Postal Service Reports $1.6 Billion Net Loss in Q3

For the third quarter, the Postal Service suffered a $1.6 billion net loss on $16.6 billion operating revenue.

Following on last quarter’s $2 billion loss, the Postal Service reported a $1.6 billion net loss on $16.6 billion operating revenue for the third quarter. The $1.6 billion net loss was an increase of $981 million compared to the same period last year.

The losses are the result of a decline in first class mail revenue as well as a much higher “controllable loss” over the same period last year. This year’s loss was $552 million versus $197 million last year.

The Postal Service defines a “controllable loss” as “a non-GAAP [Generally Accepted Accounting Principles] financial measure defined as net income (loss) adjusted for items outside of management’s control and non-recurring items. These adjustments include the mandated prefunding of retirement health benefits, actuarial revaluation of retirement liabilities, non-cash workers’ compensation adjustments and the change in accounting estimate.”

The Postal Service also said that operating expenses were higher this year than last year. Labor costs increased by $387 million, largely due to the increase in Shipping and Packages volume, and transportation costs increased by $97 million.

If there’s any good news to be had in the financial results, it’s that the Shipping and Packages business grew by 18% ($645 million). The Postal Service also actually reported a profit in the first quarter of this fiscal year despite the extreme losses in the most recent two quarters.

In a statement on the financial figures, Chief Financial Officer and Executive Vice President Joseph Corbett said, “Although the Postal Service achieved strong results in package delivery and Standard Mail volumes, only a slight increase in total revenue was recorded due to a mandated price reduction earlier this year. We incurred a net loss resulting, in part, from continued decreases in First-Class Mail volume and systemic financial imbalances associated with our retiree health benefit prefunding requirements.”

About the Author

Ian Smith is one of the co-founders of He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.