WASHINGTON: The nearly bankrupt U.S. Postal Service on Thursday reported a quarterly loss of $5.2 billion and warned it will miss another payment due to the Treasury, just one week after its first-ever default on a payment for future retiree health benefits.
From April to June, losses were $2.1 billion more than during the same period last year.
The mail agency said it is being hurt significantly by mounting costs for future retiree health benefits. Those expenses made up $3.1 billion of the post office’s quarterly loss.
Declining first-class mail volume also contributed to losses.
“We have simply reached the point that we must conserve cash,” Thurgood Marshall Jr., chairman of the Postal Service’s board of governors, said in explaining the payment defaults. He cautioned that the mail agency might have to delay other payments if necessary but that day-to-day mail service will not be impacted in any way.
The Postal Service for months has been urging Congress to pass legislation that would allow it to eliminate Saturday mail delivery and reduce the annual health payment of more than $5 billion. The post office defaulted on that payment last week after the House failed to take action before heading home for a five-week break.
The mail agency says it will miss the second $5.6 billion payment due on Sept. 30.
The agency also plans to close mail processing centers to cut costs. The 400-employee Akron center has been spared from the initial round of closings and is slated to remain open at least through 2013; plans call for the 200-employee center in Canton to shut in 2013.