President-elect Biden promises to increase funding for the USPS, despite losing nearly $ 9 billion last year. Grady Trimble from FOX Business with more.
The US Postal Service reported positive financial results for the first fiscal quarter of 2021 for the first time in several years, although it warned that these encouraging results may not be sustainable.
Total quarterly revenue increased $ 2.1 billion – or 11.1% – compared to the same period last year, to $ 21.5 billion. The courier reported net revenue of $ 318 million.
There was an observation, however, that the loss for the quarter would have been $ 650 million, excluding adjustments that were made to compensate non-cash workers and a temporary peak surcharge.
The results were partially driven by a pandemic-related increase in the volume of vacation packages – which grew a record 25% with revenue of $ 2.1 billion as more people opted for e-commerce options. Overall, the Post Office said 1.1 billion packages were delivered during the holiday season.
In the quarter as a whole, sales in the shipping and packaging segment increased by 42%, or US $ 2.8 billion, in a volume increase of 435 million pieces.
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The Postal Service expects its high volume of packages to decrease somewhat when the US economy reopens.
“Our strong growth in package volume during the holiday quarter shows how drastically our business and revenue mix is changing,” said Postmaster General and CEO Louis DeJoy in a statement. “While our positive financial results this quarter are certainly welcome, we continue to face systemic imbalances that make our current operating model unsustainable, and the economic impacts of the COVID-19 pandemic will continue to challenge the organization.”
While the volume of packages grew, sales of courier services – the largest category of sales in the Postal Service – decreased. Revenue from marketing mail fell 5.6% year-on-year and revenue from first-class mail fell 2.7%.
Total postal operating expenses continued to skyrocket. Associated costs increased $ 1.1 billion in the first quarter to $ 21.1 billion, an increase of 5.3% compared to the same period last year.
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The Post also noted that they delivered a record number of ballots in the mail during the 2020 presidential election, 99.89% of which were delivered to election officials within the issued guidelines – the average delivery time was 1.6 days.
Also on Tuesday, the USPS announced that Ron Bloom – a former Obama administration official – would serve as chairman of the US Postal Council of Governors.
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