USPS finances – Second-quarter results reported
The U.S. Postal Service has reported total revenue of $17.8 billion for fiscal year 2020’s second quarter (Jan. 1-March 31, 2020), up 2 percent from the same period one year earlier.
The coronavirus pandemic, which has severely hurt the U.S. economy, began to cause mail volume to decline in late March, and the impact on USPS has worsened since then. The organization estimates the pandemic will substantially increase its net operating loss during the next 18 months, threatening the Postal Service’s ability to operate.
However, while USPS began experiencing the effects of the pandemic in mid-March, the health crisis did not have a significant impact on second-quarter results. Significant impacts are expected during the remainder of the year.
Here are some additional second-quarter highlights:
• First-Class Mail and Marketing Mail. First-Class Mail revenue increased 1.4 percent, while volume declined 0.2 percent. This growth was due to one-time mailings associated with the 2020 census; otherwise, First-Class Mail revenue and volume would have each declined. Marketing Mail revenue declined 2.5 percent, while volume declined 3.4 percent. Ongoing declines in mail revenue and volume have continued, and the Postal Service projects these declines will be exacerbated by the effects of the pandemic.
• Shipping and packages. Shipping and packages revenue increased 7.1 percent and volume increased 0.8 percent, compared with the same quarter last year. In the near term, the Postal Service anticipates that these trends will accelerate as the nation experiences a surge in online shopping as a result of quarantines, shelter-in-place orders and travel and logistics restrictions stemming from the pandemic.
USPS is serving its customers during this crisis through the delivery of medicine, essential consumer staples, benefits checks and important information, but the organization doesn’t expect its package revenue growth over the medium term or long term to offset its losses in mail service revenue caused by the pandemic.
• Expenses and net loss. Total operating expenses were $22.3 billion for the quarter, an increase of 14.2 percent compared with the same period one year earlier. The net loss for the quarter was $4.5 billion compared with a net loss of $2.1 billion for the same quarter last year.
“Although the pandemic did not have significant impact on our financial condition in our second quarter, we anticipate that our business will suffer potentially dire consequences for the remainder of the year, and we are already feeling those impacts during the last half of March,” said Postmaster General Megan J. Brennan.
“At a time when America needs the Postal Service more than ever, the pandemic is starting to have a devastating effect on our business with mail volumes plummeting as a result of the pandemic. As Congress and the administration take steps to support businesses and industries around the country, it is imperative that they also take action to shore up the finances of the Postal Service and enable us to continue to fulfill our indispensable role during the pandemic and to play an effective role in the nation’s economic recovery.”
Brennan added, “We are grateful for the heroism and commitment of our 630,000 postal employees who continue to serve the American public during this pandemic, and we look forward to working with policymakers on ensuring the solvency of the Postal Service.”
To many useless management people in USPS .