USPS losses grow significantly

The United States Postal Service (USPS) has posted a net loss of $1.5bn for Q1 of financial year 2019. This is $1 billion more than the same quarter in 2018/19.

Revenues at USPS actually grew by $533 million to $19.7bn by comparison to the year before.

USPS Postmaster General and CEO Megan J. Brennan explained: “We continued to drive growth in our package business and expanded use of the marketing mail channel during the quarter. Nevertheless, we face ongoing financial challenges. We remain focused on aggressive management of the business, legislative reform, and pricing system reform, all of which are necessary to put the Postal Service on firm financial footing,”

“Our nation is best served by a financially sustainable Postal Service that can invest in its future and meet the evolving mailing and shipping needs of the American public,” she added.

The controllable loss for the quarter was $103 million, compared to controllable income of $353 million for the same quarter last year.

“Overall volumes increased this quarter driven primarily by growth in Marketing Mail and our package business, which resulted in total revenue growth of $553 million,” said Chief Financial Officer and Executive Vice President Joseph Corbett. “This growth was offset by increased work hours and related salaries and benefits, increases in transportation costs due to these higher volumes and the continued focus on meeting customers’ needs.”

USPS First Class Mail saw revenues fall by 1.2% on a volume decline of 2.8%. Marketing Mail however grew by 4.9% on a volume increase of 1 billion pieces. Shipping and Packages revenue increased by $516 million, or 8.7 %, on volume growth of 93 million pieces, or 5.4 %, compared to the same quarter last year.

Much of the loss increase comes from a $621 million was down to non-cash workers’ compensation expense increase resulting from changes in interest rates and actuarial assumptions as well as increases in compensation and benefits of $657 million, due to additional hours and contractual wage adjustments, and transportation costs of $207 million, due to higher fuel costs and highway contract rate inflation.

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