The U.S. Postal Service made improvements to its balance sheet in fiscal 2021, reducing its net loss by nearly half as operating revenue increased 5.3%.
For the year ended Sept. 30, the USPS lost $4.9 billion compared with $9.2 million in 2020. Revenue rose from $73.1 billion to $77.0 billion, led by shipping and packages, while operating expenses fell to $81.8 billion from $82.2 billion.
“Despite the magnitude of our financial challenges, we are making encouraging progress in correcting the long-term imbalance in postal revenues and expenses, and we expect to see continued improvement as we fully implement the Delivering for America plan,” Postmaster General Louis DeJoy said in a news release.
Under the plan that DeJoy announced in March, USPS is aiming to avoid $160 billion in projected losses by 2030 through a combination of cost and revenue improvement strategies and regulatory and legislative actions.
USPS has reported net losses of nearly $100 billion since 2007, reflecting in part the 2006 legislation that required that the agency pre-fund more than $120 billion in retiree healthcare and pension liabilities.
Congress is considering a plan to provide USPS with $46 billion in financial relief over 10 years, including eliminating the pension pre-funding requirement.
The agency’s shipping and packages revenue increased by $3.5 billion in 2021, or 12.2%, largely driven by the surge in e-commerce resulting from record holiday volume. Political- and election-related mail contributed to a 4.9% increase in marketing mail revenue to $14.6 billion.
However, first-class mail volumes fell to 50.7 billion pieces, the lowest number since 1971, and revenue dropped 2.1% to $23.3 billion. “USPS has struggled with poor delivery performance over the past year, facing a huge boost in packages and staffing issues due to COVID-19,” Reuters said.
DeJoy said the agency’s “enterprise-wide automation investments … have dramatically expanded our capacity to process and deliver holiday package volume for the nation” and it is “making meaningful progress towards meeting or exceeding 95 percent on-time service performance for all mail and shipping products.”