It's the festive color of the holidays. It’s also what the U.S. Postal Service is seeing. Lots of red, without a bailout in sight.
Even though Cyber Monday, one of the busiest shopping days for online retailers, is expected to bring in more sales than last year, the Postal Service is not in much of a position to benefit.
"The problems are much bigger than one holiday season… The postal service needs to work on its cost structure," said Morgan Keegan Transportation Analyst Arthur Hatfield.
The Postal Service is trying to stamp out a multi-billion dollar budget shortfall. Its net loss in its fiscal year ending September 30 was $8.5 billion. Operating revenue came in at $67.1 billion - down one billion from 2009 due mainly to lower volume.
“Over the last two years, the Postal Service realized more than $9 billion in cost savings, primarily by eliminating about 105,000 full-time equivalent positions — more than any other organization, anywhere,” said Chief Financial Officer Joe Corbett said in the earnings release, “We will continue our relentless efforts to innovate and improve efficiency. However, the need for changes to legislation, regulations and labor contracts has never been more obvious.”
It’s the financial blizzard the new Postmaster General Patrick Donahoe must weather - as he steps onto the job this week. He takes the reigns days after the Postal Commission denied raising the price of a first-class stamp by two cents to 46 cents. The Postal Service says the increase would have brought in $2.3 billion in additional revenue.
They say neither snow now rain nor heat nor gloom of night will stop the postal service. What about the budget black hole? At this stage, it'll take a lot more than cyber sales and Rudolph's red nose to guide the Postal Service through this storm.
Stephanie is Squawk Box producer and senior NetNet retail correspondent. Follow her on twitter @StephLandsman
Questions? Comments? Email us atNetNet@cnbc.com
Follow NetNet on Twitter @ twitter.com/CNBCnetnet
Facebook us @ www.facebook.com/NetNetCNBC