U.S. Postal Service Exec Testifies Before Congress
"Our most recent calculations reveal that, as of Sept. 30, 2013, we had available liquidity of $3.8 billion, representing only 14 days of average daily operating expenses," Williamson said. "A healthy private sector firm of comparable size would have more than five times the available liquidity.
"Even with the (temporary) exigent price increase implemented on Jan. 26, 2014, we project that our liquidity will remain dangerously low for the foreseeable future. In the event of insufficient cash, the Postal Service would be required to implement contingency plans to ensure that all mail deliveries continue. These measures could require the Postal Service to prioritize payments to employees and suppliers ahead of some payments to the federal government."
Fiscal Year 2013 saw its first revenue growth since 2008—up slightly to $66 billion from $65.2 the previous year—due to Priority Mail enhancement efforts and a partnership with Amazon to test Sunday delivery in select markets.
"The continued effects of the Great Recession on consumer and business behavior and the impact of digital diversion continues to negatively impact financial results. This is especially true for First-Class Mail, our most profitable product," Williamson said, noting First-Class Mail revenue dropped $704 million or 2.4 percent in fiscal year 2013.
Last summer the House Oversight and Governmental Reform Committee passed a postal reform act while the Senate Homeland Security and Governmental Affairs Committee passed another version last month, Williamson said, urging Congress to pass comprehensive reform this year.
"We need to act now to implement strategies designed not only for the Postal Service of today, but for the Postal Service of 10, and even 20 years into the future," Williamson said. "The problems we face are significant, but they are very solvable. With help from Congress, we are confident that the future of the Postal Service can be very bright."