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Post Office reports $8.5 billion loss for the year

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Washington, D.C.—The U.S. Postal Service reported its biggest annual loss ever, $8.5 billion for its fiscal year ended Sept. 30, a figure unexpectedly larger than previous estimates of $6 million to $7 billion in losses.

The Postal Service lost $3.8 billion last year.

For its current fiscal year, the Postal Service reported revenue of $67.1 billion, down about $1 billion from fiscal 2009 revenue. However, expenses of $70 billion, a required payment of $5.5 billion to fund future retiree benefits and another $2.5 billion paid to a federal workers’ compensation insurance fund pushed the Postal Service into the red once more.

Outgoing Postmaster General John E. Potter, who will leave his post Dec. 3, has said that, without relief from its benefits obligations and approval of a postal rate increase, the Postal Service will go broke by the end of fiscal 2011.

In September, the Postal Regulatory Commission denied the Postal Service’s request for a rate hike averaging 5.6%, and much higher rate increases for several forms of commercial mailing.

The Postal Service has been buffeted as consumer and businesses have increasingly turned to electronic forms of communications. The overall volume of mailed pieces for 2010 was 170.6 billion, down 3.4% from the 176.6 billion pieces delivered in 2009.

Commercial mailers continue to be the brightest spot in an otherwise bleak landscape for the Postal Service. Standard mail volume, used most frequently for direct-mail campaigns, showed an increase of 8.9% in the fourth quarter. However, first-class mail, which is more profitable than standard mail, saw volume drop 6.9% in the quarter.

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