The Postal Service reported a net loss of $1.3 billion on revenue of $17.5 billion in the second quarter of its fiscal year as its financial struggles continued.
Revenue was higher over the same time period last year by $235 million thanks to shipping and packages revenues growing by $445 million. First class and marketing mail declined, however, falling by a combined $181 million.
Package volumes grew by 5% and mail volumes declined by 2.1% compared to Q2 of last year reflecting ongoing trends in the industry.
“Despite growth in our package business, our financial results reflect systemic trends in the marketplace and the effects of an inflexible, legislatively mandated business model that limits our ability to generate sufficient revenue and imposes costs upon us that we cannot afford,” said Postmaster General and CEO Megan J Brennan.
She remained optimistic, however, adding, “With continued aggressive management and greater legal authority to respond to changes in our marketplace and to control our costs, the Postal Service can return to financial sustainability.”
Last year, the Postal Service reported a net loss of $562 million for the second quarter.
A significant portion of expenses for the Postal Service is costs for retirees. The Postal Service said that the cost of retiree health benefits increased by $236 million in Q2 due to changes in actuarial assumptions.
Legislative Proposals in Congress
Legislation has been introduced in both the House and the Senate of the current Congress to make significant reforms to the Postal Service and try to curtail some of its ongoing financial losses. (See the links at the end of the article for details on these bills)
One of the key components of both bills is to automatically enroll all eligible Postal retirees into Medicare, a proposal that has been met with some controversy.
Other ideas have been floated in Congress to help the Postal Service, such as allowing it to ship alcoholic beverages to better compete with UPS and FedEx.
So far, none of these bills have gained any serious traction in Congress.
