The United States Postal Service posted a loss of $1.9 billion in the second quarter as the agency slashed workers’ hours but had a hard time dealing with the drop in mail volumes. This was according to the announcement made by the agency Friday.
The loss for the first quarter was an improvement from the $3.2 billion loss during the same period last year. The US Postal Service set aside twice as much for an annual retiree benefits payment in 2012. The agency relied on sales of stamps and other products instead of taxpayer dollars to fund its operations. Its most profitable service is first-class mail. It dropped by $198 million in the second quarter of fiscal year 2013.
Postmaster General Patrick Donahue said the US Postal Service would need a taxpayer bailout worth $47 billion by 2017 unless Congress acted. He added that the agency required saving $20 billion per year by 2016.
The Postal Service has been losing money for years. In February, it announced its plan to end Saturday delivery. The move would save the agency $2 billion per year. Congress prevented the plan when it voted to maintain a six day delivery schedule.
The Postal Service lost $16 billion in 2012. It faced the task of paying its future retirees’ healthcare fund that was mandated by law in 2006. The agency defaulted on its payments and expects to do the same this year. The payments were reflected in its quarterly report.
Postmaster Donahue asked lawmakers to approve the measure that allows the Postal Service to modify its business model and increase its revenue. Lawmakers have taken no action to grant the agency more flexibility.
The Postal Service started consolidating mail-processing facilities, cutting more than 190,000 jobs, and slashing operating hours in the past six years in order to cut losses. Donahue said the agency needs Congress to act on its demands.