From the Employee Net:
USPS ends fiscal year with $15.9 billion loss
Package business continues growth
Posted 11/15/12 at 1:31 p.m.
USPS ended fiscal year 2012 with a record net loss of $15.9 billion,
compared to a net loss of $5.1 billion for the same period last year.
Meanwhile, the Postal Service continues to grow its package services
business. Revenue from package services increased by $926 million, or
8.7 percent, on a volume increase of 244 million pieces compared to
the same period last year. Higher consumer spending, higher e-commerce
retail sales plus increased marketing efforts drove much of this
growth during FY 2012.
The FY 2012 loss includes expenses of $11.1 billion � the two payments
to prefund retiree health benefits. The Postal Service is uniquely
required by law to prefund this obligation. During FY 2012, USPS was
forced to default on these payments.
The prefunding requirement, which made up 70 percent of the net loss,
and the ability to provide more commercial flexibility to allow the
Postal Service to manage its business are among legislative changes
USPS says it needs to return to financial stability.
�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 PMG Pat Donahoe.
Volume and revenue
First-Class Mail revenue, which peaked in 2007, dropped $1.163
billion or 3.9 percent, while Standard Mail decreased $747 million or
4.3 percent compared to last year. However, the rate of decline in the
First-Class Mail category slowed in 2012.
Other details of the yearly results compared to the same period last
year include:
�Total mail volume of 159.9 billion pieces compared to 168.3 billion
pieces a year ago
�Operating revenue of $65.2 billion compared to $65.7 billion in 2011
�Operating expenses of $81 billion (including the $11.1 billion
expense associated with prefunding retiree health benefits) compared
to $70.6 billion the year before
Expenses
The Postal Service has been successful in reducing controllable
expenses as mail volume and revenues have declined. 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. Total work hours continue to decrease despite increases
in the number of delivery points, which rose by approximately 1.3
million over the last two years.
�These work hour reductions reflect our efforts to improve
productivity and to respond to the decline in mail volume,� said Chief
Financial Officer Joe Corbett. �Since 2000, we have reduced work hours
by a cumulative total of 504 million work hours, or $21 billion in
expense savings each year.�
At the end of 2012 fiscal year, the Postal Service reached its
statutory debt ceiling of $15 billion for the first time. �Our
liquidity continues to be a major concern and underscores the need for
passage of legislation that gives the Postal Service a more flexible
business model to improve its cash flow,� said Corbett. �Despite
reaching the debt limit, the Postal Service mail operations and
delivery continue as usual and employees and suppliers continue to be
paid on time.�
Corbett said the Postal Service�s revenue over the first six weeks of
fiscal 2013 is benefiting from the start of the holiday mailing season
and political and election mail from the just completed general
election season.