Most businesses that lose even a "paltry" $1 billion in one year have forks stuck in them because they are done. But most businesses are not the U.S. Postal Service (USPS), which despite reporting a net loss of $8.5 billion for fiscal year 2010, promised to continue its "relentless efforts to innovate and improve efficiency" next year.
It's Still the Economy, Silly: Continuing to blame the recession and dwindling mail volumes, the USPS noted its "losses mounted" in 2010, despite cutting 75 million employee work hours and achieving record high productivity.
"Over the last two years, the Postal Service realized more than $9 billion in cost savings, primarily by eliminating about 105,000 full-time equivalent positions -- more than any other organization, anywhere," said USPS Chief Financial Officer Joe Corbett in a press release. "We will continue our relentless efforts to innovate and improve efficiency. However, the need for changes to legislation, regulations and labor contracts has never been more obvious."
Lowlights from the USPS' most recent financial year included that $8.5 billion net loss -- which was $4.7 billion worse than in 2009 -- and a $1 billion drop in revenue compared to 2009.
Somebody Please Mail Something: The USPS' main cash cow, First-Class Mail, continued to suffer in 2010, with mail volume dropping another 6.6 percent after falling 8.6 percent in 2009, and 4.8 percent in 2008. Still its most profitable product, First-Class Mail generates more than half of the USPS' total revenue.
Unless mail volume picks up - a lot - and soon - the USPS expects its auditors Ernst & Young to issue an opinion questioning the Postal Service's ability to generate enough income to meet all of its future financial obligations, including a congressionally required $5.5 billion pre-payment to the Postal Employees Retiree Health Benefits fund due in 2011.
No Postage Hike this Time: To the surprise of almost nobody, the USPS in July requested a 2-cent postage rate increase to take effect in January 2011. But to the surprise of almost everybody, the U.S. Postal Regulatory Commission rejected the request.