USPS reports Q3 losses

The United States Postal Service (USPS) has reported a net loss for Q3 of 2016 of $1.567 billion. This was on an operating revenue of $16.6 billion.

The revenue increased by $117 million by comparison to Q3 of 2015, the postal operator still posted a huge loss.

USPS calculated that its revenues were, “approximately $450m less than they otherwise would have been during the quarter because of the expiration of the exigent surcharge on April 10, 2016″.

The losses were just under $1 billion more than Q3 2015, where it posted a $586 million loss. According to USPS: “The increase [in losses] was most significantly impacted by a $1.6bn unfavorable change in workers’ compensation expense as a result of interest rate changes, offset by the $1.1bn change in accounting estimate.”

USPS shipping and packages business did very well, with a revenue growth of $645 millio. This however was offset by a decline in First Class Mail revenues of $379 million. UPSP attributed this largely to the expiry of the exigent surcharge.

USPS also warned that the expiration of the surcharge “will reduce revenue by an additional amount of approximately $500m for the fourth quarter and by almost $2bn annually”.

Commenting on the results, US Postmaster General and CEO Megan J. Brennan said: “We continue to post double-digit gains in package volume and are well-positioned operationally for further growth. Our capital investments are enabling increased efficiencies across the enterprise and improving experiences for our customers.

“Despite the encouraging numbers, net losses continue to mount. Our results in the quarter further underscore the need for legislative reform that provides the organization with greater financial stability.”