By HOPE YEN, Associated Press- November 15, 2011
WASHINGTON (AP) " The U.S. Postal Service mentioned Tuesday it has mislaid $5.1 billion in the past year, pulling it closer to impending default on a multibillion-dollar remuneration and to future failure as the feeble manage to buy and increased Internet use expostulate down letter volume.
The financial losses is to year finished Sept. 30 came notwithstanding low cuts of more than 130,000 jobs in new years and the shutting of a few not as big local post offices.
Losses will usually speed up in the forthcoming year, Postmaster General Patrick Donahoe warned, citing faster-than-expected declines in first-class mail. He implored Congress to take swift, wide-ranging action to stabilise the bum agency's funds as it nears a authorised deadline Friday to pay $5.5 billion in to the U.S. Treasury for future retirement illness benefits.
Congress is approaching to give a reprieve, but that will usually check the ay of tab for an group struggling for aptitude in an electronic age. Based on stream losses, the Postal Service says it will run out of allowance " or advance dangerously shut " next September, forcing it to hindrance service.
"We are at a indicate where you need obligatory action," Donahoe said.
In the eventuality of a shutdown, in isolation companies such as FedEx and UPS could hoop a tiny part of the element the post office moves, but they do not go everywhere. No business has shown fascination in delivering letters everywhere in the nation for a set rate of 44 cents for a first-class letter.
For the mercantile year finished Sept. 30, the post office had income of $65.7 billion, down $1.4 billion from the formerly year. Expenses totaled $70.6 billion.
The loss of $5.1 billion was reduction than a formerly guess of $10 billion, but usually since the $5.5 billion remuneration " originally due Sept. 30 " was paid in instalments until Nov. 18 with th! e consen t of Congress.
In 2010, losses totaled $8.5 billion.
Mail volume this past year totaled 168 billion pieces, compared with 171 billion in 2010, a reject of 1.7 percent. At the same time volume was declining, the post office was compulsory to start service to thousands of new addresses to adapt race expansion and new businesses.
The Postal Service, an eccentric group of supervision that does not take taxation allowance for its operations, is not looking sovereign funds.
Instead, postal officials wish changes in the way they run so they can save money. They have asked Congress for permission to lower letter smoothness to 5 days a week, that many lawmakers oppose, and to remove or lower the annual payments of about $5.5 billion to prefund retirement illness benefits. The group moreover wants the lapse of at least $6.9 billion it says was overpaid in to sovereign retirement funds.
The service moreover seeks more layoffs, that are not permitted by steam contracts with its worker unions, and the control to bargain with unions on a probable swap illness caring network that would cost less.
Postal Service losses have been ascent over the past few years as more in isolation letter and bill payments have been switched to the Internet, and the retrogression has harm earnings on promotion and other business mail.
Of specific regard has been the reject in remunerative first-class mail, mostly consisting of personal letters and cards, bills, payments and identical items. First-class letter volume fell 5.8 percent in 2011, 6.6 percent in 2010, 8.6 percent in 2009 and 4.8 percent in 2008. Traditionally, this letter has constructed more than half of complete revenue.
Volume for typical letter " promotion and identical things " softened somewhat, indicating a few signs of economic recovery. But it generates reduction income.
The Postal Service has struggled to find its purpose in an Internet age but insists! it can finally lapse to profitability with legislative changes. It not long ago launched a TV promotion campaign that pokes at the vulnerabilities of email or online payment, observant that papers posted on a fridge or bottle cap house won't obtain "hacked" or pounded by a virus. "Give your customers the updated safety a printed matter or taking provides " with mail," the ad says.
A postal default on billions of dollars in sovereign payments wouldn't result in evident repercussions. There are no crook or polite penalties for failure to pay, and the illness account already contains more than $40 billion so no retiree's benefits are at near-term risk. In June, the Postal Service defaulted on a separate, legally compulsory remuneration in to an worker retirement account but right away says it will make the $1 billion in amassed payments subsequent to a Justice Department review.
Separate proposals not long ago transfered by House and Senate committees would adjust or throw the annual remuneraion necessity whilst incompatible at large on points inclusive financial omission and a reduction to five-day-a-week delivery. Congress is approaching to pass a stop-gap spending measure this week that would expand Friday's remuneration deadline until mid-December.
The Postal Service has mentioned a short-term check of the $5.5 billion remuneration won't change its grave predict of probable failure next year. Officials moreover mentioned Tuesday that the draft legislation currently falls partial in shortening illness caring expenses and sanctioning evident five-day-a-week delivery.
"We're anticipating for long-term, thorough legislation that will compromise the situation and make other changes so the Postal Service may be essential once again " not have more delays that just flog the can down the road," postal orator David Partenheimer said.
Last month, the post office mentioned it will enlarge postage rates on Jan. 22, inclusive a 1-cent enlarge in the cost of ! first-cl ass mail, to 45 cents. But the rate increase, that is scored equally to the rate of on the whole inflation, will make usually a tiny hole in financial losses. The Postal Service hasn't ruled out the probability of serve stamp price increases formed on its apocalyptic financial circumstances.
The group is moreover deliberation extra layoffs and reviewing about 3,600 underused post offices around the nation for closing, many of them in farming areas.
A new Quinnipiac poll found that purebred electorate were broadly in preference of finale Saturday deliveries to help with the agency's financial problems, with 79 percent ancillary it. Smaller majorities adored raising stamp prices " 60 percent " or shutting local branches, about 53 percent.
"The Postal Service is in a tailspin," mentioned Art Sackler, coordinator of the Coalition for a 21st Century Postal Service, that represents the private-sector mailing industry. "Without congressional action, there is a burly odds the Postal Service will have to shut down someday next summer, traffic other vicious blow to the manage to buy and the 8 million in isolation zone jobs that still rely on the mail."