The U.S. Postal Service on Friday reported a second-quarter loss of $1.7 billion, compared to loss of $1.9 billion in the same period a year earlier. The results, adjusted to exclude non-cash workers’ compensation, reflect a pandemic-driven surge in package deliveries that was still not enough to offset higher operating costs and a continuing decline in revenue from mail services, the Postal Service said.
Revenues rose to about $18.9 billion, up 6% from the same quarter last year, driven by a year-over-year increase of $2 billion, or 33.6%, for package deliveries as volumes jumped by more than 25%.
“While the Postal Service believes that consumer behavior has evolved during the pandemic as the nation has increasingly relied on the safety and convenience of e-commerce, the Postal Service still expects this surge to partially abate as the economy continues to open,” USPS said in announcing its results.
Postal Service officials said the results — and the continuing trends of declining mail volume and increasing package shipments — reinforced the need to implement the 10-year overhaul rolled out by Postmaster General Louis DeJoy in March. That plan seeks to put the agency on a path to profitability by investing in package delivery operations has drawn sharp criticism because it calls for higher prices, service cuts, slower delivery standards and significant structural changes, including consolidation of mail-processing facilities and the closure of some post offices.
The Postal Service projects that it will lose $160 billion over the next decade without the changes but could break even over the 10-year period and become profitable by 2023 or 2024 if the plan is implemented in its entirety.
DeJoy on Friday told a meeting of the USPS Board of Governors that, despite the criticism, he remains convinced his plan is necessary. “Yes, I do hear the criticism, and we will consider them,” he said. “But what I don’t hear is any viable comprehensive alternative.”
Read more about the U.S. Postal Service’s challenges at The Washington Post.