The U.S. Postal Service posted increases in revenue and shipping volume but still reported a significant loss in the third quarter of the fiscal year.
The Postal Service on Tuesday reported a net loss of $1.57 billion for the three months ending June 30, compared with a loss of $586 million during the same period last year, highlighting the need for Congress to overhaul the long-struggling agency.
"We continue to post double-digit gains in package volume and are well-positioned operationally for further growth,” said Postmaster General and CEO Megan Brennan.
"Despite the encouraging numbers, net losses continue to mount,” Brennan said.
“Our results in the quarter further underscore the need for legislative reform that provides the organization with greater financial stability."
Shipping and packages posted revenue growth of $645 million, or 18 percent. That was offset by a drop in revenue for first-class mail of $379 million, or 5.5 percent, due largely to the expiration of the exigent surcharge put in place to offset losses through the recession.
The April 10 expiration of the surcharge reduced revenue in the quarter by about $450 million, and will lower revenue by about $500 million for the fourth quarter and by almost $2 billion a year.
Overall, total revenue rose to $17.72 billion, which is a 7 percent increase, but operating revenue was up only 0.7 percent over the same period last year.
Operating expenses were 12.4 percent higher during the three-month period.
Meanwhile, labor costs increased by $387 million, largely because of the increase in shipping volume, while transportation costs rose by $97 million.
The controllable loss, which excludes pre-funding retiree health benefits or a change in the accounting estimates for workers’ compensation, totaled $552 million for the quarter compared with $197 million last year.
Sen. Tom CarperThomas (Tom) Richard CarperOvernight Energy & Environment — Presented by ExxonMobil — Dems seek to preserve climate provisions Democrats wrangle to keep climate priorities in spending bill Five ways Senate could change Biden's spending plan MORE (D-Del.), the top Democrat on the Senate Homeland Security and Governmental Affairs Committee, said the result is no surprise and is another sign that Congress must take action soon.
Carper argued that when Congress returns from recess in September, there will be an opportunity to approve legislation that can stabilize the $1.4 trillion mailing industry.
“The agency’s latest financial report forecasts a reality we’ve known for years — without congressional action, the Postal Service will remain unable to raise enough revenue to cover its costs and will continue to suffer losses that threaten its long-term viability,” Carper said in a statement.
“Each quarter, these reports underscore the Postal Service’s dire situation and remind us that doing nothing cannot be an option,” he said.
The House Oversight and Government Reform Committee has approved a measure and Carper wants to push legislation through the Senate.
Carper introduced legislation nearly a year ago aimed at putting the Postal Service on firmer financial footing.