WASHINGTON (KRON/AP) – The U.S. Postal Service on Friday reported a net loss of $1.5 billion during the first three months of this year. The USPS said that while more people are using its shipping and package services, those services are costly and revenue from other products have declined.

The Postal Service is an independent agency that receives no tax dollars for its day-to-day operations, but it is subject to congressional control. The USPS has asked to end most Saturday deliveries, a request that is languishing in Congress amid opposition by postal unions.

According to its latest financial statement, which covers Jan. 1 through March 31, the Postal Service sent 420 million fewer pieces of mail compared to the same period last year. First-class mail fell by 2.1 percent and standard mail by 1.1 percent. But a 14.4 percent increase in shipping and package volume contributed to a slight uptick – 1.3 percent or $223 million – in operating revenue.

The increase in operating revenue, however, was tempered by high operating expenses. The Postal Service says it found some relief because of a decline in workers’ compensation cost that quarter. But the agency said it’s still dealing with “higher compensation costs from growth in the labor-intensive shipping and package business, as well as higher retirement contribution rates” mandated by the government.

“Shipping and package services are a key business driver. However, operating margins in this business are lower than in mailing services,” Joseph Corbett, the Postal Service’s chief financial officer, said in a statement. “And, while we’re pleased to see a small increase in controllable income, to improve our margins, we’ll need to make investments in our network infrastructure and delivery vehicles.”

The National Association of Letter Carriers said the figures show that the Postal Service is turning itself around because of an increase in “controllable income.” Controllable income excludes certain factors including a requirement that the Postal Service prefund retiree health benefits.

If the retiree health benefit prefunding expense was excluded, the net loss would have been only $44 million. That would be compared to a loss of $447 million during the same period last year.