Postal Service under water, may shut down
Fri, 18 Nov 2011 00:00:00 GMT —
The weather may not shut the Postal Service down...but a pending pension payment just might.
The numbers are startling. According to a report from the Postal Service Board of Governors, the USPS posted a net loss of $5.1 billion for 2011. They warned earlier this week that if Congress does not move to help soon they will run out of money by the end of next year.
The rise of e-mail and online bill payments combined with the recession drove total mail volume down 3 billion pieces, or 1.7 percent, from 2010, the agency said in a statement.
The agency's total expenses for 2011 were $70.6 billion...while revenue for the 2011 fiscal year ended September 30 was $65.7 billion, down 2.1 percent from 2010.
A looming mandatory payment of $5.5 billion to payment to prefund retiree health benefits, which was extended by Congress to Nov. 18 to help conserve cash, is now in jeopardy too.
"To return to profitability, we must reduce our annual costs by $20 billion by the end of 2015," Postmaster General Patrick Donahoe said in a statement as reported by Reuters.
"We continue to take aggressive cost-cutting actions in areas under our control and urgently need Congress to do its part to get us the rest of the way there," Donahoe added.
Nearly 3,700 post offices and hundreds of processing facilities are being considered for possible closure. The USPS is also considering pausing biweekly payments into a federal retirement program, and it announced a one-cent boost in stamp prices starting in 2012 to try to stave off bankruptcy.
Officials have asked lawmakers to let it end Saturday mail delivery, spin off its retirement and health programs, and renegotiate union contracts...and a couple of bills are working through Congress now.
But the agency says it has limited ability to restructure and may need to cut more than 220,000 more workers by 2015, many through layoffs, if larger organizational changes aren't made soon.
The USPS is not funded by tax dollars...but instead relies solely on revenue paid for postage. Congress, however, does have regulatory oversight of Postal Service operations.
Is it time for the Postal Service to go? Could private industry better handle package and letter delivery? How much has the internet altered your postal usage? Do you even send things "snail mail" anymore?