* USPS net loss $5.2 bln vs $3.1 bln a year earlier
* Mail volume down, shipping and packages up
* Officials call on Congress to overhaul agency
By Emily Stephenson
WASHINGTON, Aug 9 The U.S. Postal Service's net
loss widened to $5.2 billion during the three months that ended
in June, and the cash-strapped agency warned on Thursday that
without help from the U.S. Congress it will face low cash and be
unable to borrow money this fall.
The Postal Service, which relies on the sale of stamps and
other products rather than taxpayer funding, has been struggling
for years as Americans increasingly communicate online and as
payments to its retiree health benefits program and other
obligations drain its cash.
The mail agency suffered its first-ever default last week on
a legally required $5.5 billion payment for future retiree
health benefits. The agency's inspector general said the Postal
Service could face a $100 million cash shortfall in mid-October.
Lawmakers, who have said they plan to overhaul the Postal
Service and staunch its losses, left last week for a month-long
recess without reaching an agreement on postal legislation.
"We remain confident that Congress will do its part to help
put the Postal Service on a path to financial stability,"
Postmaster General Patrick Donahoe said in a statement.
"We will continue to take actions under our control to
improve operational efficiency and generate revenue by offering
new products and services to meet our customers' changing
While there is not yet a great risk that the Postal
Service's financial straits will impede mail delivery, the
agency has said it needs a significant restructuring to get back
on sound footing.
The Postal Service said its net loss of $5.2 billion,
compared to $3.1 billion for the same period in 2011, largely
came from funds the agency must set aside for the retiree
benefits payment. Even though the Postal Service defaulted and
expects to skip a second payment due next month, it still must
account for the payments in its financial statements.
Even without the payments, a postal official told the
agency's Board of Governors on Thursday that the Postal Service
lost about $1 billion on normal operations as Americans' ongoing
shift to email strangled mail volume.
Shipping services and package delivery were a bright spot in
a bleak report, growing 9 percent in revenue compared to the
same quarter a year earlier. But mail volume fell 3.6 percent to
38.5 billion pieces, the agency said.
Operating revenue during the quarter was $15.6 billion, a
decrease of less than 1 percent from a year earlier, USPS said.
Lawmakers in both houses of Congress have said for more than
a year that they want to pass legislation to overhaul the
agency. The Senate has passed a postal bill that would let the
agency end Saturday mail and tap into a surplus in a federal
retirement fund to offer retirement incentives to workers.
Leaders in the House of Representatives have said that bill
does not go far enough, but they left last week for a recess
until after the Sept. 3 Labor Day holiday without bringing their
version of the postal reform bill up for a vote.
Postal officials said again on Thursday that the agency will
prioritize using its limited cash to pay suppliers and employees
and said they do not believe Congress would ever allow the
service to stop delivering mail.
"There should be no concern about consistent mail delivery,"
Donahoe told the Board of Governors. "It is not in jeopardy."