US Postal Service has incurred consecutive years with billions in losses. In 2012, it lost $15.9 billion. In 2013, the USPS loss $740 million during the April-June period and $5.5 billion in 2014. The US Postal Service has attempted new business strategies, service innovations and more to turn their ship around. With their adjustments, the mail company was looking to have a sizable upswing in revenue this year, however, it’s not looking very favorable overall so far.
The US Postal Service has reported a $1.5 billion loss during first three months of this year. The mail giant says that it has experienced positive results with more consumers utilizing its’ shipping and packaging services; however, the challenge has been its’ costs and declining product sales. The shipping and package volume increased by 14.4 percent increase in shipping and package volume, which equated to 1.3 percent or $223 million in higher operating revenue. However, during the period, the Postal Service sent 420 million fewer pieces of mail in comparison to the same period last year. It’s First-class mail decreased by 2.1 percent, in addition to its’ standard mail numbers falling by 1.1 percent.
“Shipping and package services are a key business driver. However, operating margins in this business are lower than in mailing services,” said Joseph Corbett, the Postal Service’s chief financial officer. He went on to say, “And, while we’re pleased to see a small increase in controllable income, to improve our margins, we’ll need to make investments in our network infrastructure and delivery vehicles.” The article mentions how if the retiree health benefit prefunding expense obligation via the government was excluded, its’ net loss would have been only $44 million versus a $447 million loss during this time last year.
New product innovation may help the US Postal Service recover from other declining mail sales. One viable option the USPS is to begin offering a same-day delivery service to customers that need their packages delivered fast. A courier service company like 1-800Courier can offer a time-sensitive shipping method for this market of consumers.
Couriers also consolidate packages which results in competitive pricing for same-day air as well. The US Postal Service and other delivery companies seeking more product lines can easily count on 1-800Couier!
Reference: 5.8.15, The Daily Astorian, US Postal Service reports $1.5 billion loss