The US Postal Service (USPS) has seen first quarter revenue growth of 1% on a general decline in volumes across the board. It has however managed to significantly tackle its financial losses – down to $1bn from $1.519bn for the same quarter last year.
Volumes declined by 1.7bn pieces compared to the same quarter last year. Among the general drop on volumes, Marketing Mail had a fall of 879m pieces, and First Class Mail volumes were down by 587m pieces. Shipping and Packages saw a volume drop of 70m pieces too.
Revenue at the Postal Service was up significantly as the ongoing Delivering for America strategic plan takes hold. The headline $21.5bn quarterly revenue was helped with a 2.4% growth in Shipping and Packages revenue to $203m, and First Class Mail saw a $95m increase in revenue.
The Marketing Mail segment saw a 2.4% decline in revenue as, according to the Postal Service, more and more of its clients looked to digital marketing instead of direct mail. Marketing Mail remains one of its strongest segments. The Postal Service stated, “its value to U.S. businesses remains strong due to customer returns on investment and better data and technology integration.”
Speaking of the revenue growth, Postmaster General Louis DeJoy said, “We continue to focus on service reliability for the American public as we modernise our outmoded and ageing postal network to move mail and packages in an integrated network and deliver to nearly 165m delivery points six days a week.”
The Postal Service has managed to control its losses in the first quarter, with these down significantly year on year. Operating expenses were down $129m in the period.
Compensation and benefits grew by $642m y-o-y, a jump of 4.8% due to inflation related labour agreements. On top of this, transportation expenses grew by $321m (5.8%) in the period due to inflationary pressures on fuel and increased rent expenses.
Chief Financial Officer Joseph Corbett said of the financial pressures facing the Postal Service, “We continue to manage costs within our control by focusing on maximising labour productivity and optimising our network. However, we also need Civil Service Retirement System reform to achieve financial predictability and sustainability.”
The Civil Service Retirement System (CSRS) is one of the cost pressures that the Postal Service says is beyond its control. This, the Federal Employee Retirement System (FERS) and workers compensation expenses saw increases in expenses in the region of $1.1bn . Where the strategic plan, Delivering for America, is set to drive the Postal Service toward break even, its leadership say that the CSRS needs urgent reform in order to achieve their goals.
Source: Transport Intelligence
