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U.S. Postal Service reports $4.9 billion 2021 net loss -Breaking

by Mike Robinson

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© Reuters. FILEPHOTO: Workers of the United States Postal Service (USPS), load mail into trucks in front of a Royal Oak, Michigan post office on August 22, 2020. REUTERS/Rebecca Cook/File Photo

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By David Shepardson

WASHINGTON (Reuters] – Wednesday’s report by the United States Postal Service (USPS), showed a net loss ($4.9 billion) for the September 30th year, reducing its losses over previous years.

USPS had an operating revenue of $77 Billion for its 2021 budget year. This was an increase in $3.9 billion (or 5.3%). The 2020 net loss was $9.2B.

Louis DeJoy announced in March that the plan was to reduce $160 billion in losses for the next ten years. DeJoy announced Wednesday, “We still have years worth of unrepaired damage that we must fix.”

The surge in ecommerce due to record holiday volumes led the USPS to report that shipping and package revenue rose by 12.2% in 2021.

First-class mail volumes fell to 50.7 billion pieces in 2021, the lowest number since 1971 https://about.usps.com/who-we-are/postal-history/first-class-mail-since-1926.htm, and is down 51% since 2001.

USPS has had a poor year in delivery performance, with USPS facing significant staffing and package issues as a result of COVID-19. However, DeJoy stated that the agency is ready for the busy holidays season. He said, “We’re ready.”

As part of its efforts to decrease red ink, USPS introduced new service standards last month that will slow down some first-class mail delivery.

These new service standards changed the one-to-three-day standard to one-to-five days. This will affect about 40% of first class mail.

Late August saw the USPS raise prices on first-class stamps up to 58 cents, from 55 cents.

USPS has suffered net losses close to $100 billion in the past seven years. This is due in part to 2006 legislation that mandated that USPS pre-fund over $120 billion for retiree healthcare and other pension liabilities. Labor unions consider this an unfair burden that should not be shared with other businesses.

Congress will be considering legislation to give USPS $46 billion of financial relief in the next 10 years. This includes eliminating the 75-year requirement for USPS to pre-fund retirement health benefits.

Separately, Congress may award $6 billion to the USPS for electric delivery vehicles and infrastructure.

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