USPS reports lack lustre results
The US Postal Service (USPS) has reported total revenue of $17.5bn for their most recent quarter of 2018 and that’s up 1.4% on the same period last year. The leader of the business has been vocal about the problems.
Shipping and packages revenue increased by $445m (9.5%) but the crucial and lucrative first class and marketing mails declined and fell by a combined $181m. Parcel volumes were up by 69 million (5.0%) but mail volumes declined by 700m pieces (2.1%). It’s a familiar tale and strongly resembles trends in the UK with Royal Mail.
Despite growth in our package business, our financial results reflect systemic trends in the marketplace and the effects of an inflexible, legislatively mandated business model that limits our ability to generate sufficient revenue and imposes costs upon us that we cannot afford.
– USPS Postmaster General and CEO Megan J Brennan
The President of the USA Donald Trump has been critical of Amazon because he believes that the national postal service is essentially subsidising the ecommerce giant. It’s not clear whether his claims are accurate or supportable but it is doubtless true that state post services struggle because of statutory requirements. It’s true of Royal Mail too: it’s hard to compete when the government also gives an organisation national responsibilities.
In the UK, the universal service is one of the struggles for Royal Mail. That’s where they have to guarantee to deliver to anywhere on our islands for the price of a stamp. There is a similar, but not indenical, promise in the USA from USPS. USPS is mandated by the US constitution. And it is still state-owned, unlike the Royal Mail now.
One problem for national postal services all over the world is the fact they have to serve whole nations and private companies can cherry pick the services they wish to offer.