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USPS Holiday Rate-Hike Helped End-of-Year Revenue

USPS Holiday Rate-Hike Helped End-of-Year Revenue

The USPS implemented surge-pricing during the 2020 holiday season that helped it grow revenue in the last three months of the year – its first quarter of fiscal year 2021 ending September 30.

The US Postal Service reported 25% year-over-year growth in Shipping and Package volumes to 435 million pieces, while sales grew 42.1% to $2.8 billion.

The temporary holiday rate hike was in effect for all commercial domestic competitive packages from October 18 through December 27, 2020, impacting Priority Mail, First-Class Package Service, Parcel Select, and Parcel Return Service.

The USPS said its largest sales category, Mail Services, continued to decline during the first quarter, despite record Political and Election Mail volumes associated with the general election.

  • Compared to the same quarter last year, Marketing Mail revenue declined by $246 million, or 5.6%, on a volume decline of 788 million pieces, or 3.9%.
  • First-Class Mail revenue decreased by $177 million, or 2.7%, on a volume decline of 594 million pieces, or 4.1%, compared to the same quarter last year.

Today’s earnings release noted the pressure throughout the peak season that the broader shipping sector faced on service performance. (It wasn’t just us, in other words.) But while other shipping carriers put certain limits on large customers, “the Postal Service uniquely accepted all incoming packages, further straining its system,” it stated.

Contributing to the pressure it faced were employee shortages due to the ongoing surge in COVID-19 cases and ongoing capacity challenges for moving historic volumes of mail.

Postmaster General and CEO Louis DeJoy said of the latest quarterly results: “While our positive financial results this quarter are certainly welcome, we continue to face systemic imbalances that make our current operating model unsustainable, and the economic impacts of the COVID-19 pandemic will continue to challenge the organization.”

DeJoy said comprehensive reforms were essential.

Reform is also on legislators’ minds. Five United States representatives and two senators announced the reintroduction of the USPS Fairness Act, which it called “bipartisan legislation to provide the United States Postal Service (USPS) much-needed financial relief by ending the agency’s burdensome prefunding mandate on future retiree health benefits.”

The full quarterly press release is available on the USPS.com website.

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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). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

4 thoughts on “USPS Holiday Rate-Hike Helped End-of-Year Revenue”

  1. Like the thieves from Greedbay I’m sure it did. BUT I’m betting their service was as bad as greedbay if not worst. We close our stores the sunday before thanksgiving and don’t reopen until Febuary 1. It cuts down on Greedbay and USPS stupidity and whining buyers who buy it today and whine cause it wasn’t delivered yesterday. This year we will be closing on Oct 31 til well into february cause we will be enjoying our new condo in Las vegas in the winter.

  2. Didn’t help the sellers any! Media Mail took and still takes more than a month to arrive!

  3. Yep, charged more for slower service, shows how bad the CEO is when he doesn’t even know why their in the red every year. Over 5 years of people telling USPS that putting retirement pensions away for workers not even born yet is not feasible

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