The U.S. Postal Service is losing traction to online communication, reports Reuters.
The Postal Service reported fourth quarter earnings on Friday that showed a $1.3 billion loss. This comes atop a fiscal year loss of $16 billion.
At a time when social networking pervades Americans’ daily lives, the mail carrier is looking to cut back. Earlier in the week, USPS announced it will halt Saturday mail service and move to a five-day delivery schedule starting in August. They will still deliver packages and keep their post office doors open, but will not physically deliver first-class letters.
A Washington Post survey, conducted in 2010, showed that 70 percent of Americans favored a five-day delivery schedule.
The survey reported that, “a majority of Americans support halting Saturday mail delivery to help the U.S. Postal Service deal with its financial problems.”
Despite the bad news, this year’s fourth quarter results were better than previous years, an uptick attributed to the election and the holiday season.
“This year, extra mail tied to the November elections and stronger revenue from holiday-related packages contributed to a better quarter,” said USPS Chief Financial Officer Joe Corbett.
Along with struggling to keep up with online competition, health care expenses have weighed on the company’s profits. In 2006, Congress legislated that the Postal Service prepay seventy-five years worth of future-retiree benefits over the following ten years.
“No other government agency must do this, and most private companies would have spread those payments over forty years. But the postal service was flush at the time, and Congress figured out that since health-care payments are counted as general government revenue, it could use them to prop up its own books,” wrote Jesse Lichtenstein in a piece on the USPS for Esquire.