U.S. Postal Service Reports Net Loss of $1.5B in Third Quarter
There’s good news and bad news in the U.S. Postal Service’s third-quarter report.
The good news is that revenue grew by $400 million during the period of April to June. Cash inflow grew, as well — by 2.4 percent to $17 billion.
The bad news is U.S. Postal Service on Thursday (Aug. 9, 2018) announced a net loss of $1.5 billion in the third quarter of fiscal 2018.
That bad news is tempered, however, by the fact that the loss is $651 million less than it was during the same period last year.
“The root cause of our financial instability is a flawed business model that is imposed by law,” said Postmaster General and CEO Megan J. Brennan in a news release. “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.”
Brennan added that in addition to enactment of postal reform legislation, continued aggressive postal management action and regulatory changes, including a less rigid and more responsive pricing system, are required.
Total operating expenses were $18.5 billion for the quarter, a decline of $240 million, or 1.3 percent, 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.
“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,” said Chief Financial Officer Joseph Corbett. “However, absent changes to our business model, net losses are expected to continue.”
According to the Government Executive website — “the premier digital destination for senior leaders in the federal government’s departments and agencies” — a task force commissioned by President Donald Trump has finished drafting a report recommending steps to put the U.S. Postal Service on firmer financial footing.
The task force is preparing to brief the president on its findings when he returns to Washington, D.C., the website said.
Third Quarter 2018 Operating Revenue and Volume by Service Category Compared to Prior Year
The following presents revenue and volume by category for the three months ended June 30, 2018, and 2017:
SOURCE: U.S. Postal Service news release