USPS Posts $5.4 B Loss; Governors Undecided on Rate Hike

The U.S. Postal Services reported a net loss of $5.4 billion for fiscal 2007 on revenue of $75 billion and expenses of $80.4 billion.

The USPS attributed these results to one-time costs associated with the Postal Accountability and Enhancement (postal reform) Act, which was signed into law last December.

For the year ended Sept. 30, the $5.4 billion net loss included operating income of $1.5 billion and a $6.9 billion “negative financial impact” from the Postal Act of 2006, according to the USPS.

That shortfall included a $3 billion one-time outlay the USPS made into an escrow fund required under the previous postal law and an additional $5.4 billion the USPS had to pay into the Postal Retiree Health Benefit Fund for 2007. These expenses were partly offset because the postal service was not required to pay $1.5 billion into the Civil Service Retirement System (CSRS), which covered pensions of former employees.

These figures were released at the monthly meeting of the USPS Board of Governors Wednesday.

For fiscal 2008, the USPS said it “has not made a decision on future prices” but projected revenue of $78.2 billion and expenses of $78.8 billion, resulting in a net loss of $600 million.