US Postal Service bleeds $16 billion

The US Postal Service tripled its losses in 2012, bleeding $15.9 billion as the state-owned enterprise faces tough competition and what it calls onerous and unfair retirement funding requirements. The US mail said its losses rocketed in the year to September 30 from a $5.1 billion loss last year, with more than $11 billion sucked off to pre-fund health benefits for service retirees long into the future. As it has over recent years, USPS issued a call for new legislation easing the pressure on it from retirement benefit funding obligations and allowing it more flexibility on delivery times, product range and pricing. The country's main mail operation said that unlike any other agency or business, it is required to pre-fund far into the future health care obligations for future retirees. "It's critical that Congress do its part and pass comprehensive legislation before they adjourn this year to move the Postal Service further down the path toward financial health," said Postmaster General and USPS chief executive Patrick Donahoe. Fighting back the challenge of agile competition from Fedex and UPS in the more lucrative parcel delivery business, USPS said its package operations brought in 8.7 percent more revenue to hit $11.6 billion. But overall mail volume continued to shrink, by 5.1 percent, and operating revenues fell nearly one percent, to $65.2 billion. USPS claimed that its operating losses fell due in part to improved productivity, largely from a 2.3 percent cut in work hours. Chief financial officer Joseph Corbett said that despite having hit its debt limit, USPS continues to meet its delivery obligations and pay suppliers on time. "Our liquidity continues to be a major concern and underscores the need for passage of legislation that gives the Postal Service a more flexible business model to improve its cash flow," said Corbett. The call came as US political leaders head into tough talks aimed at slashing government spending.