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:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


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