The U.S. Postal Service recorded $68 billion in revenue and $71.8 billion in expenses in fiscal 2009, which ended on Sept. 30 (Candice Towell / GNS)
The U.S. Postal Service finished fiscal 2009 with a $3.8 billion loss — a smaller loss than expected, thanks to some last-minute relief from Congress and an accounting change.
The agency recorded $68 billion in revenue and $71.8 billion in expenses in fiscal 2009, which ended on Sept. 30. Total mail volume fell by more than 25 billion pieces, from 203 billion to 177 billion, a decline of nearly 13 percent.
The loss comes despite nearly $6 billion in cost reductions during the year. Postal managers trimmed more than 110 million work hours — the equivalent of 65,000 full-time employees — and another 40,000 employees left the agency through a series of early retirement offers.
The Postal Service had been on pace to post a much larger loss: Postal officials said until recently that they expected a $7 billion deficit. But Congress passed a law on Sept. 30 allowing the agency to defer $4 billion in payments into its retiree health benefits trust fund. That law, and an accounting change approved by the Postal Regulatory Commission, allowed the Postal Service to take the $4 billion expense off its books.
The fund, which covers health care for future retirees, was created by the 2006 Postal Accountability and Enhancement Act.
Joe Corbett, the Postal Service's chief financial officer, said the agency needs Congress to pass similar legislation in fiscal 2010 — and to approve a new law allowing the Postal Service to deliver mail five days per week.
"Our business model is broken. It doesn't work in a declining volume scenario," he said today. "We need much more flexibility to manage this organization."
Corbett estimated that switching to five-day delivery would save the agency roughly $3.5 billion each year.
Postal managers are predicting a smaller decline in mail volume this year. They expect volume to drop by 11 billion pieces, which would mean about a $2.2 billion drop in revenue. Corbett said the agency plans to cut another 93 million work hours this year, mostly through attrition. About 18,000 people accepted a buyout offer that ended last month, and roughly one-quarter of the agency's 600,000-plus workforce is eligible for retirement.
"We don't have any plans to offer more early retirements at this point," Corbett said. "We're hoping to reduce the work hours through attrition and ... better management."
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