United States Postal Service Losing $25M a Day

    April 18, 2013
    Sean Patterson
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It’s no secret that the United States Postal Service (USPS) has been struggling for years. The company has seen its revenues fall in the face of email and the new internet economy.

In February, the USPS announced that it would be dropping Saturday mail delivery to try and cut its losses. However, congress just this month passed a resolution barring the USPS from getting rid of Saturday delivery. It’s the type of congressional mandate that Postmaster General Patrick Donahoe has been complaining about in every dismal USPS quarterly financial disclosure.

This week, the U.S. House Oversight and Government Reform Committee held a hearing titled Options to Bring the Postal Service Back From Insolvency. Donahoe was invited to give testimony at the hearing, during which he revealed just how bad the situation is for the USPS.

“In the past two years, the Postal Service has recorded $21 billion in losses, including a default of $11.1 billion in payments to the United States Treasury,” said Donahoe. “The Postal Service has exhausted its borrowing authority and continues to contend with dangerously low liquidity. We are losing $25 million a day, and we are on an unsustainable path.”

Donahoe went on to outline the usual points made by the USPS when addressing its financial situation. First class mail use has dropped 28% since 2007, and the Postmaster General complained that restrictive laws governing the Postal Service prevent it “from fully responding to these changes in consumer behavior.”

Donahoe’s testimony was then countered by Fredric Rolando, the president of the National Associatio of Letter Carriers (NALC), the union that represents the USPS’ letter carriers. Rolando stated that the congress-mandated pre-funding of retiree health benefits is the major factor in the USPS’ insolvency.

  • bill

    put the mail boxes on the same side of the road, no more sat. delivery, this will solve problem, or raise stamp to 2.00

  • http://yahoo eric isaacs

    UPS,DHL,FED EX you don’t here them crying.Oh those companys aren’t ran by our idiot government.I believe they have to make money to stay in business

  • Rebecca marcell

    The PMG should be fighting more for having the prepayment of health benefits for future retirees be cancelled instead of deleting Saturday delivery. The Postal Services should have never been made to pay that when no other federal agency has too and on top of it they have overpaid and will never get it back! In my opinion that would be what the Postal Service needs and without using taxpayers to help!!

  • http://www.quantisoft.com Howard Deutsch

    The reality is that the world has changed dramatically in the past decade with the parabolic growth of Internet use (e-mail replacing snail mail, online shopping replacing catalogs, etc.). We need to decide if it is really important to provide 6-day/week service or if businesses and individuals can live with 5-day mail delivery. The USPS has done a lot to increase efficiency and they can probably do mor, but added efficiency will not solve the problem by itself. We need to either pay higher rates for postage or cut back on service.

    Might it be possible for the USPS to be more competitive against FedEx and UPS? Is part of the problem Congress?

  • Elwin

    The post office should never be looked upon a a profit oriented business. It should be considered one of the many public service departments of the federal government.
    When did other federal departments like the Pentagon,the Highway Dept,The School System,the Welfare Dept,make a profit.
    If profit has to be a goal of the Postal Dept,change the rules that will allow them to do so.They won’t have any problem in obtaining the desired goal.