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USPS Delivers Another Multi-Billion Dollar Loss, Competitors Chomping at the Bit

November 12, 2010 12:19 PM EST
According to numbers from an independent agency today, the US Postal Service lost $8.5 billion over the last year, up from a loss of $3.8 billion in 2009, despite making deep cuts to their workforce and other sacrifices over the last several years.

Key contributors to the losses, which the USPS initially pegged at $6 -
$7 billion, were the Internet and a sharp decline in advertising due to the U.S. recession.

Numbers showed $67.1 billion of income for the postal service, weighed against $70 billion in expenses, and a $5.5 billion payment required for future retiree benefits.

Contract negotiations for the postal service with two of its unions are underway, and more are scheduled for next year.

Ideas that the USPS had would be to cut Saturday out of their delivery days, reducing the week to five, and eliminating payments for future retiree benefits.

Notably, first-class mail, consisting of cards, bill payments, letters, etc., have fallen 4.8% in 2008, 8.6% in 2009, and 6.6% for 2010.

First-class mail has traditionally produced more than have of USPS revs, and a recovery in standard mail, such as ads and other business items, isn't enough to boost the top-line.

The USPS currently employs about 596,000, and is the second largest civilian employer in the U.S. behind Wal-Mart (NYSE: WMT).

On the news today, competitors FedEx (NYSE: FDX) and UPS (NYSE: UPS) are trading relatively flat. They traditionally compete with the USPS in express mail and package delivery services, which might see an uptick with one less competitor in the marketplace.


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