The government-run United States Postal Service (USPS) announced Thursday that it lost $5.2 billion in the third quarter, its 11th consecutive quarter of losses.
“We will continue to take actions under our control to improve operational efficiency and generate revenue by offering new products and services to meet our customers changing needs,” said Postmaster General and CEO Patrick Donahoe in a press release. The release noted the 9 percent growth in revenues from parcel volumes as a positive.
The agency, which employed 546,000 people in 2011, states in the press release that operational difficulties such as a declining paper-mailing market—total volumes decreased by 3.6 percent compared to Q3 2011—are only one part of the problem.
Congress Urged to Change Postal Law So Agency Can Reform
“We remain confident that Congress will do its part to help put the Postal Service on a path to financial stability,” said Donahoe in the press release.
The agency is stifled by a need to prefund future retiree health benefits—$3.1 billion in the third quarter alone—paying the required amount to the United States Treasury, as USPS retirees participate in the U.S. government health care program.
According to postal service spokesman David Partenheimer, this is something that no other government agency or company USPS knows of has to do. Due to cash constraints, the postal service could not make the $3.1 billion payment, but nonetheless keeps being liable for the sum and has to account for it in its profit and loss statement.
According to Partenheimer, USPS could solve the problem by setting up their own health care scheme for retirees that would provide “the same or even better coverage” while reducing costs, mostly because a competitive bidding process would induce private insurance companies to bid for the contract given the large number of USPS employees.
