Financial woes may lead to a suspension of postal operations by October. The U.S. Postal Service is now reporting quarterly losses of $3.3 billion, hurt by declining mail volume and mounting costs for future retiree health benefits.
From October through December of 2011, losses totaled $3 billion. The last quarter of the year is usually the strongest due to increased holiday shipping, but the losses this year were more than losses during the same period in 2010.
Postmaster General Patrick Donahoe warns that at the current rate of loss, the USPS will completely run out of money by October 2012. He says the post office will suspend operations this fall unless Congress acts to address long-term money problems.
He wants to eliminate Saturday mail delivery, raise stamp prices, and reduce health and other labor costs. Although the Postal Regulatory Commission is currently in the process of considering major changes to the U.S. Postal Service network and its First Class Mail service standards in order to lower operating expenses, the Commissioner said only Congress could make the kind of sweeping changes necessary to save the postal service.
The USPS is currently posting losses averaging up to one billion dollars per month due to the fact that mail volumes have declined 25 percent over the last five years, while operational costs have risen.
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