The U.S. Postal Service on Friday reported more than $8 billion in losses for the 2010 fiscal year while noting that mail volume continues to drop.
The postal service’s chief financial officer, Joe Corbett, said despite $9 billion in cost savings over the past two years and the elimination of more than 100,000 jobs, fundamental changes are needed in how the mail system works.
“We will continue our relentless efforts to innovate and improve efficiency,” he said. “However, the need for changes to legislation, regulations and labor contracts has never been more obvious.”
Among the changes the Postal Service is seeking is the ability to cut Saturday mail delivery.
Overall, First Class Mail volume continues to drop, a troubling trend because that accounts for more than half of the Postal Service’s revenue, according to postal officials.
First Class Mail dropped 6.6 percent in 2010, 8.6 percent in 2009 and 4.8 percent in 2008.
In announcing the financial results Friday, officials also said that questions remain about the Postal Service’s ability to make a $5.5 billion payment to prefund retiree health benefits. That’s a congressional mandate postal officials have long argued is onerous.
Frederic V. Rolando, president of the National Association of Letter Carriers, agreed. He said the announcement about the Postal Service’s finances comes as no surprise and underscores the need for changes.
“For the Postal Service to improve its financial situation, the government must let USPS manage its financial affairs in the most effective manner possible like any other business,” he said.
“Essential to that process would be for Congress to fix an onerous congressional mandate from 2006, which obligates the Postal Service to make annual payments of $5.5 billion to prefund future retiree health benefits.,” Mr. Rolando said. “No other institution in America, public or private, has to do this.”
In a statement announcing the financial results, postal officials attributed the increasing losses to “the recent recession, continuing economic pressures and migration of mail to electronic media.”
Officials said the losses occurred despite the elimination of 75 million work hours and record high levels of productivity for 2010.