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Postal Service lost $1.9 billion in second quarter, despite uptick for first-class mail

The Postal Service on Friday reported a second-quarter loss of $1.9 billion, despite increasing its revenue by $379 million and growing its shipping-and-package business by 8 percent compared to the same period last year.

The latest display of red ink prompted more calls for Congress to pass postal reforms to help fix the agency’s persistent financial problems. Friday’s numbers marked the 20th time in the last 22 quarters in which the USPS has sustained a loss.

(Andrew Burton/Getty Images)

The Postal Service lost $5 billion last year while reporting its first revenue gain since 2008. The agency has not made a profit since 2006.

USPS Chief Financial Officer Joseph Corbett said during a news conference that the agency desperately needs legislation that would allow “a smarter delivery schedule, greater control over our personnel and benefit costs and more flexibility in pricing and products.”

But postal unions worry about potential cuts in service that lawmakers have proposed in the past, including eliminating Saturday letter delivery.

The National Association of Letter Carriers said Friday that the USPS numbers are moving in the right direction, noting that its bedrock first-class mail revenue rose by $2 million compared to the same quarter last year, and that shipping-and-package revenue increased by $252 million. 

“Given these positive trends, it would be irresponsible to degrade services to the public, which would drive away mail — and revenue — and stop the postal turnaround in its tracks,” NALC president Fredric Rolando said in a statement.

The labor leader also renewed calls for eliminating a 2006 congressional mandate that requires the Postal Service to prefund retiree health benefits to the tune of about $5.7 billion per year. The USPS has defaulted on the last three annual payments and expects to do so again this year.

The NALC views that expense as the biggest factor for the repeated net losses.

USPS officials have called for a restructuring of the prefunding requirement, but Corbett downplayed the notion that such a plan would balance the agency’s books.

“Nothing could be further from the truth,” he said. “Our liabilities exceed our assets by $42 billion, and we have a need for more than $10 billion to invest in new delivery vehicles, package sortation equipment and other deferred investments.”

The uptick in revenue from first-class mail occurred despite a 4.1 percent drop in volume compared to the second quarter of 2013. A postage rate increase that the Postal Service implemented in January helped drive the revenue gain.

The agency increased its postal rates by 3 cents for first-class letters and other mail, representing the largest rise in 11 years. Postal regulators approved the higher rate for only about 24 months, determining that the USPS needed the extra revenue to recover recession-related losses. 

Shipping-and-package volume climbed by 8 percent, improving the Postal Service’s standing in a competitive field that includes well-established heavyweights such as the United Parcel Service and Fed Ex. The agency is increasingly relying on its shipping-and-package business to help improve its financial situation. 

Several lawmakers used Friday’s report to justify their calls for Congress to pass postal legislation.

“As I’ve said time and again, Congress and the administration need to come to agreement on comprehensive legislation that reforms, right-sizes and modernizes this American institution,” said Sen. Tom Carper (D-Del.), who has teamed up with Sen. Tom Coburn (R-Okla.) on a bill to overhaul the USPS.

The bipartisan plan would restructure the prefunding requirement, in addition to allowing the Postal Service to phase out Saturday and some to-the-door mail delivery if those moves are necessary to make ends meet.

Carper said the legislation would “make the changes that the Postal Service needs to thrive into the future.”

Follow Josh Hicks on TwitterFacebook or Google+. Connect by e-mail at  josh.hicks(at)washpost.comVisit The Federal Eye, and The Fed Page for more federal news. Submit news tips and suggestions to

Josh Hicks covers Maryland politics and government. He previously anchored the Post’s Federal Eye blog, focusing on federal accountability and workforce issues.

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