The U.S. Postal Service (USPS) today announced its first quarter financial results and things are not looking good. In the first three months of the 2013 fiscal year USPS had a net loss of $1.3 billion. The first quarter includes holiday season shipping and mail, which generally makes it USPS' most lucrative quarter.
The company cited shipping and package revenue growth and "increaced efficiency" as high points, but admitted that those revenues could not help offset continued declines in First-Class Mail volume and "costs that are beyond Postal Service management control." USPS has been begging congress for Postal Service reform, but has not received it.
As a result of its dismal finances, USPS will begin "accelerated cost-cutting actions," which include eliminating Saturday mail delivery. USPS believes cutting Saturday delivery would save it $2 billion each year.
“The encouraging results from our holiday mailing season cannot sustain us as we move deeper into the current fiscal year and face continuing financial challenges,” said Patrick Donahoe, U.S. postmaster general and CEO of USPS. “By moving forward with the accelerated cost-cutting actions directed by our Board of Governors, we will continue to become more efficient and come closer to achieving long-term financial stability. We urgently need Congress to do its part and pass legislation that allows us to better manage our costs and gives us the commercial flexibility needed to operate more like a business does. This will help ensure the future success of the Postal Service and the mailing industry it supports.”
Though the Postal Service is mandated to provide six-day mail delivery, the fiscal cliff impasse in congress had the side effect of delaying the yearly appropriations bill containing the mandate. If a new mandate is not passed by March 27, USPS will legally be able to cut Saturday mail delivery. The new delivery schedule would then begin the week of August 5.