* Election mail, holiday packages help results
* Postal Service lost $3.3 billion in year ago quarter
* CFO forecasts extremely low levels of cash in 2013
WASHINGTON, Feb 8 The U.S. Postal Service lost
$1.3 billion in the October through December quarter, officials
said on Friday, days after the beleaguered mail agency announced
plans to cut back on Saturday delivery to save money.
The Postal Service lost $3.3 billion in the same period a
This year, extra mail tied to the November elections and
stronger revenue from holiday-related packages contributed to a
better quarter, USPS Chief Financial Officer Joe Corbett said.
But he said the Postal Service still expects to face
extremely low levels of cash during 2013.
"The need for such cost-saving initiatives like five-day
mail delivery are borne out by the continuing loss of
first-class mail and the resulting deep and unsustainable
financial losses," Corbett said on Friday.
"We cannot continue to operate on a precipice," he said.
The mail service has been grappling with tumbling mail
volumes as Americans communicate more online, and has struggled
under the weight of massive required payments for future retiree
The Postal Service defaulted last year on two payments to
the federal government and lost almost $16 billion during the
The October through December period, which is the first
quarter of the Postal Service's fiscal year, is typically the
strongest because of the holidays.
Officials said total mail volume during the quarter fell to
43.5 billion pieces from 43.6 billion a year earlier. A dip in
first-class mail volume was mitigated by the 3.6 percent rise in
standard volume, largely due to official election and political
The Postal Service also set aside less this year for its
annual payment for future retiree health benefits, which
contributed to a 9.8 percent drop in operating expenses to $18.9
billion during the quarter.
Last year, the Postal Service had to account for two such
payments after Congress delayed a payment initially due in 2011.
The mail agency defaulted on both but still had to account for
them in financial reports.
Officials said they expect to default again on this year's
$5.6 billion payment, which is due at the end of September.
CALLING ON CONGRESS
Postmaster General Patrick Donahoe again called on the U.S.
Congress to pass legislation alleviating the agency's woes. The
agency wants to stop making the payments for future benefits and
to take over its own health care plan, among other changes.
Lawmakers tried last year to pull together legislation to
overhaul the agency's business model but were unable to agree on
how to do it.
With gun control, immigration and looming federal spending
cuts dominating Congress's attention this year, it appears
unlikely lawmakers will tackle postal legislation soon.
In an effort to spur Congress to act, the mail agency
earlier this week announced plans to stop delivering first-class
mail on Saturdays starting in the first week of August. The
agency said cutting back to five-day mail delivery would save $2
billion a year.
The move prompted an outcry from postal unions and some
lawmakers, who argued the Postal Service was circumventing
Congress. Lawmakers for decades have prevented the Postal
Service from scrapping Saturday delivery.
"My encouragement to Congress would be to please not put any
restrictions on us moving ahead," Donahoe said. "We've got to
make this change, we've got to get savings."
The Postal Service will continue delivering packages on
Saturdays and will keep post offices on their normal schedules.
Packages have been a bright spot in a series of bleak
financial reports as Americans order products from online
retailers such as e-Bay Inc and Amazon.com Inc
The Postal Service said shipping and package revenue rose
4.7 percent over the same quarter a year ago.