Postal Service Reports $5.1 Billion Loss for 2011
The U.S. Postal Service closed the 2011 fiscal year, which ended in September, with a $5.1 billion net loss. This loss would have been over $10 billion except for legislation that put off the mandated payment that the service must soon make into the retiree health benefits fund to cover current workers. The mail volume processed through the service fell by over 3 billion units this year, which represents a 1.7 percent drop over the 2010 volume. First-Class mail, which produces the most profit for the system, dropped by 5.8 percent while packages and Standard Mail increased slightly.
The revenue produced by the Shipping Services division, including Express and Priority Mail, increased to a total of $530 million. A 6.3 percent in this revenue was driven mostly by the rise in Parcel Select and Parcel Return pieces. These services are mainly used by retailers shipping products, and rises in online shopping have helped the bottom line of the Postal Service slightly. Standard mail also increased by 2 billion pieces in 2011.
The Postal Service is trying to get back into the black, but they are operating under strict rules about how their business operates and what services they can offer. The CEO and other executives in the organization are asking Congress to pass new legislation to allow them to become more flexible. Unless the system can become more competitive and drop their costs by at least $20 billion by 2015, the service will become a serious burden on the government instead of a self-supporting public service. Operating revenue dropped by almost $2 billion this year, but the Postal Service also managed to lower expenses by $5 billion. If the service can continue to cut costs at this level for the next few years, it may remain a viable business.