Postal service says it lost $1.3 billion during the holiday months

The cash-strapped U.S. Postal Service, which announced further cost-cutting moves this week, said Friday that it lost $1.3 billion in the final three months of 2012.

The losses came during the holiday shopping season, which has historically been the post office’s strongest time of the year. 

Postal officials said that mail from November’s election helped tamp down the losses from 2011, when the agency posted red ink of $3.3 billion in the final quarter. 

The Postal Service announced this week that it would no longer deliver letters on Saturday, starting in August, while keeping its package services six days a week in an attempt to cut costs. Package shipping has been on the upswing for the post office in recent years, driven in part by the rise in Internet shopping.

Postmaster General Patrick Donahoe has said that change would save the agency about $2 billion a year and the latest financial figures underscored that USPS needed to make adjustments. The agency says it will just have a few days of operating cash on hand when the current fiscal year concludes at the end of September.

“The encouraging results from our holiday mailing season cannot sustain us as we move deeper into the current fiscal year and face continuing financial challenges,” Donahoe said in a Friday statement.

{mosads}“We urgently need Congress to do its part and pass legislation that allows us to better manage our costs and gives us the commercial flexibility needed to operate more like a business does. This will help ensure the future success of the Postal Service and the mailing industry it supports.”

USPS lost $15.9 billion in fiscal 2012, with $11.1 billion of that red ink coming from defaults on required prepayments for future retiree healthcare. The Postal Service has asked lawmakers to give it relief from those payments, and the agency has already said it will be unable to pay the next $5.6 billion installment, due at the end of September.

The agency had previously asked Congress to allow it to move to five-day delivery, but Donahoe said this week that service officials believed they could act unilaterally. Some Republicans supported that decision, but Democrats such as Senate Majority Leader Harry Reid (D-Nev.) and postal unions sharply criticized the move, questioning whether USPS even has the authority to halt Saturday delivery. 

In announcing its latest losses, USPS also emphasized that revenue from shipping and packaging continues to rise, with a 4 percent jump over the same period the year before. At the same time, first-class mail dipped 4.5 percent.

Lawmakers in both parties and both chambers have vowed to work together on a broad postal reform bill this year after failing to reach a bipartisan agreement in the recent lame-duck session of Congress. The Senate passed a bipartisan measure last April, but House Republicans did not bring a postal bill to the floor.