The U.S. Postal Service ended its third quarter with a $5.2 billion net loss, a 68 percent decrease compared to a loss of $3.1 billion for the same quarter of the prior fiscal year.
A large contributor to the loss in the three months that ended June 30 was a $3.1 billion expense for legislatively mandated prefunded retiree health benefits, according to a news release.
Along with a continued decline in first-class mail volume, expenses offset a 9 percent increase in revenue from shipping services and package delivery, which totaled $3.3 billion on a volume increase of 43 million pieces.
Third-quarter financial notes:
- The postal service's total mail volume decreased 3.6 percent to 38.5 billion pieces compared to the same quarter a year ago.
- Operating revenues were $15.6 billion, a decrease of about $153 million.
- Operating expenses increased by 10.2 percent to $20.8 billion.
Factoring in third-quarter results, the USPS' year-to-date net loss was $11.6 billion, compared to a $5.7 billion loss for the same time period of the previous fiscal year. For the year, the USPS has paid $9.2 billion for the prefuding of retiree health benefits, the release said.
For those benefit payments, the USPS
defaulted on an Aug. 1 payment of $5.5 billion due to the U.S. Treasury, and the organization expects to miss a second payment of $5.6 billion due Sept. 30 without legislative intervention.
The USPS is predicting continued losses until Congress makes changes in line with the Postal Service Business Plan, which includes:
- an $11 billion refund of pension plan overfunding to pay down debt and invest for future growth;
- a transition to a five-day mail delivery schedule; and
- the elimination of prefunding for retiree health benefits by introducing a postal health insurance program independent of current federal programs.
