U.S. Postal Service Loses $3.3 Billion In Just Three Months

* Postal Service says mail volume down 6 pct

* Package business grew due to holiday shopping

* Agency lost $5.1 bln last fiscal year

WASHINGTON, Feb 9 (Reuters) - The U.S. Postal Service reported a net loss of $3.3 billion in its first quarter as plummeting mail volumes overshadowed stronger than expected holiday shipping, the cash-strapped agency said on Thursday.

The mail carrier has watched its traditional business erode as increasing use of email and online bill-paying drain mail volumes. The Postal Service lost $5.1 billion last year.

In the first quarter of fiscal 2012, which ended on Dec. 31, total mail volume dropped 6 percent. The Postal Service said declines in first-class and standard mail revenue outweighed a boost to the package business from growth in online shopping.

Total revenue fell 1.1 percent to $17.7 billion, the Postal Service said.

"Technology continues to have a major impact on how our customers use the mail," Postmaster General Patrick Donahoe said. "While it has helped us grow our Shipping Services businesses, it has had a significant negative impact on some of our much larger sources of revenue."

The Postal Service said it expects large losses to continue unless it sees results from a plan to close thousands of facilities and restructure its healthcare program. The agency said it needs to reduce operating costs by $20 billion by 2015.

The agency repeated calls to Congress to allow it to tap into a retirement-fund surplus and expand into new businesses, as well as eliminate a massive annual payment to prefund retiree health benefits.

The Postal Service, which relies on sales of stamps and other products rather than taxpayer dollars, said it likely will default on this year's prefunding payment and could hit its debt ceiling this fall.

Comments

[Parl Guthrie]

11:20 PM on 02/22/2012

The Postal Service will be out of business unless our leaders do something soon.

http://c-spanvideo.org/program/ServiceFina
http://c-spanvideo.org/program/FutureofthePos

PMG Patrick Donahoe and Postal Governor Jim Miller are correct when they say that the Postal Service needs systemic changes. No more band aids to fix our problems. The world has changed and USPS needs to change with it.

1. Keep USPS a semi-quasi government agency, but give them an opportunity to compete in a free market without restrictions. Privatizing the Postal Service will only result in higher prices and less coverage.

2. Change the laws regarding who oversees the Postal Service. Eliminate Congress and the Postal Regulatory Committee from the equation.

3. Dissolve the old part-time 11 member Postal Board of Governors and establish a new full-time 8 member Postal Board of Governors. Give them total responsibility for all decisions including the price of a Postage Stamp. Let the board's decisions decide their future.

4. Appoint Postal Governor Jim Miller as the chairman of the new full time board. Since Mr. Miller is the Chairman of the Audit & Finance committee, and isn't afraid to speak out and have a different opinion than the other board members, he would be the best choice.

We have a Do-Nothing Congress. The entire country is on hold until our leader can work with both parties. We need to take the bull by the horns and do what needs to be done ASAP. .

[Parl Guthrie]

11:29 PM on 02/22/2012

PS: The suggestion above is my recommendation, but no one will ever consider it!
Parl

[thedragonclaw]

08:58 AM on 02/15/2012

Well they also lost my package...which was supposed to be a Valentines gift and birthday presents from my wife. Made it from Japan to SF in 2 days...passed through customs in a matter of hours...then vanished when it made it to the post office in Oakland (about 20 minutes from home). Called with the tracking number and the person I talked to at customer service obviously wasn't concerned a bit and simply said "well, these things happen, we'll get back to you if we find anything you may want to call again in 5-10 working days if you don't hear from us"

[vetxcl]

04:26 PM on 02/13/2012

Radical baggers are working to continue their war on government, by siphoning off funding and undercutting it's capabilities.

Clearly baggers favor anarchy.

[vetxcl]

04:24 PM on 02/13/2012

Nope. The USPS is not broke: http://www.thenation.com/blog/166103/post-office-not-broke

[lenidgman]

09:39 AM on 02/13/2012

commented

[trron9]

08:54 PM on 02/12/2012

As the post office continues to lose huge amounts of money I'd like to see the government turn to successful business men such as Bill Gates, Warren Buffet and a host of others to brainstorm how to make it successful! Why not turn to the brightest business minds for a solution?

[johnnymac6]

01:32 AM on 02/12/2012

It's a shame that you buried the REAL headline at the end of your article, "a massive annual payment to prefund retiree health benefits." I guess a headline reading "USPS runs an operating profit of $200 million in the 1st quarter of 2012" is too much to ask. I expect this from FOX, but not from HuffPost. Get it right next time.

[Kali Yuga]

02:07 PM on 02/11/2012

Btw the US Postal Inspectors are the largest investigative spy agency in the nation. They read all your mail people, and now they read your email too. Guido needs to keep tabs on you to make sure you pay the vig...

[Itsafact]

04:29 PM on 02/11/2012

Quit spreading lies and propaganda to support some feeble-minded agenda you have. And don't come back and tell us you were only joking. You are clearly trolling.

[Kali Yuga]

05:55 PM on 02/11/2012

Its a fact that everyone can verify. Including you.

[vetxcl]

04:27 PM on 02/13/2012

Complete BS and blather.

[Kali Yuga]

02:04 PM on 02/11/2012

About 15 years ago the USPS fired a manager who made the USPS air delivery division show a profit. He 'misallocated funds for advertising'. So the USPS can kiss my *. Is the Congress still using it to launder money? If 7 private carriers can turn a profit without encroaching on the state mandated postal monopoly, and the USPS cannot, then USPS is just crooked and slated for extinction. Seeya!

