The USPS was already seeing declining Mail and increasing Package volume, and in the second half of its fiscal year 2020, it saw those trends accelerate due to the pandemic.
The US Postal Service reported its financial results for its fiscal year (October 1, 2019 – September 30, 2020) on Friday.
While Shipping and Packages revenue rose 25.3% in FY2020, that $5.8 billion makes up a small percentage of total operating revenue for the organization, which came in at $73.1 billion.
“While the Postal Service’s results for the first half of 2020 continued prior-year trends, the COVID-19 pandemic resulted in significant shifts in demand affecting all service categories in the second half of the year,” according to Friday’s announcement.
First-Class Mail declined 4.2% to 2.3 billion pieces, and Marketing Mail declined 15.2% to 11.5 billion pieces.
However, “Mail volume began to show slight improvement in the last few weeks of the year, although this was driven in part by the temporary surge in political and election mail associated with the recent general election cycle.”
The USPS also said, “Although package volume growth has recently slowed since its early fourth-quarter peak, the Postal Service believes that consumer behavior has evolved during the pandemic as the nation has increasingly relied on the safety and convenience of e-commerce.”
It’s worth noting, however, that its rivals are getting more aggressive in trying to take share in ecommerce, particularly UPS.
USPS Chief Financial Officer Joseph Corbett said in today’s announcement that Mail volume may never recover to its pre-pandemic levels. “Further, while we do believe that our package volumes will remain higher given what looks to be a potential permanent shift in consumer behavior, we do not expect our package revenue growth over the medium-to-long term to make up for our losses in mail service revenue caused by COVID-19.”
Postmaster General and Chief Executive Officer Louis DeJoy had the following to say in the USPS press release:
“2020 has been an extraordinary year for the Postal Service and the nation. Amid the tumult of the COVID-19 pandemic – and with the challenges of the election, disruptions in our workforce, rapid changes in our marketplace, and long-term financial distress – the 644,000 women and men of the Postal Service delivered for the American public.
“We remain committed to our mission of service in every American community – delivering the medicine, supplies, benefit checks and important correspondence the public depends upon,” said DeJoy. “We are likewise committed to addressing our significant financial imbalances – which were exacerbated by COVID this year and will cause lasting impacts – through a combination of management actions, and legislative and regulatory reforms.”
Net loss for the 2020 fiscal year was $9.2 billion, an increase of $363 million compared to 2019. Controllable loss was $3.8 billion, an increase of $334 million compared to the prior year. You can find the full press release on the USPS Newsroom website.