The Postal Service reported a net loss of $4.5 billion in the second quarter of fiscal year 2020 as the agency said that the negative effects of the COVID-19 coronavirus pandemic began to show up in the latest financial numbers.
This net loss was $2.4 billion higher than the same time period last year.
“The COVID-19 pandemic, which has severely affected the U.S. economy, began to negatively affect the Postal Service during late March with declining mail volume, and the impact has continued to worsen since then. It is estimated that the COVID-19 pandemic will substantially increase the Postal Service’s net operating loss over the next eighteen months, threatening the Postal Service’s ability to operate,” read the press release from the Postal Service on the latest financial results.
On the upside, the Postal Service reported total revenue of $17.8 billion, an increase of $348 million compared to the same time period last year.
The 2020 census helped prop up revenue from First Class mail. First-Class Mail revenue increased by $89 million, or 1.4 percent, despite a volume decline of 29 million pieces, or 0.2 percent. The Postal Service said this growth was due to one-time mailings associated with the census; absent that, First-Class Mail revenue and volume would have each declined.
Shipping and Packages revenue increased by $386 million, or 7.1 percent compared to the same time period last year. The Postal Service said the circumstances surrounding the coronavirus will likely cause revenue for Shipping and Packages to continue increasing in the near future as more people shop online.
The Postal Service said its overall finances are likely to get worse in the near term, however, as the economic impact from the coronavirus sets in.
“Although the pandemic did not have significant impact on our financial condition in our second quarter, we anticipate that our business will suffer potentially dire consequences for the remainder of the year,” said Postmaster General and CEO Megan J. Brennan.
She added that mail volumes are starting to drop sharply as a result of the coronavirus and reiterated calls for a bailout from Congress.
Time for a Bailout?
The Postal Service said recently that it needs $75 billion from Congress to survive in the near term as the economic downturn from the coronavirus has further deteriorated its already ailing financial situation.
As plans for yet another coronavirus stimulus bill start to unfold, lawmakers in both the House and the Senate have been ramping up their calls for Congress to inject the Postal Service will billions to keep it afloat.
It is unknown if Congress will ultimately follow through with providing money to the Postal Service in a future spending bill. Even if Congress approves a bailout for the agency, past reports have suggested that President Trump might veto such a bill.