, a 4 percent decrease, much of it in first-class mail.

On the positive side, the mail agency reported that it continued to lower costs by reducing work hours and boosting employee productivity. The Postal Service’s fast-growing shipping services, which include express and priority mail, had a 9 percent increase in operating revenue to $3.3 billion.

That strong growth in shipping services, which the mail agency is promoting as a cheaper alternative to FedEx and UPS, helped offset roughly three-fourths of the continuing declines in first-class mail, said Stephen Masse, the Postal Service’s acting chief financial officer.

The numbers bring the Postal Service’s year-to-date net loss to $11.6 billion, compared to $5.7 billion for the same period last year.

The agency has forecast a record $14.1 billion loss by the end of this year. Without legislative changes, it said, annual losses will exceed $21 billion by 2016.

The Senate passed a postal bill in April that would have provided financial relief in part by reducing the annual health payments and providing an $11 billion cash infusion, basically a refund of overpayments the Postal Service made to a federal pension fund. The House, however, remains stalled over a separate bill that would allow for aggressive cuts, including an end to Saturday delivery. Rural lawmakers, in particular, worry about the impact of closures in their communities.

The Postal Service originally sought to close low-revenue post offices in rural areas to save money but after strong public opposition it is now moving forward with a new plan to keep 13,000 open with shorter operating hours.

Follow Becket Adams (@BecketAdams) on Twitter

The Associated Press contributed to this report.

Comments (76)

1 2
  • dirtydog1776
    Posted on August 9, 2012 at 6:42pm

    “We have simply reached the point that we must conserve cash…….”

    It took them all the time to figure that out? What a bunch of idiots.

    Report Post » dirtydog1776  
    • ALL4FREEDOM
      Posted on August 9, 2012 at 7:42pm

      Well, they figured it out faster than Amtrak.

      Report Post »  
    • Tankboy2adfwd
      Posted on August 9, 2012 at 11:16pm

      The problem with the USPS is we can’t fart sideways without going through congress first. If every business had to get their business practices voted on by congress (you know, those folks who spend now and borrow later) they would all be screwed.

      Report Post » Tankboy2adfwd  
    • The_Almighty_Creestof
      Posted on August 10, 2012 at 3:35am

      @Tankboy2adfwd

      Congress is doing the right thing…they are channeling Scott Walker…they are saying “Sorry, no bandaids that will place you right back here next year…restructure it properly and deep enough so it works AND lasts.”

      I applaud the HOUSE…it would be too easy to sign and just kick the can down the road another year or two.

      Report Post »  
    • SCREW-WINDOWS
      Posted on August 10, 2012 at 11:38am

      Don’t cry postal workers unions eat their own and it looks like your about to be eaten.

      Report Post » SCREW-WINDOWS  
    • SCREW-WINDOWS
      Posted on August 10, 2012 at 11:40am

      Early buyouts to hire someone new and end up paying both new and the bought out real smart union logic.

      Report Post » SCREW-WINDOWS  
    • Curioso
      Posted on August 10, 2012 at 3:58pm

      I don’t have a problem with the postal service going in the hole. It would be nice if they could work out a way to break even on mail delivery without increasing the mail rates to much. We have one of the best and fastest mail delivery systems in the world at the cheapest costs to the users. And 5-6 billion dollars for this service is a fair exchange in my book.

      Report Post »  
  • no1hd
    Posted on August 9, 2012 at 6:41pm

    Check 381@@, mine is 38125, area and see what they do..The laziest, most arrogant people on earth..The employees have no fear – we pay them win or lose – no more how they do..Shut it down as is, cancel retirement payments, layoff all current employees and turn it over to a coalition with FEDEX and UPS as the managing agency..They are an embarrassment to the US..

    Report Post »  
    • psychosocial1
      Posted on August 9, 2012 at 7:09pm

      If ignorance is bliss you must be the happiest person in the world. It is possible that an individual could cram all of your knowledge of the Postal Service into a very small thimble. Did you know that the UPS and USPS have work sharing agreements. The USPS actually delivers many UPS packages especially in rural areas. WHY? It is more cost effective for UPS to give those packages to USPS carriers than to deliver the packages themselves. That is correct. UPS can choose which packages are most cost effective to deliver, thereby minimizing their operating costs. Plus, UPS workers are represented by the Teamsters union. Love that fact.

