Over all, the post office reported operating revenues of $16.2 billion in the third quarter, which ended June 30, compared with $15.6 billion over the same period last year, a 3.6 percent increase. It attributed the increase to cost-cutting measures and strong growth in e-commerce deliveries.

Postal officials said the service’s expenses were $16.9 billion, compared with $20.8 billion over the same time last year. Expenses were lowered by a $918 million decrease in workers’ compensation costs because of lower interest rates.

“The Postal Service’s latest quarterly report makes clear that Postal Service finances are rebounding strongly as the U.S. economy improves,” said Fredric V. Rolando, president of the National Association of Letter Carriers. He said that the post office would have made a profit of $660 million without the health fund payments required by Congress.

Mail volume continues to fall, but not as sharply as in the past. Total volume for the quarter was 37.9 billion pieces, compared with 38.3 billion over the same period last year. The volume of first-class mail, the largest revenue source for the post office, declined about 3.4 percent. Revenues generated by first-class mail were about $6.9 billion, down about 1 percent, or $60 million, from the same period last year.

Revenue from advertising mail — many call it junk mail — increased by $117 million, or 3 percent, compared with the same period a year earlier. Revenue from package deliveries also continued to grow. Revenue was $2.9 billion, up $237 million, or 8.8 percent, over last year.

Despite a somewhat better financial picture, the post office said it continued to suffer from the 2006 Congressional mandate that requires it to pay $5.5 billion annually into a health fund for future retirees.

The service defaulted on two payments last year for the first time and said it would not be able to make payments into the fund this year.

To increase revenues, postal officials have asked Congress for the authority to enter into new lines of business like beer and wine delivery, which are now forbidden. It has also asked Congress to change the mandate for the retirees’ health fund.

Congress has recently began working on a postal overhaul bill after similar legislation failed last year. The Senate passed its version of the bill last year, but a House measure never made it out of committee.

Last month, a House committee passed a bill that would allow the post office to phase out letter delivery on Saturday, but six-day delivery would continue for packages and medicine. The bill would also end delivery to individual homes in favor of cluster boxes. It would also forgive the two health fund payments the post office missed last year, but would not end the payments. The Senate has not begun work on its version of the postal overhaul.

“We are encouraged that comprehensive postal reform legislation has started making its way through the legislative process in both the House and Senate,” Patrick R. Donahoe, the postmaster general, said.

Article source: http://www.nytimes.com/2013/08/10/us/post-office-loss-declines-in-third-quarter.html?partner=rss&emc=rss