The U.S. Postal Service turned in a net loss of $2 billion during the third quarter — a year-over-year decline of $1.26 billion — despite an operating revenue increase of $327 million compared to the same period in 2013, the company reported Tuesday.
The Postal Service is staring down a Sept. 30 payment of $5.7 billion toward its retiree health benefit prefunding plan, as mandated by Congress, which officials said USPS can’t afford. Officials have called for Congress to legislate changes to the postal service, something that is “necessary to eliminate this liability and provide a basis for the Postal Service to return to long-term financial health,” according to a company release.
Third-quarter operating revenue ended the period at $16.5 billion on the strength of a 6.6-percent bump in shipping and package revenue, and mail price increases, the Postal Service reported. During the period, standard mail revenue climbed 5.1 percent. The price increase helped revenue from First Class Mail increase by 3.2 percent despite a 1.4-percent drop in volume.
Operating expenses increased by $1.5 billion, year-over-year, to $18.4 billion.
“Due to continued losses and low levels of liquidity, we’ve been extremely conservative with our capital, spending only what is deemed essential to maintain existing infrastructure,” Joseph Corbett, USPS’ chief financial officer and executive vice president, said in a statement. “To continue to provide world-class service and remain competitive, we must invest up to $10 billion to replace our aging vehicle fleet, purchase additional package sorting equipment, and make necessary upgrades to our infrastructure.”