Postal Service posts record $16 billion loss for 2012

[carlos3652]

Postal Service posts record $16 billion loss for 2012
By Aaron Smith @CNNMoney November 15, 2012: 12:41 PM ET



NEW YORK (CNNMoney) -- The U.S. Postal Service announced a record loss of $15.9 billion for the fiscal year 2012, which it blamed primarily on a mandate to set aside billions of dollars for a retirement heath fund.
The Postal Service said that its loss includes $11.1 billion in payments it owes to "prefund" its retiree health benefits. Postal officials have complained for years about these prepayments, which are required by Congress, arguing that its Federal Employees Retirement System is overfunded by $11 billion dollars as of October. They also point out that other federal agencies don't have similar mandates for prefunding.

The Postal Service defaulted on two prefunding payments during its 2012 fiscal year, which ended on Sept. 30.
Its total losses of $15.9 billion are more than triple the $5.1 billion in losses it posted in the prior year, the Postal Service said.

The Postal Service has been struggling with declines in mail revenue, which is a casualty of a sluggish economy as well as email.
The agency has made various efforts to reduce costs. It plans to cut 150,000 workers through 2015, reduce existing staffers' work hours and hike the price on first-class stamps.

Officials have threatened to scale back service to five days, shuttering their low-volume, low-revenue, Saturday service. But the notion of five-day service is intensely unpopular in Congress and unlikely to prevail.
Related: 6 ways to help your post office

Unlike other federal agencies, the Postal Service does not receive taxpayer support, though it has borrowed money from the U.S. Treasury.
Like its business rivals FedEx (FDX, Fortune 500) and United Parcel Service (UPS, Fortune 500), the Postal Service is an independent enterprise.

[vailpass]

Originally Posted by whoman69

Republicans are trying to privatize it so they are sending tons of red ink their way to pave the way.

What do you mean "sending tons of red ink"?

[HonestChieffan]

Originally Posted by Dayze

they'll make up for it by implementing an E tax / E stamp on emails.

joking of course....but I wouldn't surprise me at all.

Better yet if the UN does it.

[Nzoner]

Originally Posted by alpha_omega

Oh, and also get rid of some of the dead weight employees you have.

I've been in the direct mail advertising business for almost 23 years and wow can I tell some stories.

[J Diddy]

Originally Posted by Dayze

they'll make up for it by implementing an E tax / E stamp on emails.

joking of course....but I wouldn't surprise me at all.

I remember a time back in the day when they actually considered something like that.

[theelusiveeightrop]

What's a Post Office?

[chiefzilla1501]

Originally Posted by vailpass

1. If govt. wants the Post Office to operate in the black they need to privatize the operations portion of the P.O.

2. If the govt. is not concerned with the PO operating in the black they, and we, need to view the PO as an expense and not get up in arms when the bill comes due.

3. If the govt. wants neither of the above they need to shut the PO down or sell it off and let the free market meet the unsatisfied demand.

I agree with all points big time except for point 3. You're basically signaling the end of mail as we know it. We may laugh at how archaic it has become, but it's nobody truly wants to stop getting mail. Nobody in the private sector would ever do this because it's not going to make you any money.

The postal service is a necessary government service. But you're right that it's an absolute embarrassment how much it's being protected from the top down. I love the idea of the private sector managing the operations and closing down brick-and-mortar, instead favoring more of a shared distribution model (like FedEx did by partnering with Kinko's).