USPS posts dismal third quarter financial results

Washington Postal Scene by Bill McAllister

The three new members of the United States Postal Service board of governors failed to show up for the board’s Aug. 9 meeting in Washington, D.C., but the problems facing the nation’s mail service were on full display.

What the three missed were details of yet another dismal financial quarter for the U.S. Postal Service and a hint of troubles ahead for the parcel business, which has become a USPS mainstay in an era of sharply declining first-class mail.

Members of the Postal Service’s temporary executive committee, holding what they hope will be the committee’s final meeting, announced the USPS will not be issuing its long-awaited 10-year recovery plan until the new governors get a chance to review the proposal.

Key members of Congress have told the Postal Service that lawmakers will not act on its request for more financial help until they see the plan for resolving the agency’s financial problems.

The confirmation of the three new appointments — Ron Bloom of New York, Roman Martinez IV of Florida and John McLeod Barger of California — was probably the best news postal officials shared during their 50-minute public session.

A postal official said none of the new members had been sworn into office, but they would probably attend the board’s next public meeting this fall.

Financial results revealed that steps taken by some large mailers, such as Amazon, are beginning to have an impact on the agency’s booming parcel business.

Amazon, the online retail giant, and others have said they will begin to curtail their use of USPS delivery services. These decisions were behind a decline in parcel select package volume, the first such drop in that USPS parcel category in nine years, officials said.

Overall parcel volume fell by 47 million pieces, or 3.2 percent, compared to the third quarter of 2018.

Growing its parcel business has helped the Postal Service combat a sharp decline in letter mail, long the agency’s financial anchor.

Postmaster General Megan Brennan and Chief Financial Officer Joseph Corbett told analysts after the committee meeting that the USPS has a strategy for dealing with a decline in parcels from some mailers.

“The Postal Service is certainly well positioned” to deal with what Brennan described as the “aggressive” actions of some large mailers. She noted that some competitors are promising more Sunday parcel deliveries.

The USPS is a “pioneer and market leader” in Sunday deliveries, Brennan added, saying she wants to expand that part of the parcel business.

While she didn’t disclose details of the 10-year recovery plan, she did say that the USPS would insist that the Postal Regulatory Commission abolish a price cap that limits postal rate increases to no more than the annual rate of inflation.

Financial figures that Brennan released show that in the third quarter ended June 30, revenues were $17.1 billion, essentially flat from the levels of the previous year.

For the third quarter of 2019, the USPS showed a net loss of almost $2.3 billion, compared to a loss of $1.5 billion in the previous year.

Those results gave the agency a net loss of nearly $5.9 billion in the first three quarters of the year, compared to an almost $3.4 billion loss a year earlier.

Revenues for the nine months totaled $54.3 billion, up from $53.7 billion in 2018.

Brennan and Corbett said the Postal Service had shown a noteworthy ability to cuts costs this year in the face of declines in first-class and marketing mail.

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