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Dayton
Business Journal...
U.S. Postal Service
faces default
by Jeff Clabaugh , DBJ Contributor
Wednesday, February 9, 2011
The U.S. Postal Service starts a new fiscal year with a wider
first-quarter loss, and it warns at this rate, it won’t be able to meet
some of its obligations by September.
The Postal Service posted a first-quarter loss of $329 million,
compared to a loss of $297 million a year earlier. Excluding the cost
of pre-funding future retiree health care benefits, which the Postal
Service is asking Congress to allow it to delay, it would have posted a
$266 million fiscal first-quarter profit.
Revenue was $15.3 billion, down 3.3 percent.
The USPS has dozens of Dayton-area offices, including stations and
branches.
“Despite significant cost reductions and efforts to grow revenue,
current financial projections indicate that the Postal Service will
have a cash shortfall and will have reached its statutory borrowing
limit by the end of the fiscal year,” it said in a statement. “Absent
changes in applicable laws, the Postal Service will be forced to
default on some of its financial obligations to the federal government
on Sept. 30, 2011.”
Total mail volume increased 1.5 percent from a year earlier, though it
remains well below peak levels in 2006. Bulk mail volume rose, but not
enough to offset a continued decline in First Class Mail, the postal
service’s most profitable service.
The Postal Service reduced its workforce by another 5,600 employees
last quarter and has cut its workforce by nearly 103,000, or 15
percent, since the end of 2007.
For fiscal 2011, it is targeting another $2 billion in cost reductions,
including continued job reductions. It is also targeting hundreds of
post office locations for closure.
Read it at Dayton Business Journal
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