By David Shepardson
WASHINGTON (Reuters) - The head of the U.S. Postal Service (USPS) on Friday said the agency faces a "dire" financial position even as it posted a slightly narrower third-quarter loss as package demand soared during the coronavirus pandemic.
Postmaster General Louis DeJoy said USPS has a "broken business model... Without dramatic change, there is no end in sight and we face an impending liquidity crisis," he said.
Later Friday, DeJoy said USPS has implemented a management hiring freeze and is seeking approval for early retirement offers for non-union employees.
He also announced he is reorganizing USPS into three business operating units. He added the organizational changes "do not initiate a reduction-in-force."
USPS said quarterly revenue rose to $17.6 billion, up $547 million. The quarterly net loss shrank to $2.2 billion from $2.3 billion in the same quarter last year.
First-class mail volume declined by 1.1 billion pieces, or 8.4%. Shipping and packages revenue increased by $2.9 billion, or 53.6%, on a volume increase of 708 million pieces, up 49.9%.
Democrats in Congress Friday, including Senators Elizabeth Warren, Gary Peters and Tom Carper asked the USPS inspector general to probe changes made during DeJoy's tenure that they say have slowed deliveries and could threaten 2020 ballot deliveries.
Voting by mail is expected to increase dramatically this fall due to the coronavirus pandemic. Trump has claimed without evidence that absentee voting leads to rampant fraud.
"We are not slowing down election mail or any other mail," DeJoy, a Trump supporter, said Friday at a USPS board meeting.
"The notion that I would ever make decisions concerning the Postal Service at the direction of the president or anyone else is wholly off base," he added.
The Postal Service has faced financial woes with the rise of email and social media, and a measure passed in 2006 requiring it to prefund 75 years of retiree health benefits over the span of 10 years at a cost of more than $100 billion.
The Postal Service has lost $80 billion since 2007.
On Friday, the National Association of Letter Carriers said it filed a union grievance over a new USPS delivery test initiative that imposes restrictions on letter carriers' morning duties.