USPS posts profit in 2022, warns big losses are coming
By Bill McAllister, Washington Correspondent
The United States Postal Service has posted what it calls a “one time, non-cash” net profit of $56 billion in fiscal year 2022, but warned it will return to red ink for the current fiscal year that began Oct. 1 with a projected loss of $4.5 billion.
As the USPS has previously stated, its financial health for the fiscal year ended Sept. 30 was saved by congressional legislation that freed the Postal Service from paying some of its debts.
But as officials made clear at the Postal Service’s Nov. 10 board of governors meeting, the USPS will return to deep deficits this year despite its plan to raise postage rates twice a year.
Postmaster General Louis DeJoy conceded that this year’s projected loss was a disappointment. It was not “the breakeven results we were striving for,” he told the governors.
Volumes dropped for most mail categories in fiscal year 2022, but revenues for all types of mail increased thanks to higher postage costs, the board of governors were told by Joseph Corbett, the Postal Service’s chief financial officer.
The bottom line showed a $56 billion net profit, compared to a $4.9 billion loss in fiscal year 2021.
Postal revenues grew to $78.8 billion from $77.1 billion in fiscal year 2021.
The impact of the congressional support was so dramatic that the USPS also reported what would have happened to its finances had lawmakers not passed the legislation.
Specifically, the USPS said it would have recorded a $473 million loss in fiscal 2022, compared to a $1.5 billion profit in fiscal year 2021.
The volume numbers for fiscal year 2022 showed how the mail changed during the year.
First-class volume fell by 3.4 percent, but revenue grew by 3.3 percent, Corbett said.
Package volume, which had grown rapidly during the COVID-19 pandemic, fell by 5.3 percent, and revenue dropped by 2.2 percent.
Corbett said that reflected more people returning to their previous shopping habits and reducing their dependence on goods delivered by mail.
The Postal Service’s plan for the current year projects first-class mail volume will drop 5.1 percent, and marketing mail volume, another major mailing segment, will fall by 5.2 percent.
Still, the USPS expects its overall revenues will increase to $81.2 billion in fiscal year 2023.
The Postal Service also indicated it will seek a cut in its payments to the federal civil service retirement fund. If the cut is approved, it would reduce the projected loss to $1.4 billion this year.
In a news release, DeJoy said the results show the USPS is “making solid and steady progress — despite administrative, operational and inflationary headwinds — toward our goals of financial break-even on an annual basis and sustainability on a long-term basis”
“While we are not where we want to be and still have far to go, the execution of our Delivering for America plan is producing greater operational efficiencies, improving service performance, generating more revenue, and enabling long-deferred investments to modernize our technology and operations infrastructure,” he said.
DeJoy said the USPS plans to strengthen spending on capital improvements this year, spending $7.4 billion.
“Together, our leadership team and all our employees know we need to remain laser focused and drive hard to implement operational changes, capture the available efficiency gains and grow our revenues,” DeJoy said.
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