The U.S. Postal Service (USPS) reported a net loss of $6.5 billion in fiscal year 2023 in its latest financial results.
The net loss compares to net income of $56 billion in FY 2022, although this is a little misleading because that income was a result of a one-time non-cash boost from the Postal Service Reform Act. Without the aid of this bill, USPS actually had a $473 million loss in FY 2022.
Total operating revenue in FY 2023 was $78.2 billion, $321 million less than the previous year. Total operating expenses were $85.4 billion, $5.8 billion higher than the previous year, an increase of 7.3%.
Revenue for Shipping and Packages increased by $324 million, 1% higher than the previous year despite a volume decline of 175 million pieces. First-Class Mail revenue grew by $515 million (2.1%) over the previous fiscal year on a volume decline of 3 billion pieces.
USPS has been steadily raising stamp prices because of inflation driving up its operating costs. Stamp prices have gone up twice this year, and another price increase is planned for 2024. Prices are also going up over 5% in 2024 for USPS Ground Advantage, Priority Mail, and Priority Mail Express.
Marketing Mail revenue declined by $920 million (5.8%) over the previous fiscal year on a volume decline of 7.7 billion pieces. USPS said that the decreases were driven by commercial mailers’ increasing use of digital and mobile advertising, an overall decline in advertising spending due to economic pressures, and a higher inflationary environment affecting print media production costs.
“…continued rising costs in several areas of our business pose a challenge,” said Chief Financial Officer Joseph Corbett. “We, however, remain steadfast in our commitment to grow package revenue and manage the costs within our control, such as by reducing work hours by 28 million hours and by taking calculated steps to decrease transportation costs consistent with the tenet of our Delivering for America plan to optimize our networks.”
USPS reported that it was unable to make full amortization payments for its obligations under the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS):
To preserve liquidity and ensure the Postal Service’s ability to fulfill its primary mission is not placed at undue risk, the Postal Service has not made certain annual amortization payments to the Office of Personnel Management (OPM) for CSRS and FERS. During 2023, the Postal Service was unable to make the full payments of $3.0 billion and $2.1 billion towards its CSRS and FERS obligations, respectively. Additionally, administrative reform related to how OPM apportions the cost of the CSRS benefits is still necessary to restore the Postal Service to financial health.
USPS launched USPS Ground Advantage in July, a new shipping method that provides a simple, reliable, and more affordable way to ship packages.
Postmaster General Louis DeJoy said, “We are also addressing near-term financial headwinds relative to inflation as we make strong progress in our long-term cost control and revenue generating strategies, including launching new products like USPS Ground Advantage. The whole organization is highly focused on implementation of the Delivering for America plan and creating a more effective, efficient and competitive Postal Service to serve the nation far into the future.”