Just a week after the U.S. Postal Service defaulted on a payment to the U.S. government for the first time in its more than 200-year history, the USPS has announced a fiscal third-quarter loss of $5.2 billion.
That was worse than the $3.1 billion loss the postal service reporting during the same period last year. However, most of the loss comprises legislatively mandated early payments to its retiree benefit plan, Reuters noted. Without those required set asides, the loss would have been about $1 billion for the quarter.
Postal officials warn that if Congress doesn’t act, the service may run out of operating cash by October, though few in Washington believe that mail service would actually be disrupted.
In recent years, the postal service has seen its mail volume decline as consumers move away from paying for goods and services via checks sent by mail to online payments systems. Email has replaced letters, and competition with UPS (NYSE:UPS) and Fedex (NYSE:FDX) has dented its package delivery revenues.
The USPS expects to lose roughly $15 billion during the fiscal year that ends in September.
Congress departed Washington for its summer recess without announcing any plan to support post office finances. Various plans have been advanced to trim costs, including closing rural post offices and stopping Saturday delivery.