USPS records US$1.5bn losses for Q3 2018

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The US Postal Service (USPS) reported total revenue of US$17.1bn for the third quarter of 2018 (April 1–June 30, 2018), an increase of US$402m, or 2.4%, compared to the same quarter last year.

First class mail revenue declined by US$134m, or 2.2%, and marketing mail revenue increased by US$63m, or 1.6%. Total mail volume declined by a combined 397 million pieces, or 1.2%, compared to the same quarter last year. Shipping and packages revenue increased by US$475m, or 10.2%, on volume growth of 102 million pieces, or 7.5%.

The net loss for the quarter totalled US$1.5bn, a decline in net loss of US$651m compared to the same period last year; this is the result of nonrecurring adjustments to retirement and retiree health benefit plans to account for revised actuarial assumptions. Excluding the effects of these adjustments, the net loss for the quarter increased by US$507m.

Megan J Brennan, postmaster general and CEO, USPS, said, “The root cause of our financial instability is a flawed business model that is imposed by law. We encourage congress to engage in a broad public policy discussion and pass postal reform legislation.

“We support legislation under consideration in the current congress which would provide immediate flexibility to the organization, allow the postal service to invest in our future and continue to provide the prompt, reliable, efficient and universal service the public expects.”

Total operating expenses were US$18.5bn for the quarter, a decline of US$240m, or 1.3%, compared to the same quarter last year. Inflationary pressures on salaries and benefits, as well as fuel and transportation costs were offset by the actuarial changes referred to above.

Joseph Corbett, chief financial officer, USPS, said, “After adjusting for actuarial changes related to retirement and retiree health benefit plans, the quarter results reflect ongoing trends.

“The secular declines in mail are somewhat offset by package growth, and labor productivity continues to improve. However, absent changes to our business model, net losses are expected to continue.”

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Dan joined Postal and Parcel Technology International in 2014 having spent the early years of his career in the recruitment industry. As assistant editor, he now produces daily content for the website and supports the editors with the publication of each exciting new issue. When he’s not reporting on the latest logistics news, Dan can be found apprehensively planning his next DIY project for his new home.

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