The U.S. Postal Service loses money during its second
quarter, despite an increase in package revenues and an emergency price hike
that took effect in January. The agency said on Monday that it lost $2 billion
from April to June, compared with a net loss of $740 million in the same period
last year, and a $1.9 billion loss in its first quarter.
An increase in its shipping and package business helped the
agency see a 2 percent rise from last year in its total operating revenues to
$16.5 billion. USPS has focused on its shipping and package business and
expanded to Sunday package delivery as more people shop online and need a
service to deliver their purchases.
The volume of its most profitable product, first-class mail,
fell 1.4 percent as more people communicate electronically, but the temporary
rate increase, to mitigate the effects of the recession, helped offset the
losses by bringing a 3.2 percent rise in revenues for that product.
The jump in losses was largely due to a $1.5 billion
increase in operating expenses as a result of workers compensation payments. USPS
blames much of its financial troubles on a 2006 mandate to stow away billions
of dollars for its future retirees' healthcare. The Postal Service already
defaulted on three of its payments into the fund and does not expect to make
the next $5.7 billion installment due September 30.
USPS and postal unions have so far failed to coax U.S.
lawmakers to allow it to modify its business, including eliminating or
modifying the future retirees' health fund. The agency also wants Congress to
authorize it to limit door-to-door delivery and to cut Saturday mail delivery,
but those plans have been blocked by some unions and lawmakers who say it would
hurt their communities.
Despite the red ink, the latest announcement showed an
improvement from 2012 when USPS lost $15.9 billion that year. Many in the
industry point to these improvements as a sign that the agency does not need to
make the drastic service cuts it has sought.
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