USPS faces liquidity crisis

US media reports that the US Postal Service (USPS) is looking for a $75 billion bailout in the form of cash, grants and loans to avert a projected liquidity crisis in the coming months. 

The US Postmaster General Megan Brennan has said that the USPS will run out of cash later this year without the bailout.

Thanks to the COVID-19 pandemic the postal service faces a $13 billion revenue loss on top of its already large financial woes. Over the next 18 months the crisis will hit USPS for $22 billion and within the next decade it is set to be $54 billion in the red, threatening its ability to operate.

Brennan said “We are at a critical juncture in the life of the Postal Service. At a time when America needs the Postal Service more than ever, the reason we are so needed is having a devastating effect on our business

“The Postal Service relies on the sale of postal products and services to fund our operations, and these sales are plummeting as a result of the pandemic. The sudden drop in mail volumes, our most profitable revenue stream, is steep and may never fully recover.”

Oversight committee chairwoman Carolyn Maloney said, “I want to commend the brave men and women of the Postal Service for all they are doing in the midst of this pandemic…The Postal Service is holding on for dear life, and unless Congress and the White House provide meaningful relief in the next stimulus bill, the Postal Service could cease to exist.”