USPS Loses $1.9 Billion in Second Quarter Despite Operating Profits

David Goldman/AP File Photo

The U.S. Postal Service lost $1.9 billion in the second quarter of fiscal 2014, which ended March 31, though the agency showed some signs of positive growth.

USPS increased revenue $379 million over the same period last year, and continued to cut personnel and other costs. The Postal Service reduced benefits and compensation costs by $300 million compared to the second quarter of fiscal 2013, largely by relying on fewer career employees.

Revenue from first-class mail actually grew slightly compared to last year, despite a continued volume decrease that has played a large role in the Postal Service’s ongoing financial struggles. Overall mail revenue jumped 2.3 percent in the quarter due to the exigent rate increase that went into effect in January. 

Still, USPS’ liabilities outpaced its assets by $42 billion, and the agency is $2.2 billion in the red since the start of the fiscal year. The requirement to prefund retiree health benefits is primarily responsible for the loss, as the Postal Service has actually netted $1 billion in operating profits in fiscal 2014.

“We’re in a deep financial hole,” said USPS Chief Financial Officer Joe Corbett, adding the agency requires a comprehensive reform package from Congress to dig its way out. “Piecemeal legislation…will not provide a firm financial footing.”

Package revenue continued to grow, bringing in $700 million more through the first six months of fiscal 2014 than the first half of fiscal 2013. Postal unions have repeatedly stated the recent string of good news paints a different picture than the one agency management has conveyed.

“Given these positive trends, it would be irresponsible to degrade services to the public, which would drive away mail -- and revenue -- and stop the postal turnaround in its tracks,” said Frederic Rolando, president of the National Association of Letter Carriers. “Lawmakers shouldn't dismantle the postal network that is profitable in meeting the needs of an evolving society.”

The lawmakers themselves, however, interpreted the numbers differently.

“The harsh reality is that it’s likely we’ll continue to see the U.S. Postal Service suffer unsustainable losses that threaten its long-term viability until Congress acts,” said Sen. Tom Carper, who authored a postal overhaul bill that easily cleared a Senate committee in February. “As I’ve said time and time again, Congress and the administration need to come to agreement on comprehensive legislation that reforms, right-sizes and modernizes this American institution.”

Sen. Tom Coburn, R-Okla., who co-sponsored the bill with Carper, emphasized the need to act quickly, calling on Congress to pass something “before another quarter goes by.” The reform effort hit another setback this week, however, when House Democrats refused to get behind the latest attempt by Rep. Darrell Issa, R-Calif., to create compromise legislation.  

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.


When you download a report, your information may be shared with the underwriters of that document.