USPS posts Q2 results
The US Postal Service has reported total revenue of $17.5bn for the second quarter (Q2) of 2018, up 1.4% on last year.
It was the usual tale of postal decline & parcel growth. Shipping and Packages revenue grew by $445m, or 9.5%, but First-Class and Marketing Mail revenue fell by a combined $181m. Package volume grew by 69m pieces, or 5.0%, while mail volumes declined by 700m pieces, or 2.1%.
“Despite growth in our package business, our financial results reflect systemic trends in the marketplace and the effects of an inflexible, legislatively mandated business model that limits our ability to generate sufficient revenue and imposes costs upon us that we cannot afford,” said Postmaster General and CEO Megan J Brennan.
USPS said that the “controllable loss” for the quarter was $656m, compared to controllable income of $12m last year. According to USPS: “This change to controllable loss was driven by a $236m increase in the controllable portion of the normal cost of retiree health benefits due to changes in actuarial assumptions and a $364m increase in compensation expenses due to additional hours incurred to support the labor-intensive package business as well as contractual wage adjustments. Additionally, transportation expense grew by $155m due to highway contract rate inflation as well as higher fuel costs.”
Total operating expenses for the quarter were $18.8bn, up $1.0bn, or 5.7%, on last year. Net loss was up from $562m to $1.3bn.
“The continued secular decline in First Class mail, rising costs and legislative and regulatory constraints resulted in larger losses this quarter,” said Chief Financial Officer Joseph Corbett.