USPS lost $1.7 billion in the third quarter, and the package volume decreased by 41 million pieces year-on-year

It is learned that recently, the United States Postal Service (USPS) announced its financial results for the third quarter of fiscal year 2023 (April 1 to June 30).

According to generally accepted accounting principles (GAAP), USPS had a net loss of $1.7 billion this quarter, in stark contrast to the net profit of USPS in the same period last year. The main reason for this significant change is that the Postal Service Reform Act (PSRA) enacted in April 2022 affected USPS's non-cash earnings. (Because the bill abolished the requirement for the postal service to pay future retiree health benefits in advance each year and canceled all due advance payment obligations.)

“Under our Delivering for America transformation plan, we are making significant progress to improve service for the American public, including the introduction of new products like USPS Ground Advantage, which provide excellent value to our customers,” said USPS Administrator Louis DeJoy.

"At the same time, our teams are working hard to reduce operating costs to effectively offset significant inflation and economic pressures. Our efforts are laying the foundation for continued financial stability as we continue to modernize our processing, transportation, retail and delivery networks."

The financial report shows that the total operating revenue of USPS in the second quarter of 2023 was US$18.6 billion, a decrease of 0.9%, or US$168 million, compared with the same period last year. Compared with the same period last year, First-Class Mail revenue increased significantly by 4.0% (US$221 million), but the delivery volume decreased by 5.9% (678 million pieces). USPS transportation and parcel revenue remained relatively stable, but the delivery volume decreased by 2.4% (41 million pieces). Marketing mail revenue fell by 8.8% (US$333 million) due to a decrease in delivery volume of 2.6 billion pieces (16.0%).

The USPS noted that the reasons for the decline in marketing mail revenue include: economic pressures leading to continued reductions in advertising spending; rising costs for print media production in an inflationary environment; and a decrease in revenue and volume of political and election mail compared to the same quarter last year (primarily due to differences in election timing).

In terms of expenses, USPS' total operating expenses for the quarter were $20.5 billion, an increase of $1.8 billion, or 9.6%, from the same period last year. Adjusted operating expenses, calculated on a non-GAAP basis, increased by $382 million, or 2.0% from the same period last year.

“The continued increase in costs across all aspects of our operations poses a significant challenge,” said USPS Chief Financial Officer Joseph Corbett. “We remain committed to managing costs within our control, reducing work hours by 6 million compared to the same quarter last year and focusing our efforts on optimizing transportation and other operating expenses.”

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