USPS Q2 results see revenue and volume decline
The USPS Q2 results saw revenue and volume decline, measured from the 1st of January 2019 and until 31st of March 2019. USPS attribute the slump in figures due to the continued challenge from merchants choosing electronic alternatives over mail and an inability to price their products and streamline their legacy costs because of legislative and regulatory reforms in the US.
The US Postal Service reported total revenue of $17.5 billion for the second quarter of fiscal 2019. That’s down by $8 million, compared to last year.
First-class mail revenue declined by $217 million, or 3.3%, on a volume decline of 576 million pieces, or 3.9%, on the year-on-year (YoY) basis. Marketing mail revenue declined by $155 million, or 3.9%, on a volume decline of 959 million pieces, or 5.2%, on the YoY rate. Meanwhile, shipping and packages revenue increased by $253 million, or 4.9%, on volume growth of 5 million pieces, or 0.3% on the YoY rate.
The net loss for the quarter totalled nearly $2.1 billion. That’s up by $747 million, compared to a net loss of $1.3 billion for the same quarter last year. However, the controllable loss for the quarter was $806 million, compared to a controllable loss of $656 million for the same quarter last year.
“We continue to face challenges from the ongoing migration of mail to electronic alternatives, and we are legally limited under current law in how we can price our products and streamline our legacy costs. Within the framework of our current business model, we are executing to grow revenue and reduce operating expenses.”
– Joseph Corbett, chief financial officer and executive vice president, USPS
The decline in USPS’ services volume means that merchants are increasingly choosing other last mile suppliers over USPS. This explains why Stamps.com have diverted from USPS, leaving their share price now only worth 20% of the previous value. Stamps.com now say that USPS are renegotiating with around 125 resellers who are also likely to see lower commissions in the future. Stamps.com of course on walking away lost all their commissions and say that they are focusing on other carrier arrangements.