The U.S. Postal Service reported a revenue gain for the year but an income loss, while parcel volume continued to drop relative to the 2021 pandemic surge, as the USPS like other shippers has experienced a slowdown in ecommerce-related business due to challenging economic conditions.
The USPS reported an adjusted net loss of $473 million, compared to adjusted net income of $1.5 billion last year. The actual GAAP figure was a $56 billion gain this year, vs. a $4.9 billion loss last year, mostly due to the one-time cash effect of the Postal Service Reform Act.
For the adjusted figure, also called controllable, the USPS backed out past-due retiree healthcare benefits under the PSRA and workers’ compensation payments, adding back amortized gains from unfunded liabilities.
Operating revenue was $78.5 billion for the year, up $1.5 billion or 1.9% from 2021, despite a drop in total volume of 1.6 billion pieces or 1.2%, as the effect of upward pricing adjustments kicked in.
Postmaster General and CEO Louis DeJoy said the USPS is making “solid and steady progress” toward its long-term goal of break-even results “despite administrative, operational and inflationary headwinds.”
“While we are not where we want to be and still have far to go, the execution of our Delivering for America plan is producing greater operational efficiencies, improving service performance, generating more revenue and enabling long-deferred investments to modernize our technology and operations infrastructure,” DeJoy said in a release.
Shipping and package revenue was down $700 million or 2.2%, on volume that declined by 399 million pieces or 5.3% from last year.
“Higher package volumes in the prior year were due to the pandemic-related surge in ecommerce, which continues to abate as the economy recovers and market competition intensifies, although such volumes are still higher than pre-pandemic levels,” the USPS said in the release.
In remarks to the USPS Board of Governors, DeJoy provided color on his “much to be done” theme, including the fact that carriers still drive 30-year-old vehicles, plants and post offices need upgrades to bring them in line with the 10-year plan, and technology needs to be given a 21st century upgrade.
The “remove DeJoy” clamor seems to have died down for now, although that may change when a new Congress is in session next year.
“This leadership team is committed to moving as fast as possible to accomplish the major changes necessary to improve this condition and the financial trajectory,” he said. “While we are committed to our public service mission, we must move at the speed of private industry, if not faster, to effect this transformation before we again begin to drain our cash position.”
DeJoy and the USPS are still trying to work out the mix of diesel and electric-powered vehicles in a yet-to-be-deployed new fleet. The agency said it plans to more than double an earlier figure of EVs up to 25,000, half of its initial order, after pressure was applied by Congress, environmental groups and lawsuits from attorneys general over the diesel plan. Congress awarded the USPS $3 billion in August for the purchase of EVs and charging stations.
The USPS is looking to replace its current fleet of 163,000 Grumman delivery vehicles, which was deployed between 1987 and 2001. The “long-life” vehicles were designed to last about 25 years
In other business, the Board of Governors unanimously re-elected Roman Martinez IV as chairman, and Anton G. Hajjar as vice chairman.
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