Postal Service Loss Widens as Mail Volumes Fall

The U.S. Postal Service, which says it will be insolvent by September without congressional permission to delay a required payment, reported a widening second-quarter loss as first-class mail volume declined. The loss expanded to $2.6 billion in the three months ended March 31 from $1.9 billion a year earlier, Louis Giuliano, the chairman of the Postal Service’s board, said at a meeting in Washington. Revenue declined 2.8 percent to $34.1 billion. First-class mail volume fell 7.6 percent. The Postal Service, which reported a loss of $8.5 billion in its 2010 fiscal year, is seeking to cut expenses by eliminating Saturday mail delivery and restructuring labor contracts. It’s also urging Congress to change laws requiring it to pay now for health-care benefit costs of future retirees, saying that it will otherwise run out of cash. “Absent changes in the laws, the USPS will be forced to default on some of its obligations to the federal government,” Giuliano told the agency’s board. “The Postal Service is facing challenges it has never faced before, and, as a result, every aspect of Postal operations will need to anticipate and accommodate changes.” The agency would default on payments due the federal government and would continue. Click here to view the quarterly financial statements.

Source: Bloomberg & USPS Press Release

Postal Service Must Fix Financial Issues Quickly

The US Postal Service is in an "absolutely critical" six-month to one-year period when it must reverse its financial fortunes, Ronald Stroman, the USPS' newly minted deputy postmaster general, recently told reporters. However, he said the organization has a difficult task in securing Congressional support because of the current legislative body's focus on financial responsibility and its large number of new members. “A misconception in Congress is that the US Postal Service is a government agency,” said Stroman, adding that the USPS “does not have the option” to punt the issue to a future fiscal year. “Some members of Congress don't necessarily see the USPS as moving quickly enough to a 21st Century institution.” Stroman added that the Postal Service's top legislative priority is getting Congress to fix its pension payment requirements, which now force the organization to pay billions of dollars per year at a time when First Class mail is declining significantly.

Source: DMNews

OIG Issues Report on Simplified Addressing

The Office of the Inspector General encouraged the Postal Service to continue its pursuit of simplified address mail. The OIG said the time is right to focus on the needs of its potential small business and other local users and provide an easy-to-use option to address their unique needs. The simplified address mail service removes needlessly complicated and costly addressing regulations for saturation mail and, thus, removes the historical barriers to entry for small, local businesses wanting to mail on their own. If these businesses benefit from this new mailing option, so too will the overall economy through increased consumption, sales, and employment.

Source: OIG

New Permit System Forthcoming

Speaking to the National Postal Forum last week about the need to make it easier for businesses to use the Postal Service, PMG Donahoe said his team was looking into the mailing permits system. Currently, large mailers have to have separate permits – and pay individual permit fees – for every location at which they put items in the mail. Donahoe said his team was listening to criticisms of the situation from his customers. “We would like to get a system where you don’t need any permits, and you can bring in your mail easily wherever you are,” he said.

Source: Post & Parcel