      Report Post » psychosocial1  
    • lukerw
      Posted on August 9, 2012 at 7:55pm

      @PSY…
      The Problem is with… Retirement Benefits… which causes All Losses!

      Report Post » lukerw  
  • woodyee
    Posted on August 9, 2012 at 6:37pm

    Obammy will let the US Postal Service squirm until just a bit before the election – then he’ll count on their vote after his “rescue”…

    …like he‘s counting on Commie Trumpka’s illiterate goons to drum up the vote, and the votes of his illegally amnestied illegal aliens, and the votes of the union thugs he rescued in Detroit with our tax dollars…

    Nothing like a DemonicRat demagogue to bring a good Country down…

    Report Post » woodyee  
  • JACKTHETOAD
    Posted on August 9, 2012 at 5:19pm

    Here’s my surprised ass…@

    Report Post » JACKTHETOAD  
  • ColoradoMaverick
    Posted on August 9, 2012 at 4:55pm

    Maybe Bain Capital can save them?????

    Report Post » ColoradoMaverick  
  • ColoradoMaverick
    Posted on August 9, 2012 at 4:54pm

    The reason:

    Big Labor.

    They will destroy this country IF we allow it.

    Report Post » ColoradoMaverick  
    • SCREW-WINDOWS
      Posted on August 10, 2012 at 11:50am

      Don’t forget ******** and Tree Huggers many fine paper is a cotton blend and I believe they pay cotton farmers not to grow their crops.

      Report Post » SCREW-WINDOWS  
  • nobull14
    Posted on August 9, 2012 at 4:47pm

    The post office .What a joke they took the clocks out of the post office so people would not complain as much because it was taking them too long to wait on the people. Both the ups and fed ex run circles around the government run post office. that’s why they are 5.2 billion loss this year ?

    Report Post »  
  • marcus_arealius
    Posted on August 9, 2012 at 4:25pm

    Explain this to me US Post Office – I ordered a small 1 lb item on ebay, shipping cost $4. It originated in Stockton CA (yes crime city) to Pleasanton CA. The USPS tracking over the next 6 days showed it going to Anaheim first, then back up to Richmond then to Pleasanton. That’s over 810 miles of inexplicable travel when the distance is under 50 miles for a net waste of 760 miles of fuel, wear and tear on the vehicle and wages for the driver’s salary. If this is multiplied by millions of packages throughout a year, the waste adds up. I would hope this is not a typical case.

    Report Post »  
    • Conservative2
      Posted on August 9, 2012 at 4:46pm

      Get rid of the Union and you’ll get rid of most of the problems and lack of efficiencies.

      Report Post » Conservative2  
  • KickinBack
    Posted on August 9, 2012 at 4:20pm

    Neither snow, nor rain, nor heat, nor gloom of night…until the progressives took over, now our cash is just a little bit tight…

    Report Post » KickinBack  
    • encinom
      Posted on August 9, 2012 at 4:31pm

      Wasn’t the Progressives, but the GOP that passed a law forcing the Post Office to fully pre-fund its retirement program for the next 70 years. If allowed to operate and fund its retirement is a way that makes fiscal sense the Post Office is profitable, but the GOP can not have a Government Agency that works, looks bad for their narrative so they seek to destroy it with useless laws.

      Report Post »  
    • KickinBack
      Posted on August 9, 2012 at 5:16pm

      Progressives aren’t limited to Democrats.

      Report Post » KickinBack  
    • yougottabekidding
      Posted on August 9, 2012 at 8:51pm

      encinom
      Man you are so right!

      Why in the hack would we want future costs to be funded? Lets just keep doing the stupid thing.
      I do that all the time. I figure I’ll wait till I retire to put money away that works every time.

      Report Post »  
  • FaithfulFriend
    Posted on August 9, 2012 at 4:16pm

    More like the USPC.

    All I have to offer is this… The postman has no problem opening the door on the mailbox to put mail in but seems to be wholly incompetent to fully close the door afterwards. So when it rains the mail gets soaked. This mindset is throughout any government run service.

    And speaking of the mail, has anyone else taken note of Sprint’s cell phone bills being mailed in this contraption of an envelope where they note the saving of the planet and want you to rip the envelope along the guides so you can use the same envelope to mail in your payment. Hence… no second envelope? Well for the time it takes to do this nonsense I put the ripped up mangled pieces of paper back in with my check and write “thought you’d want to recycle these too” on them.

