Congress Asks USPS to Recast its Projected Losses

Last April, the Postal Service, and its commercial customers feared the decline in mail volume driven by pandemic-related business shutdowns would turn into a freefall.  Early in that month, the agency shared initial volume and revenue projections with members of the House and Senate committees having postal oversight responsibilities.

Billions in losses

Stating at the outset that the USPS was suffering a “devastating effect from the pandemic,” the PMG explained that projected volume for the rest of the fiscal year will be about half last year’s levels.  Revenue was then already about $500 million below plan, and the expectation at the time was for a loss of about $13 billion by the end of the fiscal year (September 30).  Over the next ten years, losses caused by the pandemic were projected to reach $54.3 billion.

Because the agency was drawing on its cash reserves to cover shortfalls in income and meet its expenses, it foretold not having enough money for its $2 billion payroll by the end of the fiscal year unless some form of support is provided.  (As we now know, all that was ever provided was authority to borrow another $10 billion, but the administration tied so many conditions to it that it’s never been implemented.)

When the Postal Service’s financials for March were released, they showed the onset of the pandemic’s effect, but April’s figures were more stark, showing a total decline in mail volume of 27.2%, with Marketing Mail down by 45%.  Ironically, a surge in online shopping propelled a sharp jump in package volume – up 35% in April compared to April 2019.

As a result, the loss for the month was $1.2 billion, which included $547 million in prefunding and amortization payments and the workers’ compensation adjustment. That loss was not of the magnitude that would have been expected based on projections made a few weeks earlier.

Congress

The Postal Service’s ironic failure to lose as much as it had expected was not overlooked by members of the Congressional committees...

Subscribers can read this article in full in the June 22 edition of the Mailers Hub News

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