After ending the 2012 fiscal year with a record net loss of $15.9 billion, leaders with the United States Postal Service said Thursday that they urgently need legislative action, so they can implement reform and 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,” Postmaster General and CEO Patrick Donahoe said in a prepared statement.
“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," he also said. "Additionally, through the expanded use of technology, including better use of digital tools and mobile technology, we are providing business mailers with new opportunities to connect with customers in a more individualized way.”
Last year during the same period, the USPS lost $5.1 billion.
This year's $15.9 billion loss included $11.1 billion connected to two payments to prefund retiree health benefits, officials said.
The USPS is required by law to prefund those benefits, but it had to default on those payments.
USPS leaders have a plan for reform, which involves resolving a schedule to prefund health benefits and allowing it to sponsor its only health care program, but those changes require legislative action.
Senate members passed a postal bill in April that would help the situation, in part by reducing annual health payments and refunding $11 billion that the USPS made to the federal pension fund, according to The Christian Science Monitor.
But House leaders haven't moved their version through yet, according to Nooga.com archives.
A program that is independent from other federal health insurance programs would provide USPS employees and retirees with the same level of coverage or better, and the cost would be reduced, according to Nooga.com archives.
Consultants estimate USPS could save $8 billion in five years and get rid of the annual $5.5 billion prefunding payments by moving to its own health care plan.
Postal Service officials also want to be able to determine delivery frequency and offer non-postal products and services, among other changes.
Leaders said they are doing many things to save and make money and that the majority of the loss was the result of expenses outside their control.
“Our productivity grew to a record level as we captured cost savings and improved productivity for the 13th straight quarter,” Chief Financial Officer Joseph Corbett said in a prepared statement.
USPS leaders have saved money by reducing employee work hours in 2012 by 27 million, or 2.3 percent, from the year before.
“These work hour reductions reflect our efforts to improve productivity and to respond to the decline in mail volume,” Corbett said. “Since 2000, we have reduced work hours by a cumulative total of 504 million work hours, equivalent to 286,000 employees, or $21 billion in expense savings each year.”
The end of this fiscal year marks the first time in history that the USPS has reached its statutory debt ceiling of $15 billion.
“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,” Corbett also said. “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.”