The U.S. Postal Service reported on Friday that it managed to slow the hemorrhaging of cash in its latest fiscal year, but said a legislative fix is still needed to put it on a sound financial footing.
The mail agency, which does not rely on taxpayer funds, said its loss for the 2013 fiscal year narrowed to $5 billion from nearly $16 billion in the prior year.
The U.S. Postal Service (USPS) said it benefited from growth in its shipping and packages business as well as aggressive cost-cutting that included a drastic reduction in employee hours. But the agency is still struggling under the weight of heavy mandatory payments into its future retirees' health fund, which was mandated by Congress in 2006, as well as the continued slide in first-class mail, its most profitable product.
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"We've achieved some excellent results for the year in terms of innovations, revenue gains and cost reductions, but without major legislative changes we cannot overcome the limitations of our inflexible business model,'' Postmaster General Patrick Donahoe said in a statement.
The U.S. Postal Service has sought legislation that would relieve the pressure of the retiree payments, shift to a five-day mail delivery service, close some rural post offices and allow it to modernize its business service offerings.
Lawmakers for years have failed to reach agreement, partly because they are reluctant to see postal services rolled back in their districts.
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House Oversight and Government Reform Committee Chairman Darrell Issa, a California Republican, and postal subcommittee Chairman Blake Farenthold, a Texas Republican, said in a joint statement that USPS losses will continue unless Congress steps in soon.
"Based on briefings the Committee has received from USPS, this is likely the last year that ongoing cost-cutting measures will generate significant savings,'' the lawmakers said. "There is no doubt that mail delivery will be affected in the near future without Congressional action to cut costs and restructure USPS finances.''
With few days left on the U.S. congressional calendar, it was seen as unlikely that any bills addressing these issues will pass by year-end.
In the meantime, package services have remained a promising business as more people shop online and need carriers to deliver their goods. Package volumes grew by 210 million pieces this year.
Earlier this week, the USPS announced a potentially lucrative partnership with online retail giant Amazon.com to deliver packages on Sundays in some large cities, including New York and San Francisco. Financial terms of the deal were not disclosed.
The U.S. Postal Service has also entered an arrangement to sell its services out of Staples Inc office supplies retail stores.
The agency's operating revenues rose to $66 billion from $65.2 billion last year, the first growth in revenue since 2008.
To cut costs, the agency reduced work hours by 12 million and consolidated mail processing centers this year.
A plan to cut Saturday delivery of first-class mail was defeated by Congress earlier this year.
Fredric Rolando, president of the National Association of Letter Carriers, said he was encouraged by the improvement in the U.S. Postal Service's finances.
"With the economy gradually recovering from the recession, the Postal Service has returned to operational profitability—with an operating profit of $600 million delivering the mail this fiscal year,'' he said.
Still, this was the USPS's seventh consecutive year of losses as first-class mail volumes continued to tumble, with more Americans communicating and paying bills electronically.
First-class mail, or stamped mail, fell by 2.8 billion pieces in 2013.