USPS revenues, and losses, increase as parcels growth is offset by mail maturity

Losses at the US Postal Service (USPS) have increased from last year’s $2.7bn to $3.9 billion this year. Controllable losses were $2 billion, an increase of $1.1bn.

Operating revenues at USPS increased by $1 billion to $70.6bn for 2018. Shipping and Packages drove the revenue growth – this segment saw a $2.0bn revenue increases, or 10.1%. This more than offset falls in First Class and Marketing Mail.

First Class Mail volumes fell by nearly 2.1bn pieces, or 3.6%. Package volumes however grew by 394 million pieces – or 6.8%. When mail and packages are rolled together, USPS still saw a net volume fall of 3.2 million pieces. Packages cost more to the consumer per unit than a mail piece so this explains the revenue increase.

”The secular mail volume trends continue largely due to electronic diversion and transaction alternatives. We compete for business in every product line, every day from the first mile to last mile,” said Postmaster General and CEO Megan J. Brennan. “We are aggressively managing our business and continuing to focus on serving our customers and communities. However, the flawed business model imposed by law continues to be the root cause of our financial instability. We are seeking reforms that would allow the organisation to reduce costs, grow revenue, compete more effectively, and function with greater flexibility to adapt to the marketplace and to invest in our future.”

She also said that addressing those urgent reforms would provide an opportunity to deal with broader public issues as well as developing long term solutions to enable the USPS to best meet the needs of its customers.