A day after announcing higher costs for mailers beginning in July, the USPS said it should be able to reach “record net profit” beginning in 2024. The Postal Service said that since March of 2021, it had taken a more “rational” pricing approach, and said use of new pricing authorities and approach had already generated an annualized revenue increase of $1.9 billion.
The news came in a progress report on the Postal Service’s Delivering for America 10-year plan that it launched last year.
According to the report, “Despite recent inflationary impacts to our financial projections, the combined effects of our progress with pricing policies, network transformation, growth initiatives, and enactment of Postal Service Reform legislation reinforce that the organization should be able to record net profit beginning in the year 2024 and to sustain this financial performance through 2030.”
The USPS said it had taken “judicious” advantage of its new pricing authority for market dominant services that the Postal Regulatory Commission granted it, saying it followed 16 years of pricing policies misaligned with organizational needs.
But not everyone agrees the USPS has been judicious. The Alliance of Nonprofit Mailers tweeted of yesterday’s news of a rate hike for market dominant services, “Price increases on the order of 16% to 20% over 18 months are not “affordable.””
Government Executive cited some industry criticism and noted that the USPS had the authority to raise its First-Class mail rates by 6.507%, but chose to raise them by 6.506% – not exactly a showcase of restraint.
The publication also noted that the rate hike announcement came the same day President Biden signed into law a bipartisan bill to erase much of the agency’s debts and allow it to pursue new lines of revenue.
It also came just 3 days after the USPS instituted steep new surcharge fees impacting some shippers.
Today’s Delivering for America progress report also cited its new USPS Connect service, and it said it had begun strengthening the delivery operations network:
“While we have made progress in designing a best-in-class processing and delivery operations network connected by a fully optimized surface and air transportation network, we have not finalized our plans nor begun to implement the significant changes needed across our enterprise. These efforts – impacting all aspects of our operations and infrastructure – are being refined now and will be deployed in stages this year and in the coming years.”
The report also said the USPS has been investing in postal infrastructure. “Nearly $6.3 billion has been committed from a $40 billion+ commitment to invest in core postal infrastructure over the course of the coming decade — covering delivery vehicles, technology, retail locations, processing equipment, facility buildings and delivery operations. The Postal Service recently ordered an initial 50,000 Next Generation Delivery Vehicles for $3 billion, including 10,019 battery electric vehicles.”
On page 4 of the report, the USPS includes a section on “Financial Targets and Projections.”
Postmaster General Louis DeJoy said the organization had made significant progress in the first year of the 10-year plan, but said the work is far from over. “Delivering for America is helping to drive a new sense of purpose and focus across all levels in the organization,” he said.
The USPS has yet to announce new July rates for “competitive” services including Priority Mail and First Class Package Service (FCPS).
You can find the press announcement on the USPS website, which links to the new report.