USPS loses $1.3B in first quarter
The Postal Service ended the first quarter of fiscal 2013 with a $1.3 billion loss and its Board of Governors called for the service to accelerate proposed cost cutting measures.
At a board meeting on Friday, USPS Chief Financial Officer Joe Corbett said the loss was not as deep as the $3.3 billion loss in the same quarter the year before, and that this was due to seasonal increases in package shipments and record political mail from the presidential election.
Operating revenue remained flat at $17.7 billion but operating expenses decreased 9.8 percent compared to the first quarter of fiscal 2012, falling from $20.9 billion to $18.9 billion.
Corbett said the first quarter is typically the service's strongest and warned that these results cannot sustain the service throughout the fiscal year without operational changes and Congressional support.
Chairman Mickey Barnett said that the board has directed USPS management "to accelerate restructuring activities to reduce costs and to run this organization like a business." Barnett said there was one point in fiscal 2012 that the Postal Service "had only four days' [worth] of cash available to fund operations."
Postmaster General Patrick Donahoe said the service will aggressively pursue cost cutting measures including a planned 5-day delivery schedule for mail, which he expects will save $2 billion annually.
On Feb. 6, Donahoe announced plans to start a 5-day letter delivery schedule beginning Aug. 5, though package delivery will remain on a 6-day schedule. He said USPS believes it can lawfully move to that schedule after consulting with in-house legal counsel, but that the August start date gives Congress ample time to raise any concerns and work with USPS to resolve them.
Donahoe also asked for legislation to provide commercial flexibility for USPS. "We think there is broad acknowledgement in Congress" that the legislation is needed soon, he said.
The service declined in response to a request to comment whether Donahoe consulted with congressional leaders before announcing the letter delivery cutback
"It is anticipated that most members of Congress will understand the urgent need to implement this changing," said USPS spokesperson David Partenheimer. "The current continuing resolution which directs us to deliver six days a week expires in March. We won't implement the new scheduled until August."
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