[Itsafact]

04:30 PM on 02/11/2012

You really don't have a clue as to the issues. Again, you're clearly trolling. You sound sick.

[Woodwiz]

12:30 AM on 02/12/2012

Dido

[Kali Yuga]

11:59 AM on 02/12/2012

So far you have posted insults to other people's comments 33 times on this article, consistently aggressive, unintelligent, ad hominem attacks. Apparently you are a very unhappy troll with nothing better to do. Good luck resolving your dissonance.

[vetxcl]

04:28 PM on 02/13/2012

No proof = no fact. Go back to France.

[saveourplanet]

12:38 PM on 02/11/2012

The reason for the financial mess that the USPS is in lies with a bill pushed through Congress by Republicans in 2006 that requires the Post Office to fund 75 YEARS of pension funds in just TEN YEARS!!!

What other business in America is FORCED to pre-pay 75 YEARS to a pension fund in just 10 years???

This law NEEDS to go but you can bet the TeaPubs in the House will filibuster ANY bill that tries to end this disaster of a bill.

[EarlySunrise]

02:28 PM on 02/11/2012

This prepay pension fund is a typical Bain-Romney capitalist take-down technique. The way I see this thing is, when that pension fund reaches it goal, the Post Office will "collapse", needing to be privatized. Then they will "pay off" those near retirement at a much, much lower buy-out rate, leaving LOTS, and I mean LOTS of $$$ for the "new" owners. Very inhumane capitalism.

Sad thing is, the schools are being attacked in the same way, AND for the same reason --to privatize --then TAKE [not make] LOTS of taxpayer money for their management skills, from the prisons, the state-owned liquor stores, the libraries,the roads, and the heath care system which continues to be plundered in this way, too. They are not creating any NEW businesses but taking over every single social institution that millions and millions of hardworking Americans helped build over the last several hundred years and they are transferring that money to themselves. In effect, they are taking over the entire USA piece, by valuable piece, without firing a single shot!!!!!!!!

The humane laws and regulations that FDR and Truman managed to get through gave this country it finest decades. By tweeting capitalism with structure and rules, FDR and Truman, in effect, rejected the one system only rule of Communism or capitalism and COMBINED some of the best of both systems. A person could really work hard, study and make a life. A good life. A life that the whole world envied.

[vetxcl]

04:30 PM on 02/13/2012

Faved for insight. Radical CONservatives like to break government when ever they can't simply eliminate it.

[rneigh9880]

09:33 AM on 02/11/2012

Give Health Care to the Government and this loss will look like a small puddle compared to the ocean. Or better yet, let's just fold Obama's health care plan into the Postal Service and let them adminster the plan.

[vetxcl]

04:32 PM on 02/13/2012

Your obsession is telling.

[rneigh9880]

04:46 PM on 02/13/2012

Telling What?

[Barbara DeZan]

09:13 AM on 02/11/2012

The Republicans have been trying to do away with the Postal Service for generations. They want to privatize it...badly.

Looks like they are upping the anti.

If they are successful, say goodbye to the 50 cent stamp that will get your letter across the country in 3-5 days. Say hello to Fedex or UPS or some contractor who will charge you anything they wish...because you will have no options.

[Woodwiz]

09:17 AM on 02/11/2012

Of course you'll have options...fed ex, ups, or any number of efficiently run private carriers that could spring up.....it's called COMPETITION!

[Barbara DeZan]

10:25 AM on 02/11/2012

You are correct.

However, you can bet your buttons you won't pay for a 50 cents stamp.....

[saveourplanet]

12:34 PM on 02/11/2012

Yeah well good luck getting Fed Ex or UPS to deliver in RURAL America!

I know first hand that there are MANY areas in the country where Fed ex and UPS DON'T deliver.

The Post Office on the other hand delivers mail to ALL small towns and homes in the country.

[lpc880]

08:55 AM on 02/11/2012

I have 5 bills a month sent to my home all the rest is junk mail ??

[Itsafact]

04:33 PM on 02/11/2012

Are you asking us or telling us?

[vetxcl]

04:34 PM on 02/13/2012

Perhaps ipc880 is suffering from AOLpo fatigue.

[hereismyoutlook]

08:38 AM on 02/11/2012

But yet here at tax time, I have to drive to the IRS office to get the tax forms that I need, because good ole Uncle Sam won't mail them anymore! Wouldn't that be a help to the postal system's money shortfall?

[Barbara DeZan]

09:15 AM on 02/11/2012

Getting Republicans off the back of the Postal Service would fix it.

They've been trying to privatize it for generations.

As for those tax forms....they are available everywhere...including your post office, zippy. Libraries also have them....and most County government offices.

[Woodwiz]

08:24 AM on 02/11/2012

How do you LOOSE 3.3 billion in three mos???? Is that money they had to withdraw from their savings account??(I doubt that) Get a loan for it?? (who'd loan it?) sell stock?? (they haven't any) Is it possible to loose something you never had?? I really don't know!

[saveourplanet]

12:43 PM on 02/11/2012

The USPS didn't "lose" 3.3 billion in a month.

The USPS is REQUIRED to pre-pay 75 YEARS of pensions in just 10 YEARS by a 2006 bill pushed through by Republicans in Congress.

NO other business is required to fund 75 years of pensions in just 10 years.

[vetxcl]

04:37 PM on 02/13/2012

Interesting how one poster here can keep people more informed than all the resources at AOL's fingertips.

faved

[Itsafact]

04:34 PM on 02/11/2012

Clearly you DON'T really know. You know what, your business sense is sorely lacking so just skip the issue altogether.