US Postal Service ends FY 2011 with US$5.1 billion loss

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The US Postal Service ended its 2011 fiscal year (1 October 2010 – 30 September 2011) with a net loss of US$5.1 billion. The year-end loss would have been approximately US$10.6 billion had it not been for the passage of legislation that postponed a congressionally mandated payment of US$5.5 billion to pre-fund retiree health benefits.

Total 2011 mail volume declined by three billion pieces, or 1.7 percent, from 2010. The Postal Service’s largest and most profitable product, First-Class Mail, continued its year-on-year decline, from US$34.2 billion in 2010 to $32.2 billion in 2011 (5.8 percent), which dwarfed continued growth in its more competitive products, packages and Standard Mail.

USPS Shipping Services revenue, which includes Priority Mail and Express Mail, increased US$530 million in 2011 (6.3 percent). The increase in Shipping Services revenue was driven by strong growth in the Parcel Select and Parcel Return Services, due to increased mailings of packages, as customers continued to use the internet more often to purchase products. Revenue from Standard Mail increased by US$495 million (2.9 percent) on a volume increase of two billion pieces (2.6 percent).

“The Postal Service can become profitable again if Congress passes comprehensive legislation to provide us with a more flexible business model so that we can respond better to a changing marketplace,” said Postmaster General and CEO Patrick Donahoe. “To return to profitability we must reduce our annual costs by US$20 billion by the end of 2015. We continue to take aggressive cost-cutting actions in areas under our control and urgently need Congress to do its part to get us the rest of the way there.”