USPS sees some signs of a turnaround while losing $2B during recent busy season
The overall loss doubled in the first quarter of fiscal 2024, but the Postal Service doubled its profits in the part of its business that officials can control.
The U.S. Postal Service was $2 billion in the red in the first three months of fiscal 2024—typically its busiest and most profitable period of the year—doubling its loss from the same period in the previous year.
The accelerated losses during the holiday season continue a longstanding trend of poor financial performance for the mailing agency, but mark a troubling sign as its leadership team undertakes significant operational transformations with a promise to right the ship.
In a positive development, however, USPS turned a net profit of $472 million when accounting only for the part of the ledger postal management deems within its control. That figure, which does not include fluctuations in workers’ compensation and amortized payments toward employee retirement accounts, grew from $187 million in the first quarter of the prior year.
Postal operating revenues grew by 0.5%, climbing slightly as Postmaster General Louis DeJoy continued implementing his aggressive price increases. USPS grew its revenue by $200 million in the first quarter of fiscal 2023 compared to the same period in the prior year. Expenses increased by 5% in the most recent quarter despite the Postal Service driving down pay and benefits costs slightly and slashing transportation spending by 16%.
The Postal Service grew its career workforce by 11,500 employees compared to the same period last year, but shrank its pre-career workforce by 13,500. It decreased its total work hours by nearly 3%, largely by reducing overtime.
Package revenues jumped by nearly 3% year over year, with volume growing by 5%. First-Class Mail continued its longstanding volume decline with a 6% dip, though price hikes helped usher in a 3% revenue boost. Marketing mail volume dropped by 14%, though USPS attributed that to inflated usage during the 2022 election season.
"While we have noteworthy accomplishments, we have far to go on our transformation journey,” DeJoy said. “However, our performance during the recent holiday quarter demonstrates that our modernization strategies are putting the Postal Service on an upward trajectory.”
UPSS ended the quarter with about $21 billion in cash on hand, down from $24 billion at this point in fiscal 2023.