Financial woes at USPS

Revenues were down by $1.8 billion at the US Postal Service (USPS) to $69.6 billion for the financial year 2017.

In a statement the USPS said that revenue drop was “driven largely by accelerated declines in First-Class and Marketing Mail volumes”.

USPS mail volumes were down 3.6%, or roughly 5 billion pieces by volume. Package volumes grew by 11.4%, equating to 589 million pieces by volume. While package growth offset the fall in letters, overall volumes of everything posted fell by 4.9 billion pieces.

USPS said that the growth in its Shipping and Packages business “provided some help to the financial picture of the Postal Service as revenue increased $2.1bn, or 11.8%”. However, that growth was offset by the drop in mail volumes, “as well as a $1.1bn 2016 noncash change in accounting estimate and the 2016 roll-back of the exigent surcharge mandated by the Postal Regulatory Commission (PRC) which further reduced revenue by $1.1bn from what it otherwise would have been”.

The net loss was $2.7 billion, a fall in net loss of $2.8 billion by comparison to 2016. The USPS said that this decline in net loss that $2.4 billion was “the result of changes in interest rates, outside of management’s control, that reduced workers’ compensation expense compared to last year”.

Not for the first time, US Postmaster General and CEO Megan J. Brennan described the USPS financial situation as “serious, though solvable”.

Brennan added: “There is a path to profitability and long-term financial stability. We are taking actions to control costs and compete effectively for revenues in addition to legislative and regulatory reform. We continue to optimize our network, enhance our products and services, and invest to better serve the American public.”
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