The Postal Service announced a net loss of $1.5 billion during its second quarter ending March 31. This sounds dismal, but there were encouraging signs that the Postal Service’s efforts to grow its revenues were working. Operation revenue increased by $233 million over the same period last year and “controllable” net income grew $52 million to $313 million.
Controllable income is defined by the Postal Service as net income excluding the prefunding of retiree health benefits and expenses for interest rate and other non-cash worker’s compensation — factors outside of USPS management’s control. “We’re pleased with the increase in out controllable income, which demonstrates that out cost containment and revenue strategies are delivering results,” said Postmaster General Megan Brennan in an earnings call.
The $1.5 billion net loss compares to a $1.9 billion loss during last year’s 2Q/FY2015 would have been ownly $44 million. That is encouraging news.
As has been the case in recent quarters, Chief Financial Officer Joe Corbett explained the increase in operating revenue resulted from a 14% gain in the shipping and package business,. Revenue increased by 27% in Parcel Select, Parcel Return, and Standard Parcels.
Both First Class and Standard Mail volumes declined in 2015 as compared with volumes in 2014. The volume of First Class Mail fell during the quarter, by 2.1% The volume of Standard Mail fell 1.1%
Standard Mail has done better in 2015 despite the downturn in the last quarter, For the first six months of FY2015, Standard Mail volume increased by 564 million pieces over 2014 to almost 41.9 bullion. This growth in volume added $338 million to Postal Service revenues over the same six month period. The 4.3% exigent surcharge also contributed to revenue growth.
Ms. Brennan also reported on the status of recent labor negotiations. Negotiating began in February and was scheduled to conclude on May 20. Those negotiations did not go as planned.