Postal Service Delivers News of $3.8 Billion Deficit

Washington, D.C. (AHN) – The U.S. Postal Service expects a loss of $3.8 billion for 2009, the agency reported Monday.

The loss comes after the post office cut 40,000 employees and took other measures that saved $6 billion in costs and deferred a health benefit payment of $4 billion.

“Our 2009 fiscal year proved to be one of the most challenging in the history of the Postal Service,” Chief Financial Officer Joseph Corbett said in a statement. “The deep economic recession, and to a lesser extent the ongoing migration of mail to electronic alternatives, significantly affected all mail products, creating a large imbalance between revenues and costs.”

The service reported less revenue even as expenses were cut. Operating revenue was $68.1 billion, compared to $74.9 billion last year. Expenses were $71.8 billon; in 2008, expenses were $77.7 billion.

One cause of the deficit could be seen in a drop in mail volume. The postal service reported handling 177.1 billion pieces, a decline of 25 billion pieces from the previous year.

In a financial statement included in the report, auditor Ernst & Young said there was “significant uncertainty” whether USPS would be able to make a $5.5 billion payment for retiree health benefits that is due on Dec. 31, 2010.

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