USPS Finances: Third Quarter Results

The coronavirus pandemic continues to have an unpredictable effect on the Postal Service, the organization’s latest financial report shows.

The results, released Aug. 7, show USPS reported total revenue of $17.6 billion for fiscal year 2020’s third quarter (April 1-June 30), up 3.2 percent compared with the same period one year earlier.

However, as a result of the pandemic — and to a lesser extent, ongoing mail declines — revenue from USPS mail services, the organization’s largest sales category, continued to significantly decline during the quarter.

Compared with the same quarter last year, First-Class Mail revenue decreased 6.4 percent, while volume declined 8.4 percent. Marketing Mail revenue fell 37.2 percent, while volume dropped 36.4 percent.

Meanwhile, shipping and packages revenue increased 53.6 percent and volume increased 49.9 percent compared with the same quarter one year earlier.

The shipping results, driven by the surge in online shopping due to quarantines and stay-at-home orders during the pandemic, were largely offset by higher expenses, given that packages represent the Postal Service’s most labor-intensive revenue stream.

In addition to increased labor costs to support this volume increase, transportation expenses were affected as logistics restrictions and limitations associated with the pandemic led to fewer modes of available transportation, especially air transportation.

The pandemic also significantly increased the Postal Service’s expenses for supplies and services, such as personal protective equipment, and also increased paid sick leave.

The organization’s total operating expenses were $19.8 billion, up 2.5 percent compared with the same quarter last year. The net loss for the quarter was $2.2 billion compared with a net loss of $2.3 billion for the same quarter one year earlier.

“Significant declines in our mail volumes as the result of the pandemic were largely offset by corresponding growth in our package business, but the reality remains that the Postal Service is in a financially unsustainable position absent significant fundamental change,” said Postmaster General Louis DeJoy.

“As we work on a plan to ensure our future, we will continue to focus on efficiency and revenue growth opportunities while delivering vital services for the country, and our dedicated employees on the front line continue to provide trusted, safe and secure service. Despite our very significant challenges, I remain optimistic about the future of the Postal Service, but we need to get moving to effect change immediately.”

Source: LINK