Despite job cuts, Postal Service still bleeding red ink

“Over the last two years, the Postal Service realized more than $9 billion in cost savings, primarily by eliminating about 105,000 full-time equivalent positions — more than any other organization, anywhere,’’ chief financial officer Joe Corbett said in a statement. “We will continue our relentless efforts to innovate and improve efficiency. However, the need for changes to legislation, regulations, and labor contracts has never been more obvious.’’

The post office is currently in contract negotiations with two of its unions, with two more scheduled to be negotiated next year.

The loss of $8.5 billion in 2010 was $4.7 billion more than the previous year.

Mail volume totaled 170.6 billion pieces, compared with 176.7 billion in 2009, a decline of 3.5 percent. As volume was declining, the post office began service to thousands of new addresses to accommodate population growth and new businesses.

The post office has asked Congress for permission to reduce mail delivery to five days a week and eliminate annual payments for future retiree health benefits. A request from the agency for a 2-cent increase in postage rates to take effect next year was recently turned down by the independent Postal Rate Commission. The post office has appealed that decision in federal court.

While the post office does not receive tax money for its operations, it still must answer to Congress, which has been reluctant to agree to closing of local post offices and centers.

Senator Tom Carper of Delaware, a Democrat, blamed the loss on the recession and “operating restraints placed on postal management.’’ The result, he said, could represent the most serious threat to the post office in its 200-year history.

“If corrective action is not taken quickly, the Postal Service will likely run out of cash and borrowing authority by this time next year, placing its ability to continue operations in serious jeopardy,’’ said Carper, who urged quick congressional action.