The United States Postal Service on Friday reported a fiscal third-quarter loss of $2.3 billion on sales of $17.1 billion.
That’s a big loss, but it isn’t all the fault of the USPS. (More on that later.)
The performance, however, has big implications for United Parcel Service(ticker: UPS) and FedEx (FDX), and demonstrates how the changing mail landscape can benefit the publicly traded parcel shippers. Investors, for instance, can expect parcel-shipping rates to rise further as the post office tries to limit losses by controlling what it can.
For the post office during the quarter, first-class-mail sales dropped 1.6% as volume fell 2.7%. Marketing-mail sales dropped 3% on a volume decline of 4.7%. Package sales, however, rose 4.8% on a volume decline of 3.2%. Pricing was higher in the packaging portion of its business. Packing seems to be the primary lever post office management can pull to improve overall profitability.