The US Postal Service reported on Friday an increase in revenue in its second fiscal quarter 2020 (January, February, March) along with a bigger net loss, and it warned the coronavirus pandemic is having a negative impact.
The USPS generated total revenue of $17.8 billion, an increase of $348 million compared to the same period last year.
The net loss for the quarter was $4.5 billion compared to a net loss of $2.1 billion for the same quarter last year. Controllable loss for the quarter was $792 million, a slight decrease compared to the controllable loss of $806 million reported for the same quarter last year.
Two factors helped the USPS in the first three months of the year: the Census Bureau mailing and a 7% increase in package revenue, according to Government Executive.
But the COVID-19 pandemic began to negatively affect the Postal Service during late March with declining mail volume, and the impact has continued to worsen since then, the USPS revealed in Friday’s press release.
“It is estimated that the COVID-19 pandemic will substantially increase the Postal Service’s net operating loss over the next eighteen months, threatening the Postal Service’s ability to operate,” it said. “However, since the Postal Service began experiencing the impacts of the pandemic in mid-March, the pandemic did not have a material impact on its second quarter results, although significant impacts are expected for the remainder of the year.”
- First-Class Mail revenue increased by $89 million, or 1.4 percent, year-over-year despite a volume decline of 29 million pieces, or 0.2 percent.
- Marketing Mail revenue declined by $94 million, or 2.5 percent, on a volume decline of 604 million pieces, or 3.4 percent.
- Shipping and Packages revenue increased by $386 million, or 7.1 percent, on a volume increase of 12 million pieces, or 0.8 percent, compared to the same quarter last year.
The USPS said it does not expect its package revenue growth over the medium- to long-term to offset its losses in mail service revenue caused by COVID-19.
Postmaster General Megan Brennan said, “At a time when America needs the Postal Service more than ever, the pandemic is starting to have a significant effect on our business with mail volumes plummeting as a result of the pandemic. As Congress and the Administration take steps to support businesses and industries around the country, it is imperative that they also take action to shore up the finances of the Postal Service, and enable us to continue to fulfill our indispensable role during the pandemic, and to play an effective role in the nation’s economic recovery.”
She also expressed gratitude for the heroism and commitment of the 630,000 postal employees who continued to serve the American public during the pandemic, and said she looked forward to working with policymakers on ensuring the solvency of the Postal Service.
Brennan had announced her retirement in October but delayed it until her successor could be found. On Thursday, the USPS Board of Governors found him – Louis DeJoy, an ally of President Trump who comes from the private sector, will takeover from Brennan on June 15, 2020.