The U.S. Postal Service ended the June 30, 2014, quarter with a net loss of $2.0 billion, compared to a net loss of $740 million for the same period last year. The Postal Service 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.
The Postal Service boosted revenue 2% to $16.5 billion in the quarter ending June 30. The improvement was due mainly to growth in its package-delivery business, which saw revenue rise 6.6% to $3.19 billion as postal customers increased their online spending.
Shipping and Package revenue was up 6.6 percent. Standard Mail revenue was up 5.1 percent, driven by a 0.9 percent increase in volume and the January 2014 price increase. First-Class Mail volume was down 1.4 percent, but the January price increase offset this decline, resulting in a 3.2 percent revenue increase.
“We’re seeing momentum in our package business and continued use of direct mail as an advertising medium,” said Postmaster General and Chief Executive Officer Patrick Donahoe. “We’ve been effective in developing and marketing our products, and we’re improving how we leverage data and technology—all providing a higher return on mail for many customers and causing them to take a fresh look at the Postal Service.”
The USPS said its total liabilities were $67.16 billion at the end of the period, compared with $23.16 billion in assets. The Postal Service reached its $15 billion credit limit with the Treasury Department in 2012.
Speaking on the news of the reported staggering losses, House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA) said:
“The Postal Service’s latest reported loss illustrates the urgent need for postal reform to prevent a taxpayer funded bailout of the Postal Service. Unfortunately, some in Congress still have not come around to the need to allow the struggling institution to right size itself. In fact, just last week, 22 Senators asked for a renewed moratorium on mail processing facility consolidations, consolidations that would enable the Postal Service to save hundreds of millions of dollars each year. In the House, Oversight Committee Democrats even refuse to support the President’s own postal reform plan. Additionally, next month the Postal Service will default on a $5.7 billion payment to the U.S. Treasury to fund retiree health care costs. This will be the fourth straight year in which the Postal Service has defaulted; together these defaults will cost taxpayers $22.4 billion.”
Additional highlights from its Q3 report compared to the same period last year include:
- Total mail volume of 37.7 billion pieces compared to 37.8 billion pieces
- Shipping and Package volume increased 7.7 percent.
- Standard Mail volume increased 0.9 percent.
- First-Class Mail volume declined 1.4 percent. This was the 32nd consecutive quarterly decline for First-Class Mail volume.
- Operating revenue of $16.5 billion increased $327 million or 2.0 percent.
- Operating expenses before non-cash Workers’ Compensation and Postal Service Retiree Health Benefit Fund expenses of $16.5 billion increased from $16.3 billion, a 1 percent change.