    Report Post » FaithfulFriend  
  • chips1
    Posted on August 9, 2012 at 3:54pm

    If the post office eliminates delivery on Saturday, where will they store all of the AARP and Refinance notices?

    Report Post »  
    • iguana
      Posted on August 9, 2012 at 4:09pm

      The same place they will store that package you were expecting to be delivered on Saturday, but you won’t get it until the beginning of the next week. Along with your junk mail. All will be slowed (or slower than usual.)

      Report Post »  
  • NOBALONEY
    Posted on August 9, 2012 at 3:50pm

    Congress is to blame, and once again the Democrates want it as an issue to deflect from the miserable Obama Presidency! Canada and U S postal rates for first class were both 32 cents in 1995. Since then there has been a difference of 11 to 16 cents. Today, it costs 45 cents to mail a letter in the U S in Canada it’s 61 cents. That may seem small, but it’s part of the problem, remeber it’s Congress that regulates the cost of Postage.

    Report Post » NOBALONEY  
    • encinom
      Posted on August 9, 2012 at 4:32pm

      Its the Republicans that pass a law requiring the Postal Service to fully pre-fund its retirement program for the next 70 years. Without this burden the Post Office is profitable.

      Report Post »  
    • psychosocial1
      Posted on August 9, 2012 at 6:36pm

      @ Encinom
      Notice in the piece that the Democratically-controlled Senate has passed a bill, while the Republican-controlled House has failed to do so. The Republicans passed the bill requiring the prefunding obligation also. All thinly veiled attempts to bust the unions. I often wonder why so many “average joe” working folks that are also self-labeled conservatives hate unions. Is it because the talking heads they listen to for hours a day tell them unions are bad? Perhaps it is the real “class warfare” being waged by these same conservative talking heads that love to point out that union workers get more in pay and benefits than non-union workers. This is the worst kind of “class warfare”, because the rich are getting the middle class to destroy itself all while promoting ideas that have created a race to the bottom.

      Report Post » psychosocial1  
  • chips1
    Posted on August 9, 2012 at 3:49pm

    It’s not really a bad job. Minimum wage and all you can steal.

    Report Post »  
  • Detroit paperboy
    Posted on August 9, 2012 at 3:40pm

    More government overpaid underworked leeches, but don’t worry, we can print more cash and bail em out..”….idiots

    Report Post »  
    • ItsMeAgain
      Posted on August 9, 2012 at 4:28pm

      Fact: The USPS is self-funding. All revenues come from postage.
      Fact: The congress created this problem in 2006 by requiring the USPS to PRE-FUND its retirement 75 years into the future in 10 years. NO OTHER GOVT AGENCY or PRIVATE SECTOR BUSINESS has this requirement. Most of the “retirees” haven’t even been hired yet. Some haven’t been born.
      Fact: 15.6 billion Revenue 2nd Qtr – 20.8 billion loss = 5.2 billion Required pre-pmt: 5.6 billion

      It won’t be a “bailout” to get back to fair retirement funding methodology funded by postal revenue.

      Report Post » ItsMeAgain  
    • encinom
      Posted on August 9, 2012 at 4:33pm

      Idiot the Post Office receives ZERO TAX DOLLARS. You are just another bitter Tea ****** that wishes to bring fellow Americans down.

      Report Post »  
    • Detroit paperboy
      Posted on August 9, 2012 at 5:31pm

      Encicom, they don’t have anything to worry about then, let them sink or swim……and by the way, why haven’t you moved your butt to north Korea…………it’s a democrat paradise……leech that you are, you would the government rice rations, any reason not to put in a hard days work, like any good liberal…

      Report Post »  
    • SCREW-WINDOWS
      Posted on August 10, 2012 at 11:58am

      The neccessity to fund retirement is legit would you hire a expostal worker ?

      Report Post » SCREW-WINDOWS  
  • www.TopTheNews.com
    Posted on August 9, 2012 at 3:39pm

    Well, the taxpayer covers the missed Treasury payments…

    I’m almost indifferent at this point. Money seems to be endless to the government.

