The US Postal Service is in bad shape, the company wasn’t even able to make a profit after a huge surge in gift shipments occurred over the holiday season.
Officials on Thursday announced that the agency lost $3.3 billion in the holiday quarter, $3 billion worse then the losses the mail service reported in the same period of 2010.
At the current rate the United States Postal Service will run out of money by October 2012 as traditional mail delivery continues to decline. USPS executives claim a 6% drop off in traditional sales for the first fiscal quarter ended Dec. 31.
In a statement regarding the company’s losses the postmaster general said:
“Technology continues to have a major impact on how our customers use the mail.”
USPS hopes to reclaim a profitable structure by growing out of the daily mail delivery sector with more focus on shipping services, however the company is still battling with large pension plan payments, six day delivery and over-staffing which has pushed down profit potential. If USPS had not been forced to pay $5.5 billion towards future retiree health benefits on an annual basis last year it would have only lost $200 million. The postal service is the only agency required to make those government mandated pension plan payments.
Do you think USPS needs to be completely overhauled in order to succeed, including moving employees to traditional 401(k) retirement plans?
