USPS reports net loss of nearly $2.3 billion
The U.S. Postal Service reported total revenue of $17.1 billion for the third quarter of fiscal 2019 (April 1, 2019 – June 30, 2019), a decrease of $16 million, which is essentially flat compared to the same quarter last year.
First-Class Mail revenue declined by $98 million, or 1.6 %, on a volume decline of 361 million pieces, or 2.7%, compared to the same quarter last year. Marketing Mail revenue declined by $121 million, or 3.0 %, on a volume decline of 878 million pieces, or 4.7 %, compared to the same quarter last year. Periodicals revenue declined by $38 million, or 11.2%, on a volume decline of 173 million pieces, compared to the same quarter last year. Meanwhile, Shipping and Packages revenue increased by $250 million, or 4.8%, despite a volume decline of 47 million pieces, or 3.2%, compared to the same quarter last year.
Total operating expenses were $19.3 billion for the quarter, an increase of $797 million, or 4.3%, compared to the same quarter last year. Excluding costs resulting from actuarial revaluation, discount rate changes, and amortization of unfunded liabilities, which are outside of management’s control, expenses increased by $218 million, or 1.2 %, compared to the same quarter last year.
“We continue to face imbalances in our business model that must be fixed through legislative and regulatory change. As we work to effectuate that change, we continue our ongoing aggressive management actions, and remain focused on delivering for the American public, and meeting their evolving business and residential needs,” said Postmaster General and Chief Executive Officer Megan J. Brennan. “We are actively adapting to changes throughout the mailing and shipping landscape, providing customers with new solutions that add value for their investment, improve the service we provide, and drive internal efficiencies.”
Brennan added that the Postal Service’s largely fixed and mandated costs continue to rise at a faster rate than the revenues that can be generated within a constrained business model, which is ill-suited to ensure the long-term sustainability of the Postal Service.
The net loss for the quarter totalled nearly $2.3 billion, an increase of $767 million, compared to a net loss of nearly $1.5 billion for the same quarter last year. Controllable loss for the quarter was nearly $1.1 billion, compared to a controllable loss of $889 million for the same quarter last year.
“We continue to focus on maximising productivity,” said Chief Financial Officer and Executive Vice President Joseph Corbett. “While many of our network costs are fixed to meet our universal service obligations, we reduced work hours by approximately 1.7 million relative to the same quarter last year.”
Commenting on the results David Williams, Taxpayers Protection Alliance said: “In order to address the agency’s flawed pricing strategy and lack of transparency, the United States Postal Service (USPS) needs an immediate and comprehensive overhaul of its operations. Poor financial decisions have plagued the USPS for more than a decade. This surge of red ink is an alarming trend that further proves the need for postal reform.”
Thomas Aiello, National Taxpayers Union noted: “The United States Postal Service’s deep fiscal problems are well documented and worrisome for taxpayers. Their quarterly report has become a routine exercise in bad news and USPS’ poor management is evident in their continued financial losses. By neglecting to enact meaningful financial reform for pricing and transparency issues, the agency continues, and will continue to suffer.”