    Report Post » www.TopTheNews.com  
  • Mutiny
    Posted on August 9, 2012 at 3:36pm

    Congress caused this problem. One day people will realize as Reagan said the government is the problem, not the solution.

    Get the hint Romney?? We dont need you to “repeal and replace” your crappy ass health care bill. Do us a favor and step down now so we can get rid of Obama.

    Ben Swann breaks down the problems with the post office here in plain English.
    http://www.fox19.com/story/19173914/reality-check-is-congress-the-real-problem-with-the-post-offic

    Report Post » Mutiny  
  • heavyduty
    Posted on August 9, 2012 at 3:30pm

    Don’t you wish you owned a business where you could just skip payments to your creditors and keep doing business. That would solve bankruptcies in a heartbeat. They need to go out of business and privatize.

    Report Post »  
    • MODEL82A1
      Posted on August 9, 2012 at 3:38pm

      They’ve already been “Privatized”. It’s call FedEx and UPS. The rest of the USPS is 100% Obsolete.

      Report Post » MODEL82A1  
    • soybomb315_II
      Posted on August 9, 2012 at 5:06pm

      @Model
      You never make much sense. And when you don’t include a random criticism of Ron Paul, people have no clue what you are talking about

      What do you mean USPS has been privatized? How are they ‘obsolete’….Did you know USPS has a monopoly on first class mail? That monopoly carries with it a bunch of other strings

      Report Post » soybomb315_II  
  • Want our country back
    Posted on August 9, 2012 at 3:19pm

    I’m trying to help the post office find BILLIONS in unclaimed money,
    CHECK THIS OUT: O’Reilly Tip (USA & Canada)

    http://www.unclaimed.org/

    Report Post » Want our country back  
  • kpeters59
    Posted on August 9, 2012 at 3:19pm

    Now they’re going to conserve cash?

    Good idea!

    Report Post »  
  • The_Jerk
    Posted on August 9, 2012 at 3:18pm

    The U.S. Postal Service has been used as as a social engineering project and not run as a business. Doomed to fail.

    “According to Philip Rubio, author of There’s Always Work at the Post Office: African American Postal Workers and the Fight for Jobs, Justice and Equality, by 1970, blacks made up one-fifth of the postal workforce and “were twice as likely to work at the post office than whites,” … .”

    http://thegrio.com/2011/08/15/post-office-cuts-could-deliver-a-blow-to-the-black-community/

    Report Post »  
  • BeckIgnoresConstitution
    Posted on August 9, 2012 at 3:15pm

    Best stamp idea. – “If you voted for Obama to prove you’re not a racist,
    you‘ll have to vote for someone else in 2012 to prove you’re not an idiot.”

    Obama loathes our Constitution. He cannot be trusted.

    “We hold these truths to be self-evident, … that they are endowed by their Creator with certain unalienable Rights, … Life, Liberty and the pursuit of Happiness.” – Declaration of Independence

    Obama routinely omits ‘Creator’ when speaking of unalienable rights.

    No “Creator” = no unalienable rights!

    Conservatives must stop omitting Art 2, Sec 1, of the Constitution when speaking of Obama!

    “The usurper Obama is not eligible for multiple reasons including:
    1. Failure to be a “natural born citizen” as required by Article 2, Section 1.
    2. Being born a British citizen pursuant to British Nationality Act of 1948.
    3. Law enforcement investigators have concluded his birth certificate is fraudulent.”[1]

    1. http://www.ObamaBirthCertificate.net

    Report Post » BeckIgnoresConstitution  
  • EqualJustice
    Posted on August 9, 2012 at 3:14pm

    I remember when BO said this: “UPS and FedEx are doing just fine, right? It‘s the Post Office that’s always having problems.” –attempting to make the case for government-run healthcare, while simultaneously undercutting his own argument, Portsmouth, N.H., Aug. 11, 2009″” HAHAHA He was right about ONE thing, anyway?

    Report Post » EqualJustice  
  • LIBSALWAYSLIE
    Posted on August 9, 2012 at 3:13pm

    The government runs things so well we should let them take ove healthcare!

    Report Post » LIBSALWAYSLIE  
    • Snowleopard {gallery of cat folks}
      Posted on August 9, 2012 at 3:18pm

      Sarcasm duly noted – now its time to either make the post office work on its own or dump it and then privatize the system.

