The Postal Service reported a net loss of $4.9 billion in fiscal year 2021 in its latest financial results.
Believe it or not, this is an improvement over 2020 when it reported a total net loss of $9.2 billion.
The financial losses were likely bigger than that as a practical matter. In its financial report, the USPS noted it suffered a $6.9 billion “adjusted loss” which “excludes non-cash workers’ compensation adjustments for the impacts of actuarial revaluation and discount rate changes.” It was also quick to note that these factors are out of its control. Taking this into account, the net loss is $4.9 billion for the year.
On the plus side, net operating revenue increased 5.3% over last year, growing to $77.0 billion, $3.9 billion more than FY 2020.
Shipping and Packages revenue increased $3.5 billion (12.2%) over FY 2020 on volume growth of 253 million pieces, largely driven by the surge in e-commerce resulting from the pandemic and record holiday volume. The Postal Service noted that the growth in this area from the pandemic is starting to slow down, however, but remains higher than it was prior to the pandemic.
Marketing Mail revenue increased $681 million (4.9%) over the prior year, rebounding from its sharp declines during the pandemic.
First-Class Mail revenue declined by $500 million (2.1%) over the prior year due to a volume decline of 1.9 billion pieces (3.7%). The Postal Service noted that it is continuing to lose ground in this area because of electronic communication supplanting the use of paper mail.
Compensation and benefits expenses increased $1.4 billion (2.8%) over 2020, primarily due to contractual wage increases and additional work hours associated with the higher packages volume.
“We have continued to serve the American people, adapting to efficiently manage the significant growth in package volume, especially during our peak season,” said Chief Financial Officer Joseph Corbett. “Despite the annual loss, we are making progress on key initiatives in the Delivering for America plan, which will allow us to generate enough revenue to cover operating costs and invest in the business while providing our customers and the country with the reliable service they expect and deserve.”
Postmaster General and CEO Louis DeJoy said, “We are aggressively implementing our Delivering for America transformation plan and making solid progress in service and operational performance, and in enterprise-wide automation investments that have dramatically expanded our capacity to process and deliver holiday package volume for the nation. Despite the magnitude of our financial challenges, we are making encouraging progress in correcting the long-term imbalance in postal revenues and expenses, and we expect to see continued improvement as we fully implement the Delivering for America plan, which includes making meaningful progress towards meeting or exceeding 95 percent on-time service performance for all mail and shipping products, which we will achieve once all the elements of the plan are implemented.”