The U.S. Postal Service estimates it lost about $6 billion in its 2010 fiscal year, raising the pressure for greater cost-cutting after lawmakers and regulators failed to bring needed relief to the USPS’s beleaguered finances.
Postmaster General John Potter said the projected loss for the 12 months that ended Sept. 30 was better than the $7 billion loss the USPS had projected earlier. But it came with a decline of 7 billion pieces in mail volume, part of a structural shift in delivery the postal service is struggling to respond to with cost cuts and operational changes.
But the USPS still faces large mandated pension fund payments – it paid $5.5 billion in 2010 to a fund for retiree health benefits – and the Postal Regulatory Commission last week turned down a request for a rate increase, saying the USPS had not proven the need to raise First Class Mail prices 2 cents.
The Postal Service also has started negotiations with the first two of its four employee unions that have contracts expiring over the next 14 months. The USPS already has said it will seek help from the unions in scaling back costs to meet a fundamental change in mail services.
The post office got some relief from those broad delivery trends in the past year as some mail volume was ahead of projections, including an improvement in advertising direct mail that helped add up to $800 million in revenue.
Without help on several fronts, however, Potter estimates the USPS could run out of cash by the end of its current 2011 fiscal year.
The USPS has cut back its workforce through attribution but has not yet undertaken reductions that come with greater controversy. Those include the elimination of Saturday mail delivery and the potential closing of more post offices and regional offices.