The US Postal Service (USPS) has reported operating revenues of US$17.7bn for the second quarter (January to March) of the 2016 fiscal year, an increase of US$788m or 4.7% over the same period last year. The increase has been attributed to an 11.4% rise in shipping and package volumes as well as pricing strategies.
Megan J Brennan, CEO and Postmaster General of USPS, said, “While we have been successful in achieving controllable income during the quarter, we are still reporting net losses and contending with long-term financial challenges. We continue to focus on improving operating efficiencies, speeding the pace of innovation, and increasing revenues for the postal service.”
The net loss for the quarter was US$2bn compared with US$1.5bn for the same period last year, which was impacted by a US$547m unfavorable change in the workers’ compensation expense as a result of interest rate changes a factor outside of management’s control.
Operating expenses also increased in the second quarter compared with the same period last year, driven by increased work hours and transportation expenses due in large part to the increase in package volume. Labor costs also increased by US$362m, and transportation expense increased by approximately US$149m.
Joseph Corbett, chief financial officer and executive vice president, said, “During the second quarter, we expanded work hours and our transportation network, taking more trips and increasing miles flown. This largely resulted from strategic business decisions enacted to accommodate package growth and enhance service across the country.”
Brennan added, “I am grateful to our dedicated employees who helped us to achieve controllable income this quarter, but we cannot let this result mask the financial challenges we face. Our financial situation is serious, but solvable. We are confident that we can return to financial stability through the enactment of prudent legislative reform and a favorable resolution of the upcoming regulatory review of our rate-setting system.”
May 11, 2016