Postal Service reports $3.9 billion in losses for fiscal year 2018
The US Postal Service reported a loss of $3.9 billion for fiscal year 2018, despite growth in its shipping and packaging business.
The Postal Service’s package business made a 10% leap in revenue and saw a 6.8% increase in volume from last fiscal year, according to an agency report released Wednesday.
That growth has offset the declines in first-class and marketing mail, generating a $1 billion increase in total operating revenue, from $69.6 billion to $70.6 billion.
But the Postal Service said it saw a $2.2 billion increase in operating expenses due to increases in compensation and benefits as well as in transportation expenses stemming from higher fuel prices and higher package volume.
The agency continues to struggle under the weight of ongoing pension obligations and will not make a scheduled $6.9 billion in benefits prepayments, the subject of ongoing political debate.
Postmaster General and CEO Megan J. Brennan said in a statement that the “flawed business model imposed by law continues to be the root cause of our financial instability.”
“We are seeking reforms that would allow the organization to reduce costs, grow revenue, compete more effectively, and function with greater flexibility to adapt to the marketplace and to invest in our future,” Brennan said.
The agency is limited in how much of its costs it can pass on to consumers. Last month, the Postal Service requested the biggest price jump on stamps to help address the revenue shortfall.
In April, President Donald Trump ordered a review of the Postal Service’s business model by a task force led by the Treasury Department. He has also lambasted the terms of USPS’s contract to deliver packages for the online shopping company Amazon.