USPS Net Loss More Than Doubles for 2019, Package Volume Up Slightly

The U.S. Postal Service saw a slight increase in package volume for fiscal 2019, after its first quarterly decline in years during Q3, as the agency is being challenged by Amazon and FedEx rerouting packages to their own networks.

Total mail and package volume declined by 3.8 billion pieces or 2.6%. While package volume alone was up just 0.3% or 16 million pieces to 6.2 billion, shipping revenue increased 6.2% to $22.8 billion, helped by price increases. Volume had been growing at double-digit rates for the past few years, a bright spot as mail volumes continued to plummet.

Overall, the USPS reported an annual net loss of $8.8 billion, more than double the $3.9 billion loss in fiscal 2018. This was driven by a $5.4 billion increase in operating expenses to $79.9 billion, $3.5 billion of which came from an increase in workers compensation expenses; a $994 million increase in compensation and benefits expenses; a $320 million increase in retirement benefits expenses; and a $323 million increase in transportation expenses.

The USPS’s controllable operating loss, outside of mandates, was $3.4 billion, up $1.5 billion from 2018.

“We continue to adjust to declining mail volume and remain focused on leveraging our unique and unrivaled network to gain new customers and grow profitable revenue in the increasingly competitive package business,” said outgoing Postmaster General and CEO Megan J. Brennan. “However, revenue growth in our package business will never be enough to offset imbalances in the Postal Service’s business model, which must be addressed through legislative and regulatory reforms in order to secure a sustainable future.”

Brennan was referring to the mandated prefunding of retiree health benefits, a legacy of the 2006 Postal Reform Act which has been an albatross on the USPS ledger ever since. The agency added $7.3 billion in debt in fiscal 2019 related to the retiree pension fund and prefunding of health benefits.