The USPS noted the net loss would have been more than double, $10.6bn, had it not been for a Congressional decision to postpone a mandated $5.5bn payment to pre-fund retiree health benefits - though that payment is now due this week.

"The size and scope of the loss had long been expected," noted Arthur Sackler, president of Sackler Policy Services as well as director of the Washington, DC-based advocacy group, Coalition for a 21st Century Postal Service. "It just confirms how bad things are for the Postal Service and makes the sense of urgency that already existed all the more real."

In announcing its annual numbers, the USPS noted total mail volume for the year declined by 3bn pieces, or 1.7%, from a year earlier, with virtually all of the volume loss tied to a decline in First Class Mail, which continued to drop, off 5.8% to $32.2bn in revenues. The Postal Service did note standard Mail volume and revenue was up, but that, combined with a nearly $5bn decline in overall operating expenses to $70.6bn, wasn't enough to stem the red ink.

US Postmaster General Patrick Donahoe bluntly said in a statement: "To return to profitability we must reduce our annual costs by $20bn by the end of 2015. We continue to take aggressive cost-cutting actions in areas under our control and urgently need Congress to do its part to get us the rest of the way there."

Donohoe's comments also highlight the challenge facing the USPS - the need for comprehensive Congressional-mandated reform in a very partisan political environment.

Currently there are two reform bills working their way through Congress, that take different approaches to reach the same goals of reducing the overall workforce to better match the reduce mail volume.

The Republican-led House bill takes a strong restructuring view, Sackler noted, creating a solvency authority to decide on post office closings that is in many ways similar to the military base closing commission that periodically decides on which military bases should remain open and which should be closed.

Sackler explained the Democratic-led Senate bill which, like the House bill, has been already been approved on the committee level, transfers money back from the overpaid pension fund and uses that an as incentive to get USPS employees to retire early, while also making a number of other proposed changes.

"They're really different and we'll have to see where this ends up," Sackler said, adding that neither of the bills on the surface pose a lot of negatives for the direct marketing or commercial printing industries. "If both Houses of Congress manage to pass their respective bills and we can get to a Conference Committee, there's a chance of coming up with the compromise package that can really help the Postal Service."

All sides at least seem to be slowly beginning to realize that something needs to be done fairly soon to prevent the Postal Service - which receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations - from running out of money at some point next year.

"What you need to keep an eye on is how much cash they have on hand and whether they can continue pay the help, keep the lights on and pay for fuel to drive their trucks - if not the system shuts down," Sackler said. "That could happen by next summer unless there are some significant changes."