Postal Service Lost $281M in Quarter

Declines in the amount of mail being sent continue to plague the post office, which lost $281 million in the last three months.

That, however, was a smaller loss than had been expected, the agency said, largely due to cost cutting.

Losses are expected continue, although they should be reduced by the postal rate increase that took effect Sunday, boosting the price of a first-class stamp to 37 cents.

The revenue figures were presented by Chief Financial Officer Richard J. Strasser at the monthly meeting of the postal governing board. The meeting was held in Anchorage, Alaska.

Mail volume dropped last year with the weak economy, cutting postal revenues. The agency was then battered by hundreds of millions in costs for damage from the Sept. 11 attacks and the mailed anthrax.

Strasser told the board the loss in the third quarter – the three months that ended May 17 – was $80 million less than expected.

He said overall mail volume was down 1.2 billion pieces below the same period last year. That is a 2.5 percent drop.

So far this fiscal year the agency has cut 13,750 workers from the rolls and reduced other expenses.

At the same time, the agency said national on-time delivery of first-class mail averaged 94 percent for the three months, according to a study done by an outside contractor, PriceWaterhouseCoopers.