USPS Loses $3.1 Billion in Third Quarter
The United States Postal Service (USPS) ended its third quarter of fiscal year 2011 (April 1 to June 30) with a net loss of US$3.1 billion, compared to a net loss of US$3.5 billion for the same period in fiscal 2010. Total mail volume declined to 39.8-billion pieces for the quarter, compared to a decline of 40.9-billion pieces in the third quarter of 2010.
Despite major cost reductions and the enactment of various revenue-growth initiatives, the USPS projects its cash shortfall will have reached its statutory borrowing limit by the end of the fiscal year. Without legislative assistance, the postal service will be forced to default on payments to the Federal government – a US$5.5 billion mandated prepayment is due in September.
Net losses for the USPS’ past nine months, ended June 30, amount to US$5.7 billion in 2011 compared to $5.4 billion in 2010.
“We continue to take aggressive actions to reduce costs and bring the size of our infrastructure into alignment with reduced customer demand,” said Postmaster General and CEO, Patrick Donahoe.
The postal service announced plans on July 25 to identify nearly 3,700 under-utilized post offices for possible closure and introduced the Village Post Office concept. Village Post Offices would be operated by local businesses, such as pharmacies, grocery stores and other appropriate retailers, and would offer postal products and services such as stamps and flat-rate packaging.
USPS work hours were reduced by 9.2-million hours or 3.1 percent in the third quarter compared to the same period a year ago. During the first nine months of 2011, 2.8 percent fewer work hours were used compared to 2010. The third quarter saw the voluntary retirement of more than 1,850 administrative employees as part of an ongoing restructuring initiative.
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