The U.S. Postal Service reported a net loss of $1.7 billion in the third quarter, placing the blame on the 2022 Postal Service Reform Act which was heralded as a way to help provide relief for the USPS from the burden of years of unfunded retiree healthcare benefits.
The reasoning for the GAAP loss appears complicated. According to the USPS, under-funded retirement plans, workers’ compensation expenses hit by actuarial revaluation and discount rate changes, and a non-cash impact from the PSRA – the major factor – all contributed to the loss. It was a sequential improvement from a $2.5 billion loss in Q2, but the red ink continues to collect.
Operating income for the USPS also dipped 0.9% to $18.6 billion. Parcel volume, which had been ticking up quarter by quarter at the USPS for several years, fell 2.3% to 1.7 million pieces, after dropping 5% in Q2. Operating expenses increased 9.6% to $20.5 billion. Revenue was down 1% to $18.6 billion.