Postal Service Reports $5.2b Loss in 3d Quarter
The nearly bankrupt US Postal Service reported losses on Thursday of $57 million per day in the last quarter and warned it will miss another payment it owes the Treasury, just one week after its first-ever default on a payment for future retiree health benefits.
From April to June, losses totaled $5.2 billion, up $2.1 billion from the same period last year.
The mail agency said it is being hurt significantly by mounting expenses for future retiree health benefits. Those expenses, mandated by Congress in 2006, made up $3.1 billion of the Postal Service’s quarterly loss, while workers’ compensation tacked on another $1.1 billion in expenses. The agency’s operating loss was $1 billion, mostly due to declines in first-class mail.
”We have simply reached the point that we must conserve cash,” Thurgood Marshall Jr., chairman of the Postal Service’s board of governors, said in explaining the payment defaults. He cautioned that the agency may delay other payments if necessary.
The Postal Service has been urging Congress for months to pass legislation that would allow it to eliminate Saturday mail delivery and reduce the annual payment of more than $5 billion to the retirees’ health fund. The Postal Service defaulted on that payment last week when the House failed to take action before heading home for a five-week break.
The service says it will miss the second $5.6 billion payment due on Sept. 30, also for future retiree benefits, as cash runs close to zero.