USPS reports $1.3 billion fiscal first quarter loss
The United States Postal Service (USPS) reported earlier today that, for the Fiscal Year (FY) 2022 first quarter, it had an adjusted loss of roughly $1.3 billion, much steeper than the $288 million adjusted loss it saw, for the same quarter last year. And USPS said that on a “generally accepted accounting principles basis, the USPS had a net loss of around $1.5 billion for the quarter, compared to $318 million in net income a year ago.
The organization said that its net loss and adjusted loss gains were due, in part, to inflationary impacts to operating expenses, which included rising prices related to energy and fuel expenses. But on a more positive note, it said that its service levels showed continued improvement throughout the quarter and were strong during the holiday season-driven uptick in volumes.
The Postal Service's operating revenue was approximately $21.3 billion for the quarter, a decrease of $202 million, or 0.9 percent, on volume decline of approximately 1.5 billion pieces, or 4.1 percent, compared to the same quarter last year. Revenue declined at a slower rate than volume due to price increases implemented during calendar year 2021.
And it explained that service performance improvements are largely the result of significant organizational focus on implementing core elements of: the Delivering for America plan, including network infrastructure investments; the installation of new package processing equipment; increased leased space; and enhanced efforts for workforce stabilization, to better meet customers' evolving needs during the 2021 holiday season and beyond.
“We continue to improve on-time service performance, as was demonstrated during the recent holiday period and which is the result of our ongoing transformation, investments, and operating improvements across our processing and transportation network,” said Postmaster General and CEO Louis DeJoy in a statement. “We continue to make structural progress to correct our long-term financial losses, drive greater efficiency, and achieve financial sustainability. In addition to the aggressive steps that management has undertaken, which are already producing positive service results, postal reform legislation is an integral part of the Postal Service’s recovery plan. “We are encouraged that Congress is moving forward with postal reform legislation and strongly support enactment. These reforms will help ensure that the Postal Service can operate in a financially sustainable manner.”
Shipping and Packages revenue decreased $738 million, or 7.9 percent, on a volume decline of 210 million pieces, or 9.7 percent. The measured decline in Shipping and Packages volume is a result of the higher package volumes in the prior year due to the pandemic-related surge in e-commerce, which continues to abate as the economy recovers and market competition intensifies. However, Shipping and Packages volume remains higher than pre-pandemic levels.
USPS said that the pandemic has significantly transformed the mix of mail and packages processed through the Postal Service's network and the Postal Service anticipates that its volumes and mix will not return to pre-pandemic levels. The Postal Service continues to grow its revenue in mail services through optimization of its pricing strategies and effective use of its pricing authority, as outlined in the Delivering for America plan.
