Americans sent 2bn fewer letters in run-up to holiday season

Americans sent nearly two billion fewer letters in the three months up to the end of December 2011, compared to the same period the previous year. That is according to the latest quarterly financial data filed by the US Postal Service with regulators this week.

For all classes of letters, including those in competitive products, the figures stated that volumes fell 5.4% for the first quarter of the USPS 2012 financial year, compared to the same period in FY 2011.

The 1.87bn reduction in letter volumes saw revenues from letter services fall 4.1% quarter-on-quarter, to $9.77bn for the three months.

For flats, volumes in all classes fell by 944bn pieces, or by 8.8% quarter-on-quarter, with revenues falling 8.1% or by $283m to $3.2bn.

During the busy festive season, however, there was good news from parcel figures, with all classes of parcel in market-dominant and competitive products showing an 8.9% growth, as 69m more parcels were shipped compared to the same quarter in the 2011 financial year. Parcel revenues of all classes grew 9.6% to just over $2.7bn for the quarter.

Market-dominant products

Among the monopoly products within the US Postal Service, its biggest money-making class of mail, First Class Mail, saw volumes fall by 5% in the first quarter of the USPS 2012 financial year

First Class Mail represented just under half (46%) of all US Postal Service revenue during the quarter, but American householders and businesses sent just over a billion fewer First Class Mail letters and parcels in the quarter, compared to the same period in the 2011 financial year.

The decline was led by a sharp drop in single-piece letters, with the quarter showing more than 677m fewer individual letters sent compared to the same period in the previous year, a 9.4% drop.

Within the First Class Mail category, presort letters showed some resilience financially, with revenues increasing 0.9% year-on-year, but volumes fell by 0.8% or by 88m pieces.

Overall First Class Mail revenues declined 5.7% in the quarter, or nearly $500m, compared to the same period last year, to $8.2bn. Volumes overall fell to 19bn pieces.

Among other market-dominant products, the quarter saw Standard Mail revenues falling by $305m or 6.1% compared to the same period the previous year, to $4.7bn, with volumes overall falling by 1.8bn pieces (7.5%) to just over 22bn pieces.

Some of the steepest volume declines were high-density and saturation letters (a 11.2% volume decline) and flats (a 13.6% volume decline). The biggest Standard Mail category, letters, saw a 7.8% volume decline, to 12.7bn pieces.

USPS periodical figures similarly revealed little by way of joy, with periodicals volumes down more than 110m in the quarter, a 6.4% drop. Periodicals revenues for the Postal Service were down 7.5%, about $35.8m below the previous year’s first quarter.

Competitive products

Among those products in which USPS competes with the private sector, the Postal Service saw an overall 14.9% increase in its revenues compared to the previous year, to $2.97bn.

With express mail showing a 2.1% decline in its revenues, and a 3.6% decline in its volumes, much of the growth in USPS competitive shipping services came from parcels.

There was some transfer of volumes from the market dominant to competitive products with First Class Package services becoming a competitive product, having been a market-dominant product the same period in financial year 2011.

But, the parcel select service saw a 32.5% growth in revenues, pulling in an extra $62m in during the quarter, with 30.7m more parcels delivered compared to the same quarter the previous year.

Priority Mail saw revenues up 3.9%, to 1.7bn in the quarter, and its volumes grew 2.7% to just over 231m.

International Mail revenues increased by 7.3% during the quarter, to just under $500m, with volumes overall increasing 4.7% to 78m pieces.