- The Washington Times - Thursday, February 9, 2012

The U.S. Postal Service lost more than $3 billion during the last three months of 2011 as continued declines in volume of first-class mail wiped out good news about the shipping and packaging business.

The latest in a string of multibillion-dollar deficits renewed calls by the Postal Service for legislation from Congress that would allow the mail service to cut a day of home delivery and restructure health care costs.

Postmaster General Patrick R. Donahoe warned that without legislation, the Postal Service wouldn’t be able to hit its target of reducing costs by $20 billion by 2015.

“We do not want to be a burden to the taxpayers,” he said at a meeting of the Postal Service’s Board of Governors early Thursday in Washington.

The Postal Service doesn’t operate on tax dollars, relying on revenue from customers, but it has borrowed billions from the U.S. Treasury as its finances have grown worse in recent years.

The Postal Service’s chief financial officer, Joseph Corbett, said postal officials can cut about $10 billion without Congress, but needs legislation to reduce costs by another $10 billion.

Unsurprisingly, the losses were driven primarily by continuing declines in volume of first-class mail, which has dropped by 25 percent since 2006. Officials primarily blame the volume drop on the move toward online bill paying and email, though they say the economy has hurt business, too.

“Technology continues to have a major impact on our customers use of the mail,” Mr. Donahoe said. “While it has helped us grow our shipping business, it has had a significant negative impact on some of our much larger sources of revenue, particularly first-class mail.”

Shipping-services business grew 7 percent compared with the same period last year, with an increase of $179 million. But that wasn’t enough to offset declines of first-class mail.

Mr. Corbett warned that without “significant changes in the law,” the Postal Service would default on retiree and health benefit prepayments due to the federal government this year.”

Sen. Thomas R. Carper, Delaware Democrat and chairman of a subcommittee overseeing the Postal Service, called the financial results disappointing but hardly a surprise.

“While the magnitude of the losses themselves is bad enough, the fact that they came during a period of the year that is usually the most successful for the Postal Service is truly shocking,” said Mr. Carper.

• Jim McElhatton can be reached at jmcelhatton@washingtontimes.com.

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