The United States Postal Service netted a loss of $1.9 billion in the second quarter of its 2014 fiscal year, it said Friday.
Despite cost-cutting and recent delivery deals with Amazon, the Postal Service faces significant challenges as first-class mail and other sources of revenue decline. The agency owes close to a $100 billion in benefit payments to its workers, the New York Times reports. But the Postal Service says it has other major problems it needs to correct for it to stay afloat in the future. In March, Jeffrey C. Williamson, the Postal Service's chief human resources officer, testified before a congressional committee and said it could not return to profitability without comprehensive reform legislation. Bills are pending in the House and Senate.
"Some comments in recent news reports suggest that all we need from Congress is help with restructuring our retiree health benefit plan," Chief Financial Officer and Executive Vice President Joseph Corbett said Friday, Reuters reports. "Nothing can be further from the truth. Our liabilities exceed our assets by $42 billion and we have a need for more than $10 billion to invest in new delivery vehicles, package sortation equipment, and other deferred investments.
"We haven't been making the retiree health benefit prefunding payments because we can't," Corbett added. "If legislation reduced the required retiree health benefit prefunding payment, it doesn't provide us with any more cash to pay down our debt or put much needed capital into our business. Only comprehensive postal legislation that includes a smarter delivery schedule, greater control over our personnel and benefit costs, and more flexibility in pricing and products will provide the necessary cash flows."
On Thursday, Amazon announced it had signed a deal with the Postal Service to add 15 additional cities for Sunday delivery, including Austin, Cincinnati, New Orleans, Philadelphia and Dallas. Amazon launched Sunday delivery for Los Angeles and New York in November 2013.