WASHINGTON -- The U.S. Postal Service lost $1.3 billion in the final three months of last year, despite a blizzard of campaign advertising for the fall political elections and a big holiday mail and shipping season.

The loss announced Friday was far less than the $3.3 billion in the comparable quarter the previous fiscal year, but still showed the effects of a continued decline in first-class mailing as customers continue to flock to the Internet for emailing, bill paying and the like.

In releasing their financial report, postal officials pleaded anew with Congress to give them the flexibility to better manage the agency -- including to free it from a mandate that they prepay for expected retiree health care costs.

Considering its operations alone, the agency actually made $100 million delivering the mail -- earning $17.7 billion in revenue against $17.6 billion in operating expenses. But the health care funding and some other expenses pushed it to a net loss.

"We can't continue to operate on a precipice," the service's Chief Financial Officer Joe Corbett said in a conference call for reporters.

In a move to cut costs, the Postal Service had announced Wednesday that it plans to end Saturday mail deliveries in August, although it will continue six-day-a-week package delivery -- setting up a possible run-in with some members of Congress who don't want the Saturday cutback.

In October through December, the first quarter of fiscal year 2013, the Postal Service said:

  • Its operating revenue of $17.7 billion was a decrease of less than 1 percent from the same quarter in fiscal year 2012.

  • Total expenses of $18.9 billion were a 9.8 percent decrease from the year-earlier $20.9 billion.

  • First class mail declined 4.5 percent.

  • Standard mail such as advertising increased 3.6 percent with help from the elections.

  • Shipping and package volume increased 4 percent.

  • Total mail volume was 43.5 billion pieces compared to 43.6 billion the previous year.

    Officials also reported record efficiency gains in the workforce. Seizing on that and the operating profit, Fredric Rolando, president of the National Association of Letter Carriers, criticized the idea of cutting Saturday mail deliveries.

    "Today's Postal Service's quarterly financial report shows the folly of making drastic cuts in service as the postmaster general proposed this week," he said in a statement.

    Rolando and others want to hold off on service cuts and find other ways to rebalance finances. The Senate last year passed a bill that would have stopped postal officials from eliminating Saturday service for at least two years while trying other aggressive cost cutting.

    An independent agency, the post office gets no tax dollars for its day-to-day operations but nonetheless remains subject to congressional control.

    "While these losses are an improvement compared to its historic $3.3 billion loss in the first quarter of fiscal year 2012, it certainly makes it clear that the Postal Service continues to face financial challenges that can only be alleviated by comprehensive postal reform legislation," said Sen. Tom Carper, D-Del., and chair of the governmental affairs committee.

    He has scheduled a committee hearing on the problem for Wednesday.