Postal Service logs $586 million quarterly loss

Postal Service logs $586 million quarterly loss
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The U.S. Postal Service reported a $586 million loss in the third quarter of the year.

The new numbers released Monday show that losses are down significantly, as the Postal Service reported a $2 billion loss during the same time last year. However, the lingering issues pressuring its finances are still in place, as overall mail volume declines in an online world.

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The Postal Service reported operating revenue of $16.5 billion for the quarter, roughly the same as last year. Those similar numbers came despite an increase in the price of certain classes of mail, which went into effect at the end of May.

While postage costs grew, the Postal Service did not report a gain in revenue, because overall mail activity was down from 2014 levels. First-class and standard mail volume were down 2.6 percent and 2.1 percent, respectively, from the prior year.

But the silver lining for the Postal Service was again in shipping and package delivery, as revenue and volume for that category were both up by double digits from this time last year.

“The combination of growing package revenues and improved productivity gains were not sufficient to offset mail volume declines and inflationary pressure, largely due to contractual increases in operating expenses, including wages, benefits and transportation." said Chief Financial Officer and Executive Vice President Joseph Corbett.

The Postal Service’s finances have faced tough times for years. A congressionally mandated requirement that the service prepay billions of dollars into health programs for retirees has been a major factor in why the service regularly faces billions of dollars in losses each year.

But of late, there have been some signs the Postal Service is recovering. Through three quarters, profits are up slightly from 2014, even after posting the third-quarter loss.

Fredric Rolando, president of the National Association of Letter Carriers, said that number shows that the Postal Service has made an "impressive...financial turnaround."

"The relatively small operating loss of $197 million for the third quarter isn’t unexpected – the third quarter is typically the slowest – but it doesn’t change the fact that 2015 is turning into one of the USPS’ most impressive annual performances since the Great Recession," he said in a statement.

The Postal Service has been through a tumultuous stretch, as mail delivery is not as intrinsic a part of Americans’ lives, thanks to the widespread adoption of the Internet and online communication. But online commerce has been a boost of sorts, driving up package deliveries as traditional correspondence wanes.

Even when taking out of consideration the prepayment of retiree benefits, the Postal Service still reported a loss of $197 million for the third quarter, after posting a $10 million profit during that time in 2014.

This post updated at 1:20pm.