Postal Service loses $8.5 billion in fiscal 2010

The U.S. Postal Service’s net losses widened to $8.5 billion in fiscal 2010, more than twice the total for the preceding year, according to figures released at Friday’s board of governors meeting. Of that amount, $2.5 billion stemmed from accounting adjustments related to workers compensation liability. The remaining $6 billion is identical to a preliminary figure cited by outgoing Postmaster General John Potter at a news conference last month.

For fiscal 2010, operating revenue totaled $67.1 billion, down $1
billion from the preceding year. Overall mail volume fell from 176.7
billion to 170.6 billion pieces. In fiscal 2011, the agency will exhaust the remaining $3 billion of its $15 billion in borrowing authority from the U.S. Treasury, Chief Financial Officer Joseph Corbett told the board Friday, but nonetheless expects to be out of cash by the end of September.

“Clearly, we need some fundamental change to the organization,” he said.

Friday’s public meeting was the last for Potter, who is retiring next month after almost 9-1/2 years on the job. Board Chairman Louis Giuliano hailed Potter as a “terrific change agent,” but called his incoming replacement, Deputy Postmaster General Patrick Donahoe, a “strong, capable successor.”

In fiscal 2009, the Postal Service’s net loss was $3.8 billion, but the agency benefited in that case from Congress’ decision to defer most of a required $5.5 billion payment to a retiree health care fund. Lawmakers provided no such relief in fiscal 2010, meaning that the Postal Service had to kick in $5.4 billion at the end of September.

Without that payment and the added workers comp liability, the agency’s fiscal 2010 operating loss would have been $500 million, or less than half the comparable fiscal 2009 figure.