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USPS Calls for Postal Reform as It Reports Flat Revenue in Q3

USPS United States Postal Service

USPS United States Postal ServiceThe USPS saw flat revenue growth in its third fiscal quarter compared to the same quarter last year. The agency noted it saw lower volumes of First-Class Mail and Marketing Mail and continued growth in the lower-margin Shipping and Packages business. It said postal reform legislation and regulatory relief was urgently needed.

Press release follows:

The U.S. Postal Service reported revenue of $16.7 billion for the third quarter of fiscal year 2017 (April 1, 2017 – June 30, 2017). Revenue for the quarter was essentially unchanged compared to the same quarter last year, excluding the effect of a $1.1 billion non-cash change in accounting estimate recognized during the third quarter of fiscal year 2016.

Revenue from First-Class Mail and Marketing Mail decreased $422 million and $150 million, respectively, over the prior year quarter, due largely to lower volumes. These declines in revenue for these products were nearly offset by continued growth in the lower-margin Shipping and Packages business, with third quarter revenue increasing $473 million, or 11.3 percent, in that part of the Postal Service’s business.

Operating expenses for the quarter were $18.8 billion, a decrease of $461 million, or 2.4%, compared to the prior year quarter. Expenses for retiree health benefits and workers compensation declined by $869 million and $1.0 billion, respectively, but were partially offset by $1.2 billion in higher retirement expenses largely driven by changes in Office of Personnel Management actuarial assumptions and interest rates.

The Postal Service reported a net loss for the quarter of $2.1 billion, an increase in net loss of $573 million, compared to the same quarter last year. Controllable loss for the quarter was $587 million, an increase in controllable loss of $35 million, driven by higher transportation costs.

“The growth in our lower-margin package business is not sufficient to make up for the accelerating mail volume declines,” said Postmaster General and CEO Megan J. Brennan. “Our financial situation is serious, but solvable. The continuation of aggressive management actions, and legislative and regulatory reform, will return us to financial stability and enable the Postal Service to maintain the long-term affordability of mail, invest in America’s mailing and shipping industry, and best serve the American public.”

The Postal Service continues to engage with stakeholders to advance H.R. 756, the Postal Service Reform Act of 2017, through the legislative process in the 115th Congress. The Postal Service’s long-term financial stability also depends on the Postal Regulatory Commission establishing a new pricing system that enables the organization to generate sufficient revenues to cover its costs.

In the third quarter, letter mail volumes declined by approximately 1.4 billion pieces, or approximately 4%, while package volumes grew by 133 million pieces, or approximately 11%, continuing a multi-year trend of declining letter mail volumes and increasing package volume. Year-to-date, despite growth in package volume, overall volume has declined by more than 3 billion pieces.

“The volume declines in mail are expected to continue due to the ongoing migration from mail toward electronic communication and transaction alternatives,” said Chief Financial Officer and Executive Vice President, Joseph Corbett. “To address this trend, we have focused on innovations, including mobile and digital strategies, to improve the value of mail. We must also continue to focus on reducing expenses and improving efficiencies, including adjusting employee staffing and scheduling to match the changing workload.”

See the full press release for complete details and tables.

SOURCE: USPS Press Release

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Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. Send news tips to ina@ecommercebytes.com.

4 thoughts on “USPS Calls for Postal Reform as It Reports Flat Revenue in Q3”

  1. HEY USPS DO THIS

    1- Stop the e-packet garbage from China. You already have admitted to losing $$$ on each packet.

    2 – Stop delivering on Sunday the garbage that someone can’t wait for from AMAZON AND WALMART. Losing money when a carrier has to come into the office and drive 80 miles round trip to delivery a package of cat toys that sold for 3.99 with free shipping. HOW STUPID IS THAT.

    3 – Stop doing the USP last mile deliveries. Let them do it themselves as that is what the shipper paid for. USP deliveries not the USPS. You don’t make money on these either.

    4 – Get rid of media mail. Everyone abuses it. Cheap way to ship something flat. Just tell the USPS jerks its media mail.

    5 – Raise the rates of junk mail to the cost of first class. If that piece of junk is so important the sender will pay first class. Who needs all this junk in a mailbox. I’m tired of having to throw all the crap away.

    6 – Get rid of some of the lazy postmasters. Why do you need a postmaster at each location when such location isn’t even big enough for a route or two. In our area within 20 miles we have 8 post offices for a total of 7 routes. All of the routes come out of just 2 offices BUT THERE ARE 7 POSTMASTERS…

  2. Almost agree with the above but the Media mail.
    Nobody is going to pay $6.00 shipping on a book.

    My mail is just as important as Amazon and should be at the same level.
    NOT giving Amazon boxes top priority over my, higher paid, priority packages.

    Ewwww. I hate seeing that mail truck on Sunday.
    People just don’t know how to wait for things.
    I still remember going Saturday shopping because stores were not open on SUNDAY.
    (PS. I love Hobby Lobby because they are closed on Sundays and the employees know they will always have that day off.)

  3. Just exactly what “reforms” is the US Post Office clamoring for other than postal rate increases? The postal rates are already too high. Postal workers pensions are way too high and egregious. There are way too many Post Office locations and need to be consolidated. My hometown population of 426 yes, four hundred twenty-six people have two separate Post Offices one in the “east” and one in the “west” about four miles apart. One too many and between the two there are five full-time workers and three part-timers yet they still need to bring in fill in workers to cover absentees. The largest business in town is a construction outfit with five full-time workers. Reduce the number of Postal employees and Post Offices. Reduce the postal rates. But what do I know other than being involved in mail order business since 1982. Don’t worry, Amazon will put the Post Office and all other businesses out of business so this issue will end up being moot.

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