Someday you might read some good news about the U.S. Postal Service here, but this is not that day. This day, you're going to read that in the process of delivering 38.5 billion pieces of mail, the Postal Service lost another $5.2 billion during the third quarter of 2012, about $2.1 billion more than it lost during the third quarter of 2011.
The $5.2 billion third quarter loss brought the Postal Service's year to date loss to $11.6 billion, compared to $5.7 billion for the same period last year. Contributing greatly to its $11.6 billion year to date loss was the Postal Service's legally required payment to the U.S. Treasury of $9.2 billion for pre-funding of postal workers' retiree health benefits. Unfortunately, the Postal Service was financially unable to make the payment.
Also See: Postal Service Losses Year by Year
By comparison, the Postal Service ended its 2011 fiscal year (Oct. 1, 2010 - Sept. 30, 2011) with a net loss of "only" $5.1 billion, a figure that would have been at least $10.6 billion had Congress not passed legislation allowing the Postal Service to postpone its congressionally mandated postal employees' retiree health benefits pre-funding payment of $5.5 billion.
According to the Postal Service, the losses will continue until the health benefit pre-funding ends, which will require Congress to change some federal laws.
"We remain confident that Congress will do its part to help put the Postal Service on a path to financial stability," said Postmaster General and CEO Patrick Donahoe in a press release. "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. Moving forward with our business plan will make the Postal Service financially self-sustaining, provide a platform for future growth and preserve our mission to provide secure, reliable and affordable universal delivery services for generations to come."
What Donahoe wants Congress to do is eliminate the retiree health benefit pre-funding requirement and replace it with a Postal Service health insurance program, independent of the current federal programs, and allow the Postal Service to deliver the mail only 5 days a week.
Notice that Postmaster General Donahoe is also titled as the "CEO" of the Postal Service. That's because the Postal Reform Act of 1970 turned the Postal Service into an entity that is legally and functionally, more of a private business than a government agency.
One Default, Two Default: On Aug. 1, the Postal Service was, for the first time ever, forced to default on its required $5.5 billion payment for pre-funding its retiree health benefits because of "insufficient cash resources." Now, the Postal Service says that unless Congress lets it off the hook again, it will be forced to default on its second scheduled payment of $5.6 billion due by Sept. 30.
The Postal Service, however, was quick to stress that its financial defaults, "very low" levels of cash on hand and lack of ability to borrow more money will not prevent it from paying its employees, retirees and suppliers or from delivering the mail.
Not Enough Mail to Deliver: Of course, not having enough mail to deliver continues to be the Postal Service's number one financial problem. Blaming the public's ongoing shift to using email, rather than buying stamps, the Postal Service reported that total mail volume in the third quarter of 2012 dropped to 38.5 billion pieces, a decrease of 1.4 billion pieces, or 3.6 percent.
Also See: 7 Ways to Save the Postal Service