November 16, 2012—Now things are just getting ridiculous. On Thursday, the U.S. Postal Service reported their consecutive yearly multi-billion dollar loss, putting them deeper into the financial hole. The U.S. Postal Service reported net losses of $15.9 billion for 2012, almost $10 billion more than last year and it doesn’t seem to be turning around any time soon. Agency officials have repeated requested members of Congress to pass legislation that will extend relief to cash-strapped organizations.
All in all, over 70 percent ($11.1 billion) of the loss was made up by payments to prefund health benefits for retirees. Although USPS defaulted last year, the U.S. Postal Service is required by law to make yearly payments to retirees. USPS is seeking to exonerate themselves from this prefunding obligation as well as request new ways to reduce delivery schedules and adjust prices. The U.S. Postal Service is also asking Congress to refund an overpayment the agency made to the Federal Employees’ Retirement System, as well as stronger bargaining position in its labor negotiations.
“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 statement.
USPS has been fiddling with a variety of innovative new programs like gopost lockers, same-day delivery, and a complete overhaul of their Click-N-Ship service to combat their annual losses. Earlier this week, the Postal Service won approval from regulator to test out their same-day delivery service in the San Francisco area. USPS will work with about 10 ecommerce vendors with physical locations to determine the sustainability of this idea.
“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,” Donahoe 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.”
For the first time, the U.S. Postal Service has reached its borrowing limit of $15 billion. However, postal operations like delivery services and employee and vendor pay as not been affected.
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