US Postal Service reports $6.5 billion net loss for 2023 fiscal year
US Postal Service Reports $6.5 Billion Net Loss
By David Shepardson
November 14, 2023 – 8:18 PM UTC
The US Postal Service has reported a staggering $6.5 billion net loss for the 12 months ending September 30. This comes as first-class mail volume hits its lowest point since 1968, with revenue down 0.4% to $78.2 billion.
The Postal Service attributes these results to the impact of inflation on operating expenses. In response, they have been raising stamp prices and implementing a 10-year restructuring plan to eliminate predicted losses of $160 billion over the next decade.
Postmaster General Louis DeJoy remains optimistic, stating that the USPS is making progress in controlling costs and generating revenue. Despite a 6.1% decline in first-class mail volume, revenue increased by $515 million due to higher stamp prices.
The net loss was also influenced by accounting for underfunded retirements caused by actuarial revaluation and discount rate changes. With 640,000 employees, USPS reported a 2.6% increase in employee compensation and benefits costs to $52.8 billion.
Total operating expenses for the year were $85.4 billion, a 7.3% increase. To preserve liquidity, USPS did not make the full $5.1 billion in retirement plan payments due.
In April 2022, President Joe Biden signed legislation providing USPS with $50 billion in financial relief over a decade.
Last month, USPS announced plans to raise the price of first-class stamps to 68 cents from 66 cents, effective January 21.
First-class mail, the highest revenue-generating mail class, accounted for $24.5 billion or 31% of USPS’s 2023 revenue.
Reporting by David ShepardsonEditing by Chris Reese and Aurora Ellis
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How is the Postal Service adapting to the changing landscape and exploring new revenue streams in order to overcome its financial difficulties
US Postal Service reports $6.5 billion net loss
The US Postal Service has announced a significant net loss of $6.5 billion for the 12 months ending on September 30, signaling ongoing struggles for the organization. This comes as first-class mail volume reaches its lowest point since 1968, and revenue experiences a decline of 0.4% to $78.2 billion.
The Postal Service has attributed these sobering results to the impact of inflation on its operating expenses. As a response, the organization has taken measures such as raising stamp prices and implementing a 10-year restructuring plan. The aim of the plan is to eliminate predicted losses of $160 billion over the next decade.
Postmaster General Louis DeJoy has expressed optimism despite the current challenges. He believes that with the implementation of the restructuring plan, the Postal Service can overcome its financial difficulties and regain stability.
The decline in first-class mail volume has been a long-standing issue for the Postal Service. The rise of digital communication has significantly reduced the need for physical mail delivery. The COVID-19 pandemic has further exacerbated this trend as more people shifted to online communication and shopping. The Postal Service has struggled to keep up with these changes and faces considerable competition from private shipping companies.
To adapt to the changing landscape, the Postal Service has been exploring new revenue streams. They have ventured into new areas such as package delivery and expanded their services to include same-day and Sunday delivery in select locations. These efforts aim to capture a larger share of e-commerce, which has experienced rapid growth in recent years.
Increased postal rates have been another strategy implemented by the Postal Service to address its financial challenges. The price of stamps has been gradually rising to reflect the increasing costs of operation. However, it remains to be seen how customers will respond to these rate hikes.
Public opinion on the Postal Service’s financial woes is divided. Some argue for increased government support to ensure the continued existence of this essential service. Others believe that the Postal Service should operate as a self-sustaining entity and focus on finding innovative solutions to its financial troubles.
In conclusion, the US Postal Service’s $6.5 billion net loss highlights the ongoing struggles faced by the organization. With first-class mail volume at its lowest point in decades and revenue declining, the Postal Service’s financial situation remains challenging. However, with the implementation of its restructuring plan and exploration of new revenue streams, there is hope for the organization to overcome its current difficulties and regain financial stability.
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