On Tuesday, the US Postal Service reported a net loss of $1.6 billion in the three-month period ending June 30th. Some key points from Kenneth Corbin's report in
EcommerceBytes Newsflash:
- Buoyed in part by the continued strength of ecommerce, the Postal Service saw healthy growth in its shipping and packages unit, where revenue increased $645 million, or 18 percent, over the same period last year.
- Revenue declines continue in the First Class mail segment, tumbling $379 million in the third quarter of the fiscal year (the USPS is projecting a $2 billion revenue decline in First Class mail revenue for the year).
- The Postal Service is seeking legislation that would remove the current obligations to prefund retirees' health benefits, which continue to weigh on the balance sheet.
But some organizations are calling for the Postal Service to abandon all of its non-postal pursuits - they specifically reject anything other than "letter mail delivery."
In a statement on Tuesday, Citizens Against Government Waste (CAGW) President Tom Schatz said, "The USPS is quick to point out supposed obstacles, while ignoring its exclusive advantages. As mail volume continues to decline, agency leaders persist in peddling the misguided belief that financial salvation lies in accounting gimmicks and starting new non-postal ventures. The USPS should focus solely on its letter mail products and not stray from its original mission. Non-postal pursuits will significantly compound the agency's woes."
And Steve Pociask of the American Consumer Institute said in a statement, "Looking back over recent years, the more specialty delivery services that the U.S.P.S. provides, the worse that service standards for postal customers have become. The more packages they delivery, the more debt grows. In the end, postal customers who rely on the U.S. Postal Service to deliver the mail are the ones that are suffering from the ill-conceived foray into exploratory markets and away from their core service of letter mail delivery."
Online sellers are avid users of the USPS and rely on the service to fulfill orders in a timely and cost effective manner. What do you think of statements that the USPS should focus exclusively on letter mail? Do you see areas where the USPS should not be entering, such as grocery delivery or postal banking?