The US Postal Service announced that it has lost $740 million in the second quarter, which was less than in the past quarters. In the same period last year, it got a $5.2 billion loss. In the current fiscal year, the agency has lost $3.9 billion with three months remaining. In 2012, it lost $16 billion.
The US Postal Service was helped by the huge increase in customers shipping packages, which is an area it competes with United Postal Service and Fed Ex. Total mail volume has a downward trend. The agency handled 37.9 billion pieces between April and June. This was down compared to last year’s number of 38.3 billion.
The drop showed the problem the Postal Service has been facing. People have moved away from sending first class mail to do stuff such as paying bills and sending letters. The agency was also mandated to prefund health care benefits for future retirees. This was a major drag to the Postal Service that has already used a $15 billion loan from taxpayers.
In 2013, the Postal Service owes $5.6 billion in order to fund the future retiree health care costs. Last year, the agency owed two payments because it had to make up for the one it withheld in 2011. It is expected to default on the payment that is due on September 30. The agency has already defaulted twice in its payments.
The Postal Service stated that it needs Congress to pass a bill that would help it stop the losses. The agency wants relief from its yearly payments due to the health fund and the end of Saturday delivery of letters.
The Postal Service said it experiences cash crunch. The payment made to the workers compensation benefits in October will leave the agency not being able to pay its operating bills. The agency got losses despite its cost cutting actions.