The Postal Service announced a net loss of $2.1 billion in the second quarter of fiscal year 2019, an increase of $747 million over the same quarter last year ($1.3 billion in Q2 2018).
Total revenue was $17.5 billion in the latest quarter which was down by $8 million over the same time period last year.
Revenue for First-Class and marketing mail was down $217 million (3.3%) and $155 million (3.9%), respectively. On the upside, shipping and packages revenue increased by $253 million (4.9%) on volume growth of 5 million pieces.
The Postal Service said it is losing money even when it excludes items from its financial figures which it states are “outside of management’s control.” These items include workers’ compensation expenses caused by actuarial revaluation and discount rate changes, and the amortization of Postal Service Retiree Health Benefits Fund (PSRHBF), Civil Service Retirement System (CSRS) and Federal Employee Retirement System (FERS) unfunded liabilities. Its controllable loss in the latest quarter was $806 million, $150 million higher than in the second quarter of fiscal year 2018.
Postmaster General Megan J. Brennan continued to blame the situation on a lack of action from Congress, calling for new regulation to help the agency’s ailing finances.
“The Postal Service continues to pursue aggressive management actions and to seek legislative and regulatory reforms to address our overall cost structure and enhance revenue-generating opportunities,” said Brennan.
The latest legislative effort to make changes at the Postal Service would eliminate the pre-funding requirement for retiree health benefits. Another bill was also recently reintroduced to let the Postal Service ship alcohol. Numerous past legislative proposals in Congress have ultimately failed to advance.
However, Chief Financial Officer Joseph Corbett said that the digital era is weighing on the Postal Service and contributing to its losses as well, evidenced by the losses in first class and marketing mail.
“We continue to face challenges from the ongoing migration of mail to electronic alternatives, and we are legally limited under current law in how we can price our products and streamline our legacy costs,” said Corbett. “Within the framework of our current business model, we are executing to grow revenue and reduce operating expenses.”