FY 2017, USPS First Quarter Insights

The first quarter fiscal year results for the USPS are in, and they show an operating revenue decrease of $155 million, due in large part to the 2016 expiration of the exigent surcharge. Had this exigent surcharged remained in place, the USPS would have seen additional revenue Putting mail in mailboxtotaling $570 million.

The first quarter also saw a loss in First-Class Mail revenue, which correlates with the expiration of the exigent surcharge. Chief Financial Officer and Executive Vice President Joseph Corbett states, “Despite the loss of revenue from the expiration of the exigent surcharge and continued effects of electronic migration on First-Class Mail revenue, we continue to believe there is strength in the postal system, and that there is a path forward for us to return to financial health.”

The current rate at which the USPS is operating continues to be a concern, due to retirement healthcare benefits, which remain unaffordable.

Postmaster General and CEO Megan J. Brennan states, “Our current financial situation is serious, but solvable. With legislation that contains broadly supported provisions to improve our business model, the Postal Service can generate total savings of $26 billion over the next five years.  When combined with a favorable outcome of the recently initiated 10-year pricing system review by the Postal Regulatory Commission and continued aggressive management actions, the Postal Service would return to financial stability.”

The USPS did see a volume increase in direct mail, from 22,075 million in the first quarter of the last fiscal year, to 22,355 million in the first quarter of this year, with a reported revenue of 4,693 million for the quarter.

What will be in store for 2017?

According to Corbett, “…the Postal Service’s return to long-term financial stability is only possible when our continuing actions to improve efficiency, reduce costs and expand our use of technology are combined with our proposed legislative and regulatory reforms that together will enable us to continue to meet our universal service obligations and invest in the future of the Postal Service and the mailing industry as a whole.”

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.