USPS Posts $329 Million Loss, Receives $70,000 OSHA Fine

Both were announced Feb. 9. USPS is trying to cut $2 billion in operating costs this fiscal year by cutting 40 million work hours. Since the end of 2007, total employee headcount is down 15.1 percent.

The worst of the recession-related decline in mail volume handled by the U.S. Postal Service is over, USPS said Wednesday as Postmaster General and CEO Patrick R. Donahoe announced a first quarter fiscal year loss of $329 million. Excluding the cost of prefunding future retiree healthcare benefits and non-cash adjustments to workers' compensation liability, USPS said it would have posted net income of $226 million for the quarter.

OSHA on the same day announced one willful violation with a $70,000 proposed penalty has been filed against a USPS location on Royal Parkway in Nashville, Tenn., for allegedly allowing workers to use damaged, unrepaired dock levelers. OSHA's Nashville Area Office began an inspection following a complaint that an employee was seriously hurt while lifting a damaged, steel-hinged plate that provides a bridge between the dock and a truck trailer. When the strap the employee was using to lift the plate slipped off the steel flap, the employee fall backward and struck the concrete floor, according to OSHA's account. "The Postal Service was made aware of the hazards related to its use of dock levelers that should have been removed from service," said William Cochran, director of the Nashville Area Office. "The hazard must be addressed and corrected, because this type of disregard for employees' safety and health will not be tolerated."

Donahoe's announcement of USPS' first quarter results suggested the mail service needs to solve its financial situation this fiscal year. "Despite significant cost reductions and efforts to grow revenue," it says, "current financial projections indicate that the Postal Service will have a cash shortfall and will have reached its statutory borrowing limit by the end of the fiscal year. Absent changes in applicable laws, the Postal Service will be forced to default on some of its financial obligations to the federal government on Sept. 30, 2011."

"The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model," Donahoe said. "We are eager to work with Congress and the Administration to resolve these issues prior to the end of the fiscal year." Total mail volume increased by 707 million pieces, 1.5 percent, in the first quarter of FY2011 compared with the same period of FY2010. USPS already is reducing work hours and headcount: The number of career employees at USPS on Dec. 31, 2010, was 578,292, down by 102,721, or 15.1 percent, since Dec. 31, 2007. While it hopes to save $2 billion in operating costs this fiscal year by cutting 40 million work hours, the gain might be offset by rising fuel prices, the agency says. Also, it is negotiating new contracts with the American Postal Workers Union and the National Rural Letter Carriers Association.

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