The USPS reported the results of its most recent quarter, where it saw more of the same: a decline in letter mail alongside growth in package volume. The Postal Service said there was an urgent need for legislative and regulatory changes in order to attain financial stability.
Total revenue for the third quarter of its fiscal year 2018 (April, May, and June) grew 2.4% to $17.1 billion. But there was a net loss of $1.5 billion – that compares to a net loss of $2.1 billion for the third quarter of 2017.
The President’s task force on postal reform will deliver its recommendations to the White House tomorrow and will brief the President upon his return next week, Government Executive reported yesterday, but the publication said the administration will not make the report immediately available to the public.
That could mean anxious stakeholders will be subjected to provocative snippets tweeted by the President before the full report is published, if recent history holds. On the table is the possible privatization of the Postal Service.
First-Class Mail revenue declined by $134 million, or 2.2 percent, and Marketing Mail revenue increased by $63 million, or 1.6 percent. Total mail volume declined by a combined 397 million pieces, or 1.2 percent, compared to the same quarter last year.
Shipping and Packages revenue increased by $475 million, or 10.2 percent, on volume growth of 102 million pieces, or 7.5 percent.
The net loss for the quarter totaled $1.5 billion, a decline in net loss of $651 million compared to the same period last year, the result of nonrecurring adjustments to retirement and retiree health benefit plans to account for revised actuarial assumptions. Excluding the effects of these adjustments, the net loss for the quarter increased by $507 million.
As indicated in the table below, the USPS saw the following growth rates in the third quarter 2018 (ended June 30, 2018) compared to the third quarter of 2017:
- The volume of First-Class Mail declined by 3.59%;
- The volume of Marketing Mail grew by .55%;
- The volume of Shipping and Packages (which is a much smaller percentage of business) grew by 7.48%.
Executives’ Take on the Results
Postmaster General and CEO Megan J. Brennan said, “The root cause of our financial instability is a flawed business model that is imposed by law. We encourage the Congress to engage in a broad public policy discussion and pass postal reform legislation. We support legislation under consideration in the current Congress which would provide immediate flexibility to the organization, allow the Postal Service to invest in our future and continue to provide the prompt, reliable, efficient and universal service the public expects.”
Brennan added that in addition to enactment of postal reform legislation, continued aggressive postal management action and regulatory changes, including a less rigid and more responsive pricing system, are required.
The USPS Chief Financial Officer Joseph Corbett said, “After adjusting for actuarial changes related to retirement and retiree health benefit plans, the quarter results reflect ongoing trends. The secular declines in mail are somewhat offset by package growth, and labor productivity continues to improve. However, absent changes to our business model, net losses are expected to continue.”
You can read the full financial release on the USPS website.