USPS Reports $586 Million Quarterly Loss, Improvement Since 2014
The U.S. Postal Service (USPS) reported a $586 million loss for its third quarter earnings, a large improvement over its nearly $2 billion loss in the same period of last year.
NBC News reported that USPS recovered from last year's loss largely due to interest rates, which relate to workers' compensation expenses, and a drop in operating expenses outside of USPS' control—dropping $1.6 billion to $389 million this year.
According to USA Today, officials say that USPS needs to increase its focus on finding digital solutions and restructuring its benefits program.
"The combination of growing package revenues and improved productivity gains were not sufficient to offset mail volume declines and inflationary pressure, largely due to contractual increases in operating expenses, including wages, benefits and transportation," said USPS CFO Joseph Corbett in a statement to USA Today. "This underscores the need for a combination of continued sales growth, productivity gains and legislation to ensure the Postal Service can return to financial health and meet its public service obligations."
Since Congress passed the Postal Accountability and Enhancement Act in 2006, USPS has paid 5.4 to $5.7 billion annually for future retiree health benefits.
Increased prices for some mail classes went into effect at the end of May, but it was not enough to offset declining volumes in first-class and standard mail, which dropped 2.6 percent and 2.1 percent, respectively, from the third quarter last year. USA Today reported that the third quarter is traditionally USPS' lowest.
Fredric Rolando, president of the National Association of Letter Carriers, seemed optimistic about the agency's future, citing a $1.2 billion "controllable" income for the first three fiscal quarters.
"2015 is turning into one of the USPS' most impressive annual performances since the Great Recession," he said in a statement to USA Today. "Moreover, this reflects the positive trend in operating profits that began in 2013 and that includes last year's $1.4 billion operating profit."