The money hemorrhaging problems at the Postal Service continued in the second quarter with the latest financial report showing that the USPS recorded a net loss of $1.5 billion. The loss is lower, however, than the $1.9 billion loss from the same quarter last year.
The Postal Service attributes most of the losses to a retiree health benefit prefunding expense noting that the loss would only have been $44 million for the quarter without the retiree benefit expense.
On the plus side, operating revenue increased by 1.3% ($223 million) over the same period last year, driven by a 14.4% growth in shipping and package volume.
What the Postal Service calls “controllable income” went up in Q2. It came in at $313 million, an increase of $52 million over the same period last year. It defines “controllable income” as “net income excluding retiree health benefits prefunding expense and expenses for interest rate and other non-cash workers’ compensation expenses.” The Postal Service attributes this increase to efforts associated with continued cost-cutting initiatives and enhanced revenue from strong shipping and package volume.
First-Class Mail and Standard Mail volumes declined 2.1% and 1.1%, respectively, during the second quarter compared to the same period last year.
“Shipping and Package Services are a key business driver, however, operating margins in this business are lower than in mailing services,” said Chief Financial Officer and Executive Vice President Joseph Corbett. “And, while we’re pleased to see a small increase in controllable income, to improve our margins, we’ll need to make investments in our network infrastructure and delivery vehicles.”
Other highlights from the financial report include the following:
- Total mail volume of 37.7 billion pieces declined by 420 million pieces from 38.2 billion pieces for the same period last year.
- Shipping and Package volume increased 14.4 percent.
- Operating revenue of $16.9 billion increased by $223 million or 1.3 percent.
- Operating expenses of $18.4 billion decreased by $160 million or 0.9 percent.