UPS *****Not***** USPS

SO ----- YOU THINK THAT ONLY THE US POSTAL SERVICE HAS PROBLEMS AND YOU ARE WORRIED - TAKE A LOOK AND DO NOT MISREAD THIS AS OFTEN HAPPENS, THIS IS UPS NOT USPS.

U.P.S. Earnings Decline 49%, to $445 Million, as Downturn Saps Demand

United Parcel Service, the world's largest package delivery company, said on Thursday that its second-quarter earnings fell 49 percent as the recession cut business demand.

It forecast that its profit in the third quarter will be lower than analysts' projections.

Second-quarter profit declined to $445 million, or 44 cents a share, compared with $873 million, or 85 cents a share, a year earlier. Sales dropped 17 percent, to $10.8 billion.

Package volume in the United States slid for a sixth consecutive quarter as the recession caused businesses to reduce orders amid the highest unemployment rate in 26 years. The company said shipments would remain "significantly below" those for last year. U.P.S. is considered an economic bellwether because it delivers a wide variety of items, including clothing, auto parts and financial documents.

"A lot of us got excited by those initial signs of stabilization, and now we're realizing it's going to be more of a 2010 event before we see real recovery," said Nathan Brochmann, an analyst at William Blair & Company in Chicago. He rates the shares market perform.

U.P.S., based in Atlanta, said profit for the three months through September will be 45 to 55 cents a share, less than the 60-cent average of analysts' estimates.

"We are cautious, frankly," the company's chief financial officer Kurt Kuehn told analysts and investors on a conference call. "We don't have any confidence that either demand or activity is going to pick up substantially" in the next several months.

Domestic volume fell 4.6 percent in the second quarter, the worst results since the company's 1999 initial public offering. The measure will probably decline at a similar pace this quarter, Mr. Kuehn said. International volume tumbled 5.5 percent and will not improve this quarter, he said.

The number of hours U.P.S. airplanes were in operation declined 11 percent, saving 14 million gallons of fuel and contributing to a 54 percent drop in the company's total fuel bill to $539 million as oil prices collapsed from a year earlier.

President Obama Hears From Postal Unions

White House pressured to fix postal budget crisis

Postal workers say a congressional plan to fix the budget shortfalls at the United States Postal Service (USPS) is short sighted and have asked the White House to broker a better solution.
Workers from four USPS unions have written a letter to a senior Obama administration official saying that a House proposal will only serve as a short-term fix. Postal Service officials have said that the agency this year will lose $6 billion and will have a cash shortfall of $1.5 billion.

The House bill would allow the USPS to make up its cash deficit over the next three years by using some of the money set aside for retirement health benefits of current USPS workers.
"It is a good start, but it is increasingly clear that this legislation will not be enough to solve the crisis," the heads of the unions wrote in a July 14 letter sent to Jim Messina, White House deputy chief of staff. "We believe the Obama administration must intervene now to avoid both a political and economic train wreck."

The letter requests a meeting between the unions and the administration.
The unions who signed on to the letter were the American Postal Workers Union, the National Rural Letter Carriers Association, the National Association of Letter Carriers and the National Postal Mail Handlers Union.

The House bill was approved by the Oversight and Government Reform Committee last week and is expected to win full House passage. More than 300 members have signed on as co-sponsors.

While the USPS has blamed its fiscal woes on the bad economy and a shift by Americans from regular mail service to technology such as e-mail, unions have cited a requirement that the agency pay more than $5 billion annually into the fund for future retirees' health benefits. The unions have called for the loosening of those requirements, instituted three years ago.

"A policy decision must be made at the highest levels on whether it makes sense to sacrifice the future viability of the Postal Service to comply with a misguided policy devised by the previous administration that is, in any case, no longer appropriate in the current economic environment," the unions wrote.

Rep. Stephen Lynch (D-Mass.), chairman of the House Oversight and Government Reform subcommittee with jurisdiction over the USPS , said he agrees with the unions that the bill won't fix everything. He said that lawmakers are looking at other fixes proposed by the USPS, including ending weekend delivery service and consolidating post offices. The unions, however, have been skeptical of those plans, he said.

Lynch warned against a government bailout for the Postal Service, calling it the "last, most extreme option."

"I don't know if that's what [the unions are] looking for from the president, but there's little appetite over here for another bailout," he said.

US House Panel Update for HR 22

House panel votes relief for Postal Service

The House Oversight and Government Reform Committee voted Friday to approve HR 22, which would save the U.S. Postal Service $2.3 billion this year in health care costs. The bill allows the Postal Service to pay health care premiums for its current retirees using a trust fund designated for future retirees.

Without the bill, the Postal Service would have to make a $2.3 billion payment in September for its current retirees; postal officials say they cannot pay that bill.

"The Postal Service is facing a financial emergency," said Rep. Edolphus Towns, D-N.Y., the committee chairman. "HR 22 would allow the Postal Service to live to fight another day."

HR 22 was introduced in January and then spent almost six months before the committee. The bill now heads to the full House for a vote. Passage is almost guaranteed: The bill has 337 co-sponsors.