The US Postal Service has weathered another rough quarter, reporting a net loss of $1.6 billion in the three-month period ending June 30 as it renews its appeal to Congress for legislation to help the agency right its finances.
Buoyed in part by the continued strength of ecommerce, the Postal Service saw healthy growth in its shipping and packages unit, where revenue increased $645 million, or 18 percent, over the same period last year.
“We continue to post double-digit gains in package volume and are well-positioned operationally for further growth,” Postmaster General Megan Brennan said in a statement, touting the agency’s efforts to drive efficiencies throughout its operations.
But the macro picture is not a pretty one, as revenue declines continue in the First Class mail segment, tumbling $379 million in the third quarter of the fiscal year, owing largely to the expiration of a temporary rate increase. The Postal Service is projecting a $2 billion revenue decline in First Class mail revenue for the year.
So with shipping and parcels up, it’s not all bad news, but Brennan reiterated the agency’s view that it needs relief from Congress to ease the burden of structural expenses associated with its workforce.
“Despite the encouraging numbers, net losses continue to mount,” she said. “Our results in the quarter further underscore the need for legislative reform that provides the organization with greater financial stability.”
The Postal Service is seeking legislation that would remove the current obligations to prefund retirees’ health benefits, which continue to weigh on the balance sheet.
In the third quarter, the single biggest drag was the $1.6 billion in expenses that the agency incurred due to a change in interest rates relating to the Postal Service’s workers compensation program.
Sen. Tom Carper (D-Del.), a longtime advocate of USPS reform legislation, reacted to the latest round of quarterly losses in a statement looking ahead to a “ripe opportunity” to pass a bill to help stabilize the troubled agency when Congress reconvenes next month.
“Despite rises in revenue and shipping volume, the Postal Service is, yet again, reporting significant losses,” Carper said. “The agency’s latest financial report forecasts a reality we’ve known for years – without congressional action, the Postal Service will remain unable to raise enough revenue to cover its costs and will continue to suffer losses that threaten its long-term viability. Each quarter, these reports underscore the Postal Service’s dire situation and remind us that doing nothing cannot be an option.”
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