When the U.S. Postal Service (USPS) lost $5.1 billion in FY 2011, it was just getting warmed up, posting a staggering $15.9 billion loss in 2012 and for the first time exceeding its $15 billion debt limit.
As expected, Postmaster General and USPS CEO Patrick Donahoe used the unhappy news to once again call on Congress, to help out the USPS in ways it helps out few other "businesses."
"It's critical that Congress do its part and pass comprehensive legislation before they adjourn this year to move the Postal Service further down the path toward financial health," said Donahoe in a press release. "We continue to do our part to grow revenue and reduce expenses by making our operations more efficient and by providing our customers with new and expanded services to meet their mailing and shipping needs."
What CEO Donahoe wants Congress to do - quickly - is let the USPS out of its legal requirement to prefund health benefit payments to its future retirees.
The retiree benefit prefunding requirement is a provision of the Postal Reorganization Act of 1970, which turned the USPS into a "semi-independent federal agency" to be supported completely by the sales of its products and services. Sort of like a private business with certain special advantages, like not having to pay any state, local or federal taxes.
Due to "insufficient cash resources," the USPS was for the first time forced to default on its $11.1 billion retiree benefit prefunding payments in FY 2012. The $11.1 billion default represented almost 70% of the USPS' $15.9 billion net loss.
In addition to resolving the prefunding requirement, the USPS wants Congress to allow it to "determine delivery frequency," as in cutting out Saturday delivery or even limiting deliveries to just three days a week.
The USPS would also like permission from Congress to sell "non-postal products and services," whatever those might be.
Also See: Seven Ways to Save the Postal Service
Once again, the main postal product the USPS did not sell enough of in 2012 was postage stamps. Total mail volume fell by another 8.4 billion pieces, from 168.3 billion in 2011, to 159.9 billion pieces this year.
On the brighter side, the USPS' package delivery service increased by $926 million, or 8.7%, on a volume increase of 244 million pieces compared to the same period last year.
"Our productivity grew to a record level as we captured cost savings and improved productivity for the thirteenth straight quarter," said USPS CFO, Joseph Corbett. "This year's improvement is largely attributable to the reduction in work hours, which decreased by 27 million, or 2.3 percent, in 2012 from the previous year."
Hoping to reduce its work hours even further, the USPS in October offered 115,155 of its employees up to $15,000 to either retire early or quit.
The USPS will cut an additional 13,000 employees by shutting down 229 of its 461 mail processing plants - but no post offices -- by February 2014, resulting in an annual savings of about $1.2 billion.
Also See: Postal Service Losses by Year