If the U.S. Postal Service was a stock, it might have the highest short interest of any on Wall Street. The good old USPS just keeps turning in losses, keeps having inverted liability coverage and keeps asking for better legislation.

Its reported loss for the fiscal first quarter was $354 million. Revenues increased by $334 million, due mostly to 14% growth in its shipping and package services. It also said that this operating loss was about $574 million less than a year ago. The USPS also implemented new pricing for 2014.

Unfortunately, first-class mail volumes continue to decline. Another serious issue is that its liabilities of $63 billion are about $40 billion higher than its assets. Its losses are said to be mounting “due to the persistent decline of higher-margin First-Class Mail, stifling legal mandates, and its inflexible business and governance models.”

More defaults are coming, assuming no change is made. Friday’s press release showed that, without legislative change, the USPS will be forced to default on another required $5.7 billion retiree health benefits prefunding payment due by September 30, 2014 as it will not have enough cash. It also has no ability to borrow additional funds at that date.

Postmaster General and CEO Patrick Donahoe said:

We cannot return the organization to long-term financial stability without passage of comprehensive postal reform legislation. We appreciate the efforts of the House and Senate oversight committees to make this happen as soon as possible.

Unless people decide to start writing letters to each other again rather than communicating by email, texting or social media, the U.S. Postal Service’s core operations will have to rely on the annoying catalog mail businesses to keep things going. At least its core shipping business from online shopping is helping out.

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