USPS losses in Q1

Controllable income at the US Postal Service (USPS) for the first quarter of 2018 was $353 million, lower than the same period of 2017 which was $522 million.

According to USPS, this decrease was “largely driven by volume declines in First-Class and Marketing Mail, higher normal cost of retiree health benefits expenses of $140 million and higher transportation expenses of $109 million, partially offset by a reduction in compensation and benefits expenses of $91 million”.

Revenue for Q1 was roughly the same as 2016 at $19.2 billion. Revenue from First Class Mail and marketing mail fell $309 and $248 million largely due to lower volumes. Shipping and Packages business increased by $505 million – or 9.3%.

Operating expenses for Q1 were up to $19.7 billion due to increases in workers’ pay and compensation as well as pensions costs.

The net loss in the quarter was $540 million, as against a net income of $1.4 billion in 2017.

Package volumes grew by 111m pieces, or around 7%, while mail volumes declined by 2.0bn pieces (5%) – continuing what USPS described as a “multi-year trend of increasing package volume and declining letter volumes”.

USPS also noted that it set a new record on 18 December when more than 37m packages were delivered, which was “the most packages delivered in a single day in the organization’s more than 240 year history”.

US Postmaster General and CEO Megan J. Brennan commented: “Although we continue to win customers and grow our package business, these gains are not sufficient to offset continuing declines in our mail business, which is our main source of revenue and contribution.

“We will continue to do everything within our control to improve operating efficiencies, manage expenses, expand our use of technology and keep mail affordable, but these actions must be combined with regulatory and legislative changes.”

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