US Postal Service 2010 loss swells to US$6 billion

THE United States Postal Service (USPS) is being brought to its knees after suffering a further loss of US$6 billion this year, almost double last year's $3.8 billion loss.

US Postmaster General John Potter now warns that continuing on its current downwards spiral, the US Postal Service will most likely run out of money by the end of 2011.

Mr Potter said in a statement that USPS had revenues of $68 billion for 2010, yet mail volumes had fallen by seven billion pieces to 170 billion pieces of mail.

"A key problem for the USPS has been the refusal of the US authorities to increase the price of mail. But the underlying issue is declining demand for mail services. In line with most postal services in the developed world, USPS is suffering from the shift to electronic communication. Advertising and promotional mail grew, although not enough to compensate for the falls in other market segments," said a report by the UK's Transport Intelligence.

It also said that USPS' financial position is "complicated" by its large healthcare payments which have totalled $5 billion over the past year, a cost the post office has asked Congress to reduce, but Congress has refused to do so.

In a bid to stem the losses, USPS plans to reduce expenses by $120 billion by cutting services such as Saturday delivery and closing post offices. "However political interference is heavy, with Congress restricting its ability to diversify into other areas of business as well as controlling mail prices," the report said.
(Source:www.schednet.com)