<b>2010 Financial Plan Predicts More Losses Next Year</b>
<b>WASHINGTON</b>—The U.S. Postal Service (USPS) today filed its 2009 fiscal year-end financial results, showing a net loss of $3.8 billion for the year — despite cost-cutting efforts resulting in $6 billion in cost savings and a $4 billion reduction in required payments for retiree health benefits. Cost savings reflect a reduction of 40,000 career USPS employees as well as reductions in overtime hours, transportation and other costs. The $4 billion reduction in required retiree health benefit payments was passed into law for fiscal 2009 to allow USPS to maintain fiscal solvency while continuing to provide universal, affordable service to the nation.
Details of 2009 results include:
Operating revenue of $68.1 billion, compared to $74.9 billion in 2008;
Operating expenses of $71.8 billion, compared to $77.7 billion in 2008;
Net loss of $ 3.8 billion, compared to $2.8 billion in 2008; and
Total mail volume of 177.1 billion pieces, compared to 202.7 billion pieces in 2008, a decline of more than 25 billion pieces, or 12.7 percent.
“Our 2009 fiscal year proved to be one of the most challenging in the history of the Postal Service,” said Chief Financial Officer Joseph Corbett. “The deep economic recession, and to a lesser extent the ongoing migration of mail to electronic alternatives, significantly affected all mail products, creating a large imbalance between revenues and costs.”
Corbett said that USPS responded aggressively to unprecedented mail volume declines and the ongoing recession. “We undertook comprehensive cost-cutting measures across all areas of the organization,” he said. “Most notably, we reduced work hours by 115 million, or the equivalent of 65,000 full-time employees — a larger number than the entire workforce at more than 80 percent of Fortune 500 companies today.”
Several significant accruals in the year increased the 2009 net loss by $1.7 billion but did not affect current year cash flow:
An increase in estimated Workers Compensation liability of $718 million, primarily to reflect lower interest rates;
An increase in estimated deferred revenue recognition on prepaid postage of $756 million, primarily based on newly-available data on customer purchases and use of stamps; and
Accrued retirement incentives of $197 million for 13,400 employees who applied for the incentive prior to Sept. 30, 2009.
I paid for some stuff being sent out from Midland, TX about 6:30pm friday evening. It was sent priority and I had it yesteday at noon. Seems USPS has really stepped it up.
True, but I’ve had the stuff delivered to me before it even showed up in the tracking before. Just had something sent Priority from Indiana that got there overnight for $4.xx for a decent sized box.
I look at it like a public service. If they went under there’s no private company that would let you mail a letter to SoCal or Alaska for $.44. And they are stepping up their game on packages.
Article makes a good point. They are constrained by law to keep small branches open in small towns that lose money, for the good of those people, so it’s not really fair to compare them to their private counterparts.
yup, i got a package from cali in under a few days from usps. I realy like there “if it fits in a box it ships” thing. I had to ship something to oregon the other day and was surprised how cheap it was. That and usps office is like 1/4mi from my house so i can get there in like under 11seconds.lol
revenue gap = increase costs or decrease services.
In first class mail it’s less of an issue because there is no competition. No one else is going to mail a letter even 5 days a week for what they charge.
well they could decrease operating costs somehow. or raise the price of postage. people will definitely complain, but if there is no one else who could do it for $.XX per letter then raise the price closer to what the others could do it for. no sense shooting yourself in the foot
That’s what statistical analysis is for…some nerd in the back room of a post office somewhere ran the numbers and they will lose fewer customers by cutting Saturdays than by increasing postage. They did cut costs this year, hugely, to the tune of $6bil, but most further savings are banned by law.
Fry, I think the ideal situation for the USPS, like any nonprofit, would be a zero sum game.
Why shouldnt they? That’s like saying the government as a whole SHOULD operate in the red.
edit: since when are non-profits out to break even? Non-profits are totally in business to earn money. But their main focus is to serve their customers, anything above and beyond will go back into the business or back to the customer (ie; charity causes for most non-profits). I dont know of any non-profit whose goal is to break even and just cover cost. No one would run a non-profit (or any BUSINESS) if that were the case.