The freefall continues.
The holiday season should have been a time for huge shipping profits, but instead the United States Postal Service lost $3.3 billion. We know that our government is terrible at running the shipping operation, but in recent years the losses are getting out of control.
The price for gasoline rising has taken a bite out of the industry margins. The USPS was forced to cut work hours and to reduce pay and benefits by 1.4% to save $180 million, even though it was not nearly as much as would have been needed to get back in the black.
Joe Corbett, the USPS chief financial officer, warned again that the Postal Service will likely default on retirement and health benefits payments later this year, unless Congress changes the current pay formulas.
How congress plans to reform the USPS remains to be seen, but we can’t imagine anything so drastic that could save this dead horse. Time to turn it over to the private sector.