The losses continue to mount for the Postal Service (USPS). The agency reported a net loss of $1.7 billion on total revenue of $18.6 billion for the third quarter of fiscal year 2023. Total revenue was $168 million lower (0.9%) compared to the same quarter last year.
USPS reported net income of $59.7 billion for the same quarter last year, however, that was due to a one-time cash infusion from the Postal Service Reform Act.
The agency blames the losses at least in part on costs for retirement benefits and workers’ compensation for its employees. A statement in its report reads:
Results under GAAP [generally accepted accounting principles] include retiree benefits expense for the amortization of underfunded Civil Service Retirement System (CSRS) and Federal Employee Retirement System (FERS) plans, and workers’ compensation expenses caused by actuarial revaluation and discount rate changes, as well as the impact of the PSRA for the same quarter last year. The Postal Service reports its adjusted results excluding these costs.
USPS also reported significant losses in the previous two quarters of FY 2023. It had a net loss of $2.5 billion in the second quarter and a net loss of $1 billion in the first quarter.
“Continued rising costs in several areas of our business pose a challenge.” said Chief Financial Officer Joseph Corbett. “We continue to manage the costs within our control, such as by reducing work hours by 6 million hours compared to the same quarter last year and by focusing on transportation and other operating costs.”
Revenue from First-Class Mail was 4% higher on a $221 million increase, although volume was lower by 5.9% compared to the same quarter last year. Shipping and Packages revenue was relatively flat and volume declined by 2.4%.
Marketing Mail revenue fell by $333 million (8.8%) over the previous year. USPS said that the declines in Marketing Mail were driven by lower ad spending, high inflation driving up print media production costs, and lower political/election mail revenue and volume.
Total operating expenses for the quarter were $20.5 billion total and 9.6% higher ($1.8 billion) compared to the same quarter last year.
