The U.S. Postal Service lost $5.5 billion in fiscal 2014, marking another year of red ink despite a second year of growth in operating revenue and a 9 percent increase in the organization’s shipping-and-packaging business.
The prefunding requirement cost the Postal Service $5.7 billion, while the interest-rate adjustment amounted to $1.2 billion, contributing to a net loss that was 10 percent higher than the previous fiscal year.
Despite the latest round of red ink, Postmaster General Patrick Donahoe, who announced plans on Friday to retire in February, said the USPS experienced its strongest quarter in six years, adding that the agency is steadily building financial momentum. But he warned that the organization cannot make a profit without action from Congress.
“We’re not going to be able to continue, without legislation, that curve of improved earnings,” Donahoe said during a conference call with reporters.
A sorely-needed agreement on comprehensive postal legislation has eluded Congress for several years, with lawmakers from both parties opposing bipartisan plans that involve service cuts such as an end to Saturday mail delivery.
USPS Chief Financial Officer and Executive Vice President Joseph Corbett said the Postal Service supports a proposal from Sens. Tom Carper (D-Del.) and Tom Coburn (R-Okla.) that would revise the agency’s prefunding requirement and allow a phasing out of both Saturday and some door-to-door mail delivery if those moves are necessary to make ends meet.
Postal unions oppose that plan because of the service cuts it would involve. “Lawmakers should strengthen the networks while addressing the onerous pre-funding of future retiree health benefits imposed by a lame-duck Congress imposed in 2006,” National Association of Letter Carriers President Fredric Rolando said during a conference call with reporters.
The Postal Service is scheduled to close and consolidate 82 mail processing and distribution centers nationwide in January as part of a plan to cut costs by $20 billion over the next several years. The agency has already shuttered 300 plants since 2006.
The USPS also reduced its service standards in 2012 to save money, increasing the targeted number of days it takes to haul mail to a given destination.
Postal workers and their unions protested the plant closings and reduced service standards throughout the nation on Friday, including at the USPS Board of Governors meeting that morning in Washington, D.C.
“The cuts would cause hardships for the public and small businesses, eliminate jobs and destroy the world’s most efficient and affordable delivery network by driving away mail and revenue,” the American Postal Workers Union said in a statement earlier this week.
More than half of the Senate and 160 House members have called for a one-year moratorium on the service reductions and plant closings.
Corbett said during the conference call that the USPS is examining whether a recent cyber-breach suspected of being carried out by Chinese hackers corrupted the agency’s financial information. “There is no indication at this time that the data was compromised,” he said, adding that the review is expected to take several more weeks.
The Postal Service said its current chief operating officer, Megan Brennan, will succeed Donahoe as postmaster general and chief executive. She will be the first woman to assume the roles for the agency.