USPS halves first quarter losses

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The US Postal Service (USPS) has cut losses from US$1.5bn to US$748m in the first fiscal quarter of 2020 despite continuing challenges due to its restrictive business model and mandated costs.

Revenue for the period October 1, 2019-December 31, 2019, decreased 1.8% to US$19.4bn.

First-class mail revenue declined 2.5% to US$6.4bn with volumes decreasing by 3.8% to 14.3 billion.

Marketing mail revenue was down 5.4% to US$4.4bn and pieces by 7.9% to 20.3 billion due to the high levels of political and election mail in October and November 2018.

Shipping and packages revenue was up 2.3% to US$6.6bn despite volumes falling by 4.6% to 1.7 billion pieces.

Postmaster general and CEO Megan Brennan said, “We demonstrated once again the power of our unrivaled network and our ability to provide solutions for our customers while growing package volumes during our peak period. Package revenue for the quarter grew by US$146m. However, overall volumes and mail revenues for the quarter were down, and we continue to face systemic profitability challenges due to our restrictive business model and mandated costs.”

Total work hours declined, compensation and benefits expenses were down by US$190m, and total expenses by US$1.1bn to US$20bn.

Chief financial officer and executive vice president Joseph Corbett said, “While many of our network costs are fixed to meet our universal service obligations, we continue to aggressively manage operating expenditures under management’s control. The Postal Service reduced work hours by 6.4 million relative to the same quarter last year, helping us to reduce overall compensation expenses.”

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