USPS losses pass $14bn mark for the year
The US Postal Service has lost more than $14bn so far in its current fiscal year – with a month still to go in its current reporting period. The latest unaudited financial results for USPS, filed with regulators today, show that after losing $956m in August, for the 11 months of the current fiscal year the Postal Service recorded a $14.3bn loss.
The USPS business plan for the current year had forecast a $14bn loss for the whole 12 months.
However, the actual loss figure includes money the Postal Service is mandated to pay to the federal government by Congress to cover future retiree healthcare liabilities, which USPS is currently refusing to pay.
In its results statement, USPS once again confirmed that assuming Congress does not make a sudden attempt to reform US postal law, it will again default on a $5.6bn payment to the federal government due at the end of this month.
Ignoring the federal government payments that look set to be refused, USPS said its “controllable” operating figures for the 11 months show a $1.95bn loss, which is slightly better than the $2.1bn controllable loss seen in the same period last year, and a fraction ahead of the $2.2bn loss forecast in the USPS business plan.
This slight improvement has come despite a 4.6% decrease in postal service volumes and 0.8% decline in total mail and shipping revenue in the 11 months.
During the 11 months, labour costs have risen 5.5% even as total work hours fell by 2.1%, partly thanks to incentives being offered for staff members to leave the Postal Service this year, while transport costs have increased 4.3% so far this year.
Mail volumes have fallen 5.1% in the year so far and revenues by 4.5%, compared to the same period in 2011, but the Postal Service has achieved a 56% increase in shipping volumes and 21.9% increase in revenues, which includes competitive parcels and express services. However, these numbers are not entirely meaningful since some monopoly services transferred to the competitive portfolio this year.
In the year to date, the Postal Service has seen a 5% decrease in volumes and 4.4% decrease in revenue for its big money-maker, First Class Mail. Standard Mail – which largely comprises advertising mail – has seen volumes down 5.4% and revenue down 5.7% year-on-year.
Postmaster General Patrick Donahoe said last week that USPS would now be profitable if Congress had made necessary reforms to postal legislation, but the opportunity for Congress to make any changes before the November elections is now believed to have closed.
USPS executives want Congress to make reforms to healthcare and pension payment arrangements and allow the Postal Service to stop delivering mail on Saturdays in order to save cash.
Meanwhile, the Postal Service has just opened for registration its latest promotional effort to boost mail volumes and highlight the value that can be achieved in linking physical mail campaigns with online content.
USPS will be offering a 2% discount to registered mailers that use QR codes – or similar two-dimensional barcodes – on their mail campaigns to steer consumers from mailpieces to associated websites.
The 2012 Holiday Mobile Shopping Promotion runs from 7th November to 21st November, and is particularly designed for online merchants to drive consumers to ecommerce websites during the biggest shopping period of the year.
After similar promotions run this summer and summer 2011, the current promotion also offers merchants an additional 1% discount for using Priority Mail to ship a portion of their product orders.
Gary Reblin, the USPS vice president for domestic products, said: “This is the third promotion we’ve offered to demonstrate the effectiveness of integrating mail and mobile technology, and we’re convinced that once marketers try it, they’ll make direct mail and mobile technology a regular part of their marketing mix.”