* USPS calls on Congress to pass relief legislation
* Agency could hit borrowing limit in fall
* Package business grew due to holiday shopping
By Emily Stephenson
WASHINGTON, Feb 9 The U.S. Postal
Service's losses shot up to $3.3 billion in the last three
months of 2011, a tenfold jump from the same period a year
before, as its customer base eroded with the growth of email and
The cash-strapped agency recorded the loss during its
traditionally strongest period, the year-end holiday shipping
season, as declines in mail volumes outweighed growth in
"Technology continues to have a major impact on how our
customers use the mail," Postmaster General Patrick Donahoe said
in a statement on Thursday.
"While it has helped us grow our Shipping Services
businesses, it has had a significant negative impact on some of
our much larger sources of revenue."
The agency reiterated its call for Congress to pass
legislation giving the Postal Service flexibility to remake its
Postal officials want lawmakers to allow the agency to tap
into a retirement-fund surplus and permit it to offer new
services. It also wants to end Saturday delivery and eliminate a
large annual payment to prefund retiree health benefits.
"The longer the Postal Service remains in a weak position,
the more damage can be done to our business," Chief Financial
Officer Joe Corbett said during a conference call with
"We need to change and get back to a point where we're
financially stable so that our customers and our suppliers have
faith in us."
The Postal Service lost $5.1 billion the last fiscal year,
which ended on Sept. 30. Corbett warned the agency could hit its
legally mandated borrowing limit this fall. A downturn in the
economy or other unforeseen circumstances could cause a cash
crunch that would force the agency to miss some payments in
order to keep paying employees and suppliers, he said.
Total mail volume dropped 6 percent in the first fiscal
quarter which ended on Dec. 31, the Postal Service said.
Declines in first-class and standard mail revenue outweighed
a boost to the package business from increased online shopping
during the holidays.
Total revenue fell 1.1 percent to $17.7 billion, the Postal
The Postal Service said it needs to reduce operating costs
by $20 billion by 2015, and that it expects large losses to
continue unless it sees results from a plan to close thousands
of facilities, eliminate jobs and restructure its healthcare
program, as well as action from Congress.
Lawmakers remain deeply divided on closing post offices,
ending Saturday mail and eliminating the retiree health benefit
payment. But the losses could pressure Congress to act.
"USPS has reached a new, deeper level of crisis," said
Republican Representative Darrell Issa, author of postal
legislation in the House of Representatives. "Congress must pass
legislation that allows USPS to reduce its operating costs and
realign its network in line with America's declining demand for
The Postal Service, which relies on sales of stamps and
other products rather than taxpayer dollars, said it expects to
default on this year's retiree health prefunding payment.