U.S. Postal Service has $2.8 billion loss in fiscal '08
The U.S. Postal Service reported a $2.8 billion net loss for its fiscal year that ended September 30, blaming the national economic slowdown and costly government mandates, Reuters reported.
Mail volume declined 4.5 percent from a year earlier to 202.7 billion pieces as problems in the financial and housing industries grew and more people turned to electronic mail, the Postal Service said.
The Postal Act of 2006, which requires the agency to pre-fund retiree health benefits, also cut deeply into the service's finances.
The legislation added $5.6 billion to the Postal Service's expenses, which totaled $77.8 billion. Revenue in fiscal 2008 was unchanged at $75 billion.
At a meeting of the Postal Service Board of Governors on Thursday, Board Chairman Alan Kessler said the board was working with Congress to ease some of the financial pressure from the Postal Act.
"Legislative relief is only part of the solution to the problems facing the Postal Service," Kessler said. "The Board and management will actively pursue the actions necessary to further reduce costs and grow revenue."
The loss occurred despite more than $2 billion in cost-cutting measures that included 50 million fewer work hours compared to the previous year. The cuts helped offset higher expenses that included a $525 million increase in fuel costs and $562 million in cost-of-living adjustments for workers.
"As we continue to reduce work hours and other costs, our top priority remains providing excellent service to our customers," Postmaster General John Potter told Board members.
Despite revenue losses, the Postal Service said it improved on-time mail delivery, reaching record performance levels in fiscal 2008. On-time delivery performance in the fourth quarter was 97 percent for overnight First-Class mail, 94 percent for two-day service and 93 percent for three-day service.
"We expect the new fiscal year to be another difficult one for the Postal Service and the entire mailing industry, as economic factors will continue to reduce mail volume and increase expenses," Potter said.