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USPS Touts Ecommerce Initiatives in Plea for Postal Reform

Postmaster General Megan Brennan called on Congress to enact legislation to help the Postal Service after releasing the agency’s second-quarter financial report last week. She called the agency’s challenges “serious but solvable.”

Brennan testified before the House Oversight and Government Reform Committee on Wednesday, saying the USPS has worked with stakeholders on several provisions that can achieve broad support.

She also noted the increasing importance of ecommerce to the organization:

“Our package volume has grown by more than 1 billion packages in the last three years. In FY 2015, we delivered one-third of all domestic packages in the United States. To spur additional growth in our package business, we are partnering with a number of major U.S. retailers to develop customized delivery solutions to meet their particular business needs.

“Examples of the solutions we have developed include our Sunday, grocery, and same-day delivery initiatives, as well as our “ship-from-store” agreements that expedite the delivery of goods from businesses to consumers and improve convenience. These efforts have significantly enhanced the continued double-digit growth in package volume.”

The USPS revealed Tuesday it had grown operating revenue 4.7% in the second quarter to $17.7 billion. The Postal Service breaks out its results, reporting “controllable” income of $576 million for Q2 with a net loss of $2 billion. The controllable figure does not reflect factors such as the legally-mandated expense to prefund retiree health benefits.

The Postal Service attributed the increase in operating revenue to an 11.4 % increase in Shipping and Package volume and pricing strategies.

The Wall Street Journal noted last week that the USPS has been competing with UPS and FedEx for market share in ecommerce; “However, the growth in USPS’s shipping volume also has contributed to rising costs, including an increase in hours worked and transportation expenses. During the latest quarter, operating expenses increased 7.4%.”

The National Association of Letter Carriers, which represents city delivery letter carriers, called the $576 million quarterly operating profit “positive news for an agency that enjoys widespread public support.” It also called on Congress to adopt a “smart, targeted reform package that includes addressing pre-funding, allowing USPS the flexibility to use its invaluable networks for some new products and services, and adopting best private-sector practices in investing the USPS retiree health benefits fund.”

You can see the USPS second-quarter financials on the USPS website, where Brennan’s testimony before Congress is also available.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.