Postal Service Ends Third Quarter With $2B Loss

Image: Postal Service Ends Third Quarter With $2B Loss (Andrew Burton/Getty Images)

Monday, 11 Aug 2014 03:30 PM

By Jennifer G. Hickey

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Despite a 2 percent boost in revenue, the U.S. Postal Service ended the third quarter with a $1.96 billion loss, the agency announced Monday.

The USPS said the increased revenue derived from a price increase instituted in January, sales and marketing initiatives, and its package business, which experienced a revenue increase of 6.6 percent to $3.19 billion.

Total operating revenue increased by $327 million to $16.5 billion.

Chief Financial Officer and Executive Vice President Joseph Corbett said that while the Postal Service has been "extremely conservative" with its spending, it will need to "invest up to $10 billion to replace our aging vehicle fleet, purchase additional package sorting equipment, and make necessary upgrades to our infrastructure."

Corbett also warned that the USPS would be unable to make a required $5.7 billion retiree health benefit prefunding payment to the Treasury, due by Sept. 30.

"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," said Fredric V. Rolando, president of the National Association of Letter Carriers, The New York Times reports.

The USPS recently posted in the Federal Register a closure proposal that would begin in January 2015, including changing from the current one-day service standard for first-class local mail delivery to two days and closing or consolidating 82 mail processing facilities across the country.

Before leaving for an August recess, more than 20 senators sent a letter to the Senate Appropriations Committee seeking to impose a one-year moratorium on those plans.

The senators say the closures would result in the loss of 15,000 postal jobs.

The Postal Service has closed 141 processing plants since 2012, when it began implementation of a previously delayed streamlining plan, according to Government Executive.

The USPS has recorded a loss in 21 of the last 23 quarters, the excepted quarters being the two in which Congress rescheduled the Retiree Health Benefits prefunding payments.

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