Losses Continue to Mount for the USPS
WASHINGTON, DC — The U.S. Postal Service ended its second quarter (Jan 1 – March 31) with a net loss of $1.9 billion, as the economic recession and longer-term financial pressures, such as the diversion of letter mail to electronic alternatives, continued to reduce mail volume and revenue. Despite aggressive actions to reduce costs and grow revenue, the Postal Service will likely face a cash shortfall of over $1.5 billion at the end of the fiscal year.
The Postal Service has incurred net losses from operations in 10 of the last 11 fiscal quarters. The year-to-date net loss is $2.3 billion, compared to a loss in the same period last year of $35 million. A significant portion of the losses over this period can be attributed to an unprecedented decline in mail volume. In the second quarter, mail volume totaled 43.8 billion pieces, down 7.5 billion pieces, or 14.7 percent, compared to a year ago.
The second-quarter results include operating revenue of $16.9 billion, a decrease of nearly $2 billion, or 10.5 percent, from the same period last year, and operating expenses of $18.8 billion, a reduction of $782 million, or 4.0 percent, from the second quarter of last year. Complete second-quarter results are contained in the Postal Service Form 10-Q report, available later today at usps.com/financials (click Form 10-Q under Quarter Reports) and also attached at the end of this release.
“The economic recession has been tough on the mailing industry, and we have seen an unprecedented decline in mail volumes and revenue that continued to accelerate during the second quarter,” said Postmaster General John Potter during today’s Board of Governors meeting. “We are aggressively realigning our costs to match the lower mail volumes, while also maintaining the high level of service and reliability our customers expect. We are also taking a number of steps to grow revenue.”