August 10, 2016 Last Updated 12:48 pm

Despite gains in revenue due to package delivery, losses mount at U.S. Postal Service

Periodicals delivered continue their steady decline; Congress will battle it out over a postal reform bill next month, one where one side are working to shift retired worker costs, while conservatives argue for service reductions such as an end to Saturday mail delivery


The U.S. Postal Service reported its earnings yesterday, and while revenue grew due to an increase in package deliveries, losses also grew. The net loss for the third quarter of 2016 was a staggering $1.6 billion.

“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,” said Postmaster General and CEO Megan J. Brennan.

“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.”

Impacting results was the April 10 expiration of an exigent surcharge, which reduced revenue by around $450 million.

USPS-Periodicals“Although the Postal Service achieved strong results in package delivery and Standard Mail volumes, only a slight increase in total revenue was recorded due to a mandated price reduction earlier this year,” said Chief Financial Officer and Executive Vice President Joseph Corbett. “We incurred a net loss resulting, in part, from continued decreases in First-Class Mail volume and systemic financial imbalances associated with our retiree health benefit prefunding requirements.”

Periodical piece delivery continues its steady decline, falling for Q3 in each of the past ten years.

In July, the Oversight and Government Reform Committee produced a bipartisan postal reform bill, and when Congress returns next month will determine the fate of postal service reform.

“Legislation to revamp the financially ailing U.S. Postal Service is needed by the end of the year, or companies ranging from paper manufacturers to online retailers and bankers face the prospect of large postal rate increases. Bulk mailers have lobbied for bipartisan legislation that would shift retired postal workers to Medicare and allow limited rate increases. But fiscal conservatives are advocating for bigger service cuts, including possible termination of Saturday mail delivery,” Zachary Sherwood of Bloomberg reported on Monday.

Photo: Post Office Lunch Break by Thomas Hawk used under Creative Commons Attribution 2.0 Generic.

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