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USPS expected to lose $6 billion in 2009

The U.S. Postal Service is not yet confident it has found the bottom of the recession, Chief Financial Officer Joe Corbett told the Mailers Technical Advisory Committee in April.

Losses in February alone were $1.7 billion, with a total mail volume loss for the year of 12.1 percent.

Corbett said USPS expects to lose $6 billion in fiscal year 2009. The Postal Service continues to hope to trim some of the loss through passage of HR 22, which would permit payment of retirees’ health benefits from a trust fund instead of operating revenues. The National Newspaper Association has endorsed the bill, which had 285 sponsors in mid April.

USPS Chief Operating Officer Patrick Donahoe said the Postal Service continued in managing expense reduction to fit the service to declining mail volume. For example, by re-evaluating city carrier routes, combining routes and changing delivery pattern, USPS is saving 1,671 full-time equivalent employees (FTEs) in this fiscal year. Rural routes, where carriers are compensated based on an evaluation of mail volume, mail boxes served and miles driven, more than 2,500 FTEs have been eliminated. Trimming operations on weekends, such as vehicle maintenance, has also contributed cost reductions.

Donahoe said there was also a major effort to reclaim postal equipment, such as the familiar white flats tubs that find their ways into private business offices. Complaints about stolen wooden and plastic pallets are also common. But some equipment is harder to get back than others. In one major city zoo, a mother-and-child orangutan duo gazes happily at visitors from their perch contrived from a USPS mail pallet.

“Some of this equipment, I just don’t think we’re going to get back,” Donahoe said.

USPS continues to examine elimination of Saturday delivery, but would maintain retail operations and possibly package delivery.

NNA has opposed a reduction from six-day delivery.