Holiday season was bright for Postal Service

The U.S. Postal Service saw a spike in revenue during the last three months of 2014, driven by a strong holiday shipping season, the agency said Friday. 

The USPS’s revenues grew by 4.3 percent — some $800 million — compared the same period at the end of 2013, with a dramatic increase of almost 13 percent in the agency’s package delivery business.

Still, the Postal Service also reported a $754 million net loss, due to a required payment of $1.4 billion for future retiree healthcare.

Megan Brennan, who took over as postmaster general this week, said the service would seek to build on the momentum from a string of recent strong financial performances.

“Our employees delivered double-digit growth in packages this holiday season, which shows our growing ability to compete for and win new package delivery customers,” Brennan said in a statement.

“To keep the momentum going—and to ensure we are the shipper of choice for our residential and business customers — we will continue to expand customized delivery solutions and package capacity while delivering high levels of service.”

The latest financial report illustrated the transition that the Postal Service is making, as shipping revenue continues to jump and first-class mail volume declines.

The agency's financial situation has also improved in recent years, despite four defaults on the required healthcare payments. The USPS's losses in 2014 were largely driven by costs beyond its control, with officials saying Friday that the agency made a $1.1 billion profit from October to December when just considering expenses under its control.

The agency has gone all-in on package delivery in recent years, with seven-days-a-week service in major cities during 2014’s holiday season.

First-class mail volume declined in the most recent quarter by just over 1 percent, though revenue grew by 3.7 percent because of an increase in the price of stamps in January 2014.

Political candidates and organizations also gave a boost to the agency’s bottom line during the last part of the year, sending a flurry of mail ahead of November’s midterm elections.

The strong financial quarter followed a three-month span that former Postmaster General Patrick Donahoe called the strongest in six years.

But top postal officials have also openly worried that the good news on the financial front could start to slow without help from Congress.

Joseph Corbett, the service’s chief financial officer, said on a Friday conference call that USPS had a "fantastic quarter" on items it could control. 

But he also added that “liquidity remains a concern,” and agency brass have said there’s not much more they can do to streamline the Postal Service's finances. Corbett said Friday that the agency is currently $91 billion in the hole, due too many long-term liabilities and a healthcare shortfall for retirees.

Lawmakers have been unable to agree on fix for the agency in recent years due to divides over whether the USPS should deliver letters on Saturday and how to deal with the retirement prepayments. 
"Clearly we need legislation to help remedy some of this," Corbett said.
This story was updated at 5:56 p.m.