USPS Ends FY Second Quarter With Net Loss Of $2.2 Billion

Default on federal payments looming

U.S. Postal Service Loss Widens in Second Quarter

WASHINGTON — The U.S. Postal Service ended the second quarter of this fiscal year (Jan. 1 – March 31, 2011) with a net loss of $2.2 billion, compared to a net loss of $1.6 billion for the same period in FY 2010.

Despite significant cost reductions and revenue growth initiatives, current financial projections indicate that the Postal Service will have a cash shortfall and will have reached its statutory borrowing limit by the end of the fiscal year. Absent substantial legislative change, the Postal Service will be forced to default on payments to the federal government.

“The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model,” said Postmaster General and CEO Patrick R. Donahoe. “We are committed to working with Congress and the administration to resolve these issues prior to the end of the fiscal year. The Postal Service may return to financial stability only through significant changes to the laws that limit flexibility and impose undue financial burdens.”

Mailing Services revenue of $14.0 billion decreased $568 million, or 3.9 percent, in the second quarter of 2011, compared to the same period a year ago. Mailing Services volume of 40.7 billion pieces represents a 3.1 percent decline from the same period a year earlier. The modest increase in revenue from Standard Mail was not sufficient to offset the loss of revenue from the reduced volume of First-Class Mail.

“Sluggish economic growth and diversion of First-Class Mail to electronic alternatives continue to cause record losses, despite a reduction of over 130,000 full-time equivalents (FTEs) in the last three years,” says Joseph Corbett, CFO and executive vice president. The Postal Service reduced work hours in the second quarter by 9.6 million hours or 3.2 percent. The number of career employees on March 31, 2011, was 571,566, a reduction of 6,726 employees during the second quarter.

Mailing Services results in the second quarter include:

* First-Class Mail revenue of $8.0 billion, on volume of 18.5 billion pieces;
* Standard Mail revenue of $4.2 billion, on volume of 20.2 billion pieces;
* Periodicals revenue of $443 million, on volume of 1.7 billion pieces; and
* Package Services revenue of $394 million, on volume of 167 million pieces.

Shipping Services revenue of $2.2 billion increased 5.0 percent or $105 million compared to the same period a year ago. Shipping Services volume of 352 million pieces represented a 3.5 percent increase compared to the same period a year earlier.

Details of the second quarter results include:

* Total mail volume of 41.0 billion pieces, compared to 42.3 billion pieces in the same period a year earlier, a decrease of 3.0 percent, lead by a drop in First-Class Mail; and
* Operating revenue of $16.2 billion, compared to $16.7 billion in the same period a year earlier, a decrease of 2.8 percent.

Service performance remained excellent during the second quarter, with the national score for overnight Single-Piece First-Class Mail arriving on time 96 percent of the time, a slight improvement over the same period a year earlier.

A number of new marketing initiatives have been introduced that may help to improve revenue growth in 2011, including expansion of simplified addressing for business mailers, Every Door Direct Mail, Priority Mail Regional Rate Boxes, and Reply Rides Free. In January 2011, new Shipping Services prices increased an average of 3.6 percent. New Mailing Services prices that are limited to the Consumer Price Index cap of 1.7 percent took effect April 17, after the close of the second quarter. While new marketing initiatives and price increases may improve revenue growth, electronic diversion will continue to cause reductions in First-Class Mail.

The Postal Service is aggressively reducing expenses, including organizational redesign initiatives. The Postal Service projects $1.2 billion to $1.6 billion in cost savings in fiscal year 2011, including a reduction of workhours across the organization. Benefits of these initiatives, however, may be offset by rising fuel prices.

USPS FY 2011 Second Quarter Finance Presentation
USPS FY 2011 Second Quarter Finance Presentation
USPS Second Quarter FY 2011 10

USPS Quarter II Fy11 10q Final

11 thoughts on “USPS Ends FY Second Quarter With Net Loss Of $2.2 Billion

  1. In an effort to make sure all my ‘ties’ (supervisors) still receive a paycheck. I need to eliminate as many craft people as I can. Let’s see, how can I motivate all those old craft employees to retire? I know, I can find them all in the cafeteria on Tour 2. Gee whiz, if I can eliminate Tour 2, and put all those old farts on Tour 1, That’ll motivate them for sure; and if it doesn’t, I can arrange for all of them to receive split days-off (Ha-Ha, try to spend the weekend with those precious grand kids now (bye the way, were tired of hearing about them on Monday morning anyway)).

  2. I still cannot believe that the postal service has so many is really crazy.Take a look at Boston it is all political.There is a family named Powers one brother could not even carry mail ,yet heis head of the O.I.G.The other could not sort mail so they made him a Postmaster.I bet this happens all over the country.Not until the PO gets rid of all the dead weight they will continue to LOSE BILLIONS

  3. The Postal Service needs a realty check and drastic “CHANGE”. They may need to privatize because of the heavy burden they will have on us tax payers in the long run. I gave 44 years of service to the USPS and found as a government agency it has too many rules and regulations that need revision. Look at the $$$$$$$$$ the union gets it’s members for violations of these rules and regulations versus private industry. More than half of the Postal Service work force would not make it in the private sector because the USPS is an “Equal Opportunity Employer”. This is all well and good but the Postal Service needs change now. It can’t remain the same because it’s not working and needs to be fixed. Sorry but this is real! Change the language in the contracts the Postal Service needs an overhaul to survive.

  4. This really blows my mind!!! If we deliver to every mailbox in the 50 states and all U.S. territories… Why in hell aren’t we stealing more package business from UPS and Fed-EX??????

    I’m so fed up with these fuckin morons we call bosses!!! They have no clue to even balance their own checkbooks.. Our future is in their hands.. Just give me a gun now so i can blow my brains out!!!!!!

  5. eliminate Sat through Tue delivery. get rid of 95 percent of useless management.
    give me big check to go away.

  6. Shipping service revenue increased $ 2..2 billion or 5 per SPLY. This should be an eye opener as to market demand . Operating revenue decreased 2.8 per cent. Mail volume decreased 3.0% lead by First Class Mail.
    A reduction in work hours and Fuel cost would be significant factors in controlling cost. This could be accomplished in eliminating Sat. mail route delivery as the American public is getting the shaft in this totally unnecessary forced service of delivering advertising mail on Sat.. The American consumer has many other things to do in this day and age than scrutinize Sat. mail for items to order. This mail could be delivered on Mon. with same consumer response.
    The parcel delivery argument is not valid for delivery of prescriptions as there is a 7 day time frame. Express and 2ND Day Priority must maintain delivery standards as the Customer pays for this service and it must be met. for repeat business.

    Politicians, ill informed groups, unions and management organizations tend to think of only the present for themselves and loose sight as to what must be done to stabilize the USPS as mail volume is declining and expenses are increasing. The SERVICE argument as it presently exist cannot be upheld
    as supply and demand factors come into play and the demand for the present supply has decreased as noted in the quarterly report.
    Advanced technology is expanding daily with new APPS coming on line.

    The INTERNET competes with the USPS in all areas that at 1 time were only available by using the USPS. This is past times as the INTERNET connects people sociably and business wise without purchase of a stamp and a 1-2 delivery time frame.
    Bottomline Sat. mail route delivery is a wasted expense.

  7. Offer early outs to the craft,and STOP giving incentives to management to retire,($20,000) abolish there position and send them to another location.If they do not accept that then terminate them..Thats exactly what was offered to craft employees,except the position that was offered to them at another location never existed and some ending up resigning.(Management is the biggest factors why the U.S.P.S. has Failed,and lets not forget about the O.I.G. not doing there job,prosecuting management individualls.

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