By David Shepardson
WASHINGTON (Reuters) -The U.S. Postal Service said on Thursday it must continue to cut costs and boost revenue or risks requiring a government bailout to help the organization avoid financial collapse.
USPS reported on Thursday a net loss of $9.5 billion for its fiscal year ending Sept. 30, a $3-billion bigger loss than last year, largely due to a year-over-year increase in non-cash workers’ compensation expense. Total (EPA:TTEF) operating revenue was $79.5 billion, up 1.7%.
"If we do nothing more, we remain on the path to either a government bailout or the end of this great organization as we know it," the Postal Service said in its revised restructuring plan issued on Thursday, adding it was facing a "still-precarious financial condition."
USPS has lost more than $100 billion since 2007.
USPS is implementing a 10-year restructuring plan announced in 2021 that aims to eliminate $160 billion in predicted losses over the next decade. USPS now projects $80 billion in losses over the period and plans further cuts to address the shortfall.
At a board meeting on Thursday, Postmaster General Louis DeJoy expressed optimism about the plan for a "financially sustainable, competitive and service-excellent driven future."
First-class mail volume continues to fall, dropping 3.6% year-over-year to 44.3 billion pieces. First-class mail use is down 80% since 1997 and is at its lowest level since 1968.
USPS, which had vowed to break even in 2023 but abandoned that timetable, said despite cutting costs it does not plan to reduce its nationwide network of 31,000 retail locations.
In September, USPS said it would not hike stamp prices in January for the first time in two years. USPS in July raised the price of a first-class mail stamp to 73 cents from 68 cents and increased overall mailing services product prices by 7.8%.
Stamp prices are up 36% since early 2019 when they were 50 cents.
In 2022, President Joe Biden signed legislation providing USPS with about $50 billion in financial relief over a decade. Congress separately gave USPS a $10-billion pandemic expenses loan that it later forgave.