The Brazilian postal service, Empresa Brasileira de Correios e Telégrafos (Correios), has acknowledged that it is trapped in a 'vicious cycle of losses,' as detailed in a document released by its Economic-Financial Board (Diefi). This report, obtained exclusively by G1, outlines how the company’s operational performance has significantly worsened over recent years. As a result, Correios has been facing continuous financial losses, which have deteriorated further in the last few quarters.

A major contributing factor to these losses has been the decline in the quality of operational services, which has led to a subsequent drop in cash flow. The director, Loiane de Carvalho Bezerra de Macedo, emphasized that this decline has resulted in a substantial loss of clients and revenue, creating a self-perpetuating problem. Particularly concerning is the impact on negotiations with large clients, who contribute more than 50% to the company’s revenue. The sensitivity in these negotiations has led to compromised agreements and unmet expectations.

The financial strain has also resulted in the company accumulating significant unpaid debts, amounting to R$ 3.7 billion ($700 million) by September, covering payments to suppliers, employees, and taxes. This situation paints a grim picture for the state-owned enterprise, indicating urgent need for structural changes and improvements if it hopes to stabilize its operations and regain customer trust.