USPS posts $5.1 billion net loss in fiscal 2011
If the world of mailing were going as well as the world of shipping, the U.S. Postal Service (USPS) would not be in a world of hurt.
USPS on Tuesday reported a staggering fiscal year 2011 net loss of $5.1 billion, a deficit that would have been $5.5 billion larger had Congress not passed legislation that postponed until Nov. 18 a congressionally mandated $5.5 billion payment to pre-fund retiree health benefits. That payment was due Sept. 30, the end of USPS's fiscal year.
Total 2011 mail volume declined by 3 billion pieces, or 1.7 percent, from 2010. Operating revenue fell to $65.7 billion from $67.1 billion last year. Revenue from first-class mail, the USPS's largest and most profitable service offering, fell to $32.2 billion from $34.2 billion in 2010.
USPS's "shipping services" revenue, which includes Priority Mail and Express Mail, increased by $530 million, or 6.3 percent, in 2011. USPS said the rise in shipping revenue was driven by strong growth in the Parcel Select and Parcel Return services, under which private carriers like FedEx Corp. and UPS Inc. tender customer packages to USPS for so-called last-mile deliveries to residential addresses. By law, USPS must serve every address in the United States.
The growth in those services is due to increased mailings of packages as customers expand their use of the Internet to purchase products, USPS said.
"The Postal Service can become profitable again if Congress passes comprehensive legislation to provide us with a more flexible business model so we can respond better to a changing marketplace," said Postmaster General and CEO Patrick Donahoe in a statement. "To return to profitability, we must reduce our annual costs by $20 billion by the end of 2015."
