The USPS First Quarter Results and PRC Updates

The USPS released their results for the first quarter of 2018 (October 1, 2017 – December 31, 2017),  reporting a total revenue of $19.2 billion, and a reported net loss of $540 million. The first quarter, made up in large part by the holiday season, is the leading quarter of the fiscal year. While package volumes increased by 7%, mail volumes dropped by nearly 5%.

Postmaster General and CEO, Megan J. Brennan, stated, “Although we continue to win customers and grow our package business, these gains are not sufficient to offset continuing declines in our mail business, which is our main source of revenue and contribution. We will continue to do everything within our control to improve operating efficiencies, manage expenses, expand our use of technology and keep mail affordable, but these actions must be combined with regulatory and legislative changes.”

Chief Financial Officer, Joseph Corbett, added, “Continuing mail declines, that totaled 2 billion pieces in this quarter, place additional financial pressure on us, underscoring the need for change.”

Financial security for the USPS is quite vulnerable, and the USPS feels dependent on the Postal Regulatory Commission (PRC) implementing a pricing system which would create revenue for the USPS. The USPS is not providing the highest quality of service to the people to whom they deliver, and they recognize that the Price Index price cap is ineffective and needs revision.

Recently, more than 50 mail industry leaders unified as the American Mail Alliance to “advocate for a common sense approach to setting new postal rates, promoting the long-term health and success of the United States Postal Service (USPS), and opposing the radical postal rate increases proposed by the Postal Regulatory Commission (PRC), the independent regulatory agency tasked with USPS postage rate oversight.”

The American Mail Alliance has joined together in an effort to prevent the PRC from advancing with a proposed plan to increase postage pricing over the next five years. The rates have the potential to surge by an astounding 40 percent.

Stephen Kearney, the Executive Director of Alliance of Nonprofit Mailers states, “Nonprofits don’t just use the Postal Service to communicate with their members, they rely on the Service for their financial survival. The PRC proposal will shift dollars away from nonprofits and others, and totally decimate programs and outreach that so many Americans rely on.”

Linda Thomas Brooks, President of the Association of Magazine Media adds, “Increasing rates will only serve to harm customers, businesses, and USPS itself. The PRC proposal comes at a time when the Postal Service is fighting to retain business. Therefore, the USPS’s remaining customers should be encouraged to stay with USPS, not penalized with higher rates. The PRC has to concentrate on streamlining and modernizing the Postal Service. Throwing mountains of cash at the Postal Service’s problems and hoping that it works is not the solution.”

The American Mail Alliance is standing strong against the The Postal Regulatory Commission to ensure catalogers and other business do not see the proposed rate hike in the near future.

About the Author: Jim Gibbs

Vice President of Sales & Marketing at The Dingley Press. Jim has been with Dingley since 2002 and lives in Maine near our Lisbon, Maine plant location.