      Report Post » Snowleopard {gallery of cat folks}  
    • Verceofreason
      Posted on August 9, 2012 at 3:26pm

      Yo haven’t a clue.
      If Republicans could privatize farting to make profit they would.

      Report Post » Verceofreason  
    • MODEL82A1
      Posted on August 9, 2012 at 3:33pm

      VERC just condensed the entire Lefty philosophy into two short sentences. A $5 Billion QUARTERLY loss by Government is preferable to ANY Republican Earning a Profit in the private sector. Thanks, VERC, couldn’t have been more succinct myself.

      Report Post » MODEL82A1  
  • MODEL82A1
    Posted on August 9, 2012 at 3:13pm

    If only the U.S. Postal Service had access to publicly built Roads and Bridges, then they’d be successful!

    Report Post » MODEL82A1  
    • Lothmar
      Posted on August 9, 2012 at 3:37pm

      I was about to ask how they delivered the mail then, but then I remembered sidewalks. ~chuckle~ Would certainly explain some of the extra hours and time it takes to deliver mail.

      Report Post »  
    • Ben__Franklin
      Posted on August 9, 2012 at 4:00pm

      LoL, A 5 Billion Quarterly loss that will add up to a minimum of a 20 Billion yearly loss. The US Postal Service, now there is a business the Government did build. Congratulations Berry! and Happy Birthday!

      Report Post »  
    • psychosocial1
      Posted on August 9, 2012 at 6:42pm

      @ Ben Franklin
      I’m sure you will be completely ignorant of the irony of your statement. Allow me to enlighten you. The Post Office is mentioned in the Constitution. It is actually one of the enumerated powers given to the government. Additionally, the delicious irony of your comment comes from the fact that Benjamin Franklin created the agency and was the first Postmaster General of the United States.

      Report Post » psychosocial1  
    • psychosocial1
      Posted on August 9, 2012 at 7:00pm

      @ Conservative2
      You should get off of this site and do some research. Look up the history of the NALC. The letter carriers union has been around since 1889. Not a typo. Over a century. Perhaps from there you could check into the reorganization act of 1971 or reform bill in 2006. The agency has been told it must run like a normal business while still being subjected to complete Congressional oversight. No real structural changes can be made without approval from Congress. If you are still confused after all of that maybe you could do a couple of days with your letter carrier. There is nothing like an 8 or 9 mile walk through a foot of snow with windchills hovering near 0 degrees or the same walk in 100+ degree heat with heat index readings over 115.

      Report Post » psychosocial1  
  • blanco5
    Posted on August 9, 2012 at 3:12pm

    Do you remember when the post office was always self-contained and successful? What happened?

    Report Post »  
    • Verceofreason
      Posted on August 9, 2012 at 3:25pm

      The governmant made them fund 75% of their pension fund in a decade.
      It‘s wasn’t possible and the Republicans knew that.
      That‘s were all the PO’s profit went. This was a grand Republican plan to force the PO into privatization. So we can all get LESS service for a $1 first class stamp.
      WE now have the MIC, the PIC and in a few tears the USPSic.

      Report Post » Verceofreason  
    • downhillmike
      Posted on August 9, 2012 at 4:28pm

      What happened?
      Government employees = incompetence, greedy, no work ethic, (see Amtrak losing millions to emplyee thefts and government agencies duplicating each other’s work)
      Unions = lifetime employment with no accountability, no work ethic, retirement benfits that make it more profitable to retire than work, can’t be fired for incompetence (of course 90% of PO employees would have to be fired)
      Poor Management = ever been to a PO with 6 windows, 1 open, and 10 people in back smoking and joking? When haven’t you?
      No accountability = Since when did the PO have to make it on their own and be accountable for spending and “profitabiity” – not since the 70‘s when Carter’s administration set up the hiring quotas for social engineering
      Do I need to go on? This is the epitome of a government run organization and poeple want to turn over our health care system to these yahoos!?

      Report Post »  
    • Conservative2
      Posted on August 9, 2012 at 5:02pm

      Yup, that was before it was Unionized, they have a way of dragging down their employers.

      Report Post » Conservative2  
1 2

Sign In To Post Comments! Sign In

Sign Up For Our Newsletter!

Glenn Beck Radio

Listen to Glenn Beck 24/7 Listen Now
Restoring Love