September 27, 2020

Postal Service Predicts Record Loss for 2012

“We continue to see steady declines, unfortunately, in first-class mail, which is our most profitable product,” the postmaster general, Patrick R. Donahoe, said at a board meeting in Washington on Tuesday. “We have to build tomorrow’s postal service based on revenue and volume projections as we look forward. We can’t look backward.”

The amount of mail delivered by the Postal Service will probably fall about 6 percent in fiscal 2012, exceeding the drop of about 2 percent a year earlier, said its chief financial officer, Joseph Corbett. Revenue is expected to decline to $64 billion in 2012, from $65.7 billion in 2011, he said.

Mail volumes have dropped more than 20 percent in the last five years, hurt by the recession and the increasing use of electronic communications. The service, which is supposed to support itself financially, is closing post offices and processing plants, cutting jobs and promoting the mailing of letters and packages.

The Postal Service, which also said it might run out of cash by next September, posted a 2011 net loss of $5.1 billion in the year ended Sept. 30 after a $5.5 billion benefits payment was delayed into fiscal 2012. The loss in 2010, when the agency made a benefits payment equal to the deferred one, was $8.5 billion.

The loss forecast for 2012 assumes that the agency will not make any of the $5.6 billion in retiree health payments coming due, Mr. Corbett said in a conference call with reporters.

In September, Congress delayed the benefits payment deadline until Friday. If that remains in place, the Postal Service will default on the payment, Mr. Corbett said.

The Senate Homeland Security and Governmental Affairs Committee last week approved a bill intended to help the service remain solvent and to lengthen the payment schedule to its retiree health benefits fund.

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