By Elvina Nawaguna
WASHINGTON Feb 7 The U.S. Postal Service
narrowed losses in its latest quarter, as a surge in online
shopping and package delivery boosted revenues during the busy
The agency, which has lost money for 19 of the last 21
quarters, lost $354 million in its fiscal first quarter ended
Dec. 31, compared with the same quarter a year ago when it
posted a net loss of $1.3 billion.
Revenues from shipping and package delivery rose by 14.1
percent to $479 million, driven by growth in online shopping and
a lucrative deal with online retail giant Amazon to
deliver packages on Sundays in some U.S. cities, the agency said
The Postal Service has been grappling with tumbling mail
volumes as Americans communicate more online, and as massive
payments for its future retirees' health benefits take a toll. A
2006 law requires the Postal Service to fund 75 years worth of
its future retirees' healthcare by 2016.
First-class mail volume, its most profitable product,
declined by 4.6 percent, leading to a $209 million drop in
revenues from that type of mail. Operating revenues increased by
1.9 percent to $18 billion.
The agency has sought legislation to allow it to become more
innovative and to find other ways to raise revenues, including
switching to a five-day delivery system and managing its own
healthcare system. So far Congress has failed to pass reform
Postmaster General Patrick Donahoe said in a statement that
he was proud of what the agency had achieved in reducing losses,
but that its financial outlook remains grim.
"We cannot return the organization to long-term financial
stability without passage of comprehensive postal reform
legislation," he said.
Industry groups argue that the Postal Service's improving
finances undercut the need for some of the drastic reforms the
agency has sought, like raising postage fees and a five-day
"Today's Postal Service figures for the first quarter of
(fiscal) 2014 are highly encouraging and show why the postal
network must be maintained and strengthened, not degraded," said
Fredric Rolando, president of the National Association of Letter
Higher postage rates would turn more people and companies
away from the Postal Service and lead to more losses, said Ben
Cooper, co-manager of the Coalition for a 21st Century Postal
Service, a group seeking postal reform.
But Richard Geddes, an expert in postal issues and an
associate professor at Cornell University's Department of Policy
Analysis and Management, said the agency is still lagging behind
its counterparts in other developed countries, and urgently
needs lawmakers to allow it to adapt to the changing market.
"My hope would be that postal reform in the U.S. would take
a deeper look than just what happens in any quarter and think
about allowing this firm to adapt to the new marketplace,"
Geddes said. "I feel sad for the U.S. Postal Service that they
have not been legally allowed to adapt."