For the fiscal year ended September 30, 2016, the United States Postal Service (USPS) reported a net loss of $5.6bn due largely to mandated retiree health benefits expenses. Excluding this “prefunding obligation”, net income would have been around $200m.
Overall revenues grew by 2.3% to $70.4bn in 2016, excluding a $1.1bn impact due to accounting method changes. Revenue growth was achieved despite the April 2016 expiration of the “exigent surcharge” mandated by the Postal Regulatory Commission. As a result, the USPS asserts that revenue for 2016 was lower by approximately $1bn than it otherwise would have been. Furthermore, going forward without the surcharge, the USPS expects its revenue to decline from what it otherwise would be by almost $2bn per year.
Parcel volumes driven by the trend towards e-commerce continue to be a boon for the USPS. The Shipping and Packages division had volume and revenue growth of 13.8% and 15.8% respectively. These gains were offset by a decline in First-Class Mail revenue of $925m, or 3.3%, due largely to the exigent surcharge expiration and continuing electronic migration. Together with steady standard mail and advertising mail revenues in addition to a slight increase in other revenues, the USPS achieved revenue growth of $1.6bn.
“The Postal Service continues to win e-commerce customers and grow our package delivery business. We deliver more e-commerce packages to the home than any other shipper because of our predictable service, enhanced visibility and competitive pricing,” said Postmaster General and CEO Megan J. Brennan.
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Source: United States Postal Service