Postal Updates
USPS records losses for third quarter of 2023
By Allen Abel
The United States Postal Service’s losses accelerated in the third quarter of the 2023 fiscal year compared to the April-June period of the previous year, even as the USPS began, in the words of Postmaster General Louis DeJoy, “to help capture some of the fruits” of initiatives in his Delivering for America plan.
The posted loss for the third quarter was $1.7 billion, compared to a reported profit in the spring of 2022 of $59.7 billion, with almost all of the latter windfall attributable to the ripe bounty of the Postal Service Reform Act of 2022.
But when legislative beneficence is removed from the calculation, the USPS suffered an adjusted loss of $860 million in the third quarter, nearly double the $459 million shortfall during the same period a year earlier.
Mail volume continued its decline. For the first nine months of fiscal 2023 (Oct. 1, 2022, to June 30, 2023), first-class single-piece mail dropped by 7.6 percent, and marketing mail fell even more dramatically, by 10.3 percent.
The USPS noted that excluding political/election mail from last November’s midterm elections the decrease for marketing mail during the first nine months would have been 12 percent.
Shipping and packages declined by 3.7 percent compared to the third quarter of fiscal 2022.
Total revenue for the third quarter was $18.6 billion, a drop of 0.9 percent from the same period last year. The 5.4 percent increase in first-class postage, from 63¢ to 66¢, that took effect on July 9 came too late to be reflected on the third-quarter spreadsheet.
Speaking at the quarterly meeting of the Postal Service’s board of governors in Washington, D.C., on Aug. 8, board chair Roman Martinez IV cast inflation as the lurking villain in the Postal Service’s most recent underperformance, citing “costs that were not foreseen when the [Delivering For America plan] was implemented.”
Martinez told the board that the planned opening of 60 new sorting and delivery centers will allow the USPS to close 3,000 of the 19,000 facilities where mail and packages are routed.
“While the carriers will no longer be using those 3,000 facilities, most will retain the retail operations to preserve access to the networks,” Martinez said.
However, DeJoy said the shift could be accomplished “without closing any local post office retail operations.”
“This undertaking is massive and long overdue, and time is of the essence if we wish to enjoy the benefits of this cherished institution for years to come,” DeJoy told the board.
Joseph Corbett, the Postal Service’s chief financial officer, admitted that the Postal Service is “still in a long-term hole” and that to fulfill the postmaster general’s initiatives, “we need to generate a lot more cash in the future.”
“We continue to manage the costs within our control,” Corbett said in his prepared formal statement, “such as by reducing work hours by six million hours compared to the same quarter last year and by focusing on transportation and other costs.”
DeJoy reported that the Postal Service had saved a billion dollars by transferring the transportation of thousands of tons of mailpieces from airplanes to trucks.
“However,” DeJoy said, “these efforts have been overcome by a universal curtailment of advertising expenditures [and] significant inflation costs ... These conditions have added an estimated 6 billion dollars of unplanned cost in 2023 alone and will be in our operating cost base well into the future.”
A quarterly service performance report submitted by Joshua Colin, chief retail and delivery officer and executive vice president for the USPS, revealed a marginal backslide in first-class mail delivery, with 92.57 percent of mailpieces being delivered within the Postal Service’s self-imposed standards, compared to 93.29 percent in the third quarter of 2022.
Overnight first-class mail and two-day first-class mail also underperformed compared to the third quarter of 2022, but marketing mail fared better, with a 95.75 percent on-time delivery rate compared to 94.61 percent during the same period last year.
Essentially, the third-quarter report showed that the Postal Service, squeezed by inflation, was charging higher prices to deliver fewer pieces of first-class mail slightly more slowly.
A total of 114 labor union and organizational representatives, current and retired postal employees, and disgruntled mail users signed up to take part in the public-comment phase of the Aug. 8 board of governors meeting.
More than half of the registrants failed to show up, either in person or online, when their names were called. Those who did were allotted precisely 25 seconds to make their pleas, to which the governors, as is their custom, made no reply.
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