Federal Daily News
In spite of some gains, USPS losses continue
While the U.S. Postal Service reported higher shipping revenues during the holiday season, the increase barely dented losses in the first quarter of fiscal 2012.
For the fiscal quarter ended Dec. 31, USPS posted a net loss of $3.3 billion on operating revenue of $17.7 billion, compared to a net loss of $329 million on operating revenue of $17.9 billion in the same quarter of fiscal 2011.
In a press statement, USPS reiterated its expectation that large losses will continue until the Postal Service “has implemented its network re-design and down-sizing and has restructured its healthcare program.”
“Additionally,” USPS stated, “the return to financial stability requires legislation which gives the Postal Service typical commercial freedoms, including delivery flexibility, returns over $10 billion of amounts overpaid to the federal government and resolves the need to prefund retiree healthcare at rates not assessed any other entity in the United States.”
There was one bright spot in the quarter. Stronger than expected holiday shipping activity, driven by “strong growth in online merchandise sales and successful USPS marketing efforts,” helped bolster the Postal Service’s competitive shipping services business. USPS posted quarterly shipping services revenue of $2.8 billion—an increase of $179 million over last year’s quarter.
But those gains were offset by—among other things—a $650 million decline in First Class and Standard mail. Ongoing migration of transactions to electronic delivery continued to be at the root of the decline in First Class revenue, USPS said.
“Technology continues to have a major impact on how our customers use the mail,” said Postmaster General and CEO Patrick Donahoe. “Revenue from shipping services represents about 17 percent of total revenue and, even with continued growth, cannot fully offset the decline in First Class mail revenue.”
USPS reported continued reductions in controllable costs in the quarter, trimming 8 million work hours compared to the same quarter in fiscal 2011. It also reported a $180 million decrease in total compensation and benefits expenses compared to the 2011 quarter.