Despite setting a goal to break even, the United States Postal Service (USPS) announced on Tuesday a substantial net loss of $6.5 billion for the fiscal year 2023. The agency reported a decrease in operating revenue by $321 million, or 0.4%, dropping to $78.2 billion, with first-class mail reaching its lowest volume since 1968.
The federal agency attributed the notable losses to $2.6 billion in inflation-related costs and a decline in mail volume. The fiscal year concluded on September 30, 2023.
In FY 2023, the United States Postal Service (USPS) saw its total operating expenses rise to $85.4 billion, marking an increase of $5.8 billion or 7.3% from the previous year. This increase came despite the USPS's ambition to achieve a break-even point as part of its "Delivering for America" plan. This 10-year restructuring strategy, unveiled in 2021, aimed to counteract a forecasted $160 billion in losses. Nevertheless, the plan has encountered early setbacks due to the losses reported for 2023.
These results contrast sharply with the previous year when the USPS recorded a net income of $56 billion. It's important to note, however, that this figure was largely due to a financial lifeline provided by the Postal Service Reform Act of 2022, which eliminated the requirement for the agency to pre-fund retiree health benefits. Without this assistance, the agency's adjusted loss in 2022 would have been $473 million.
Postmaster General Louis DeJoy expressed disappointment with the results, but emphasized that the USPS is in the initial phase of what is one of the largest organizational transformations in the nation. He pointed out that this restructuring is beginning to yield more consistent, reliable, and timely deliveries to businesses and residences across America.
"We are also addressing near-term financial headwinds relative to inflation as we make strong progress in our long-term cost control and revenue-generating strategies," DeJoy said.
"The whole organization is highly focused on implementation of the Delivering for America plan and creating a more effective, efficient and competitive Postal Service to serve the nation far into the future."
The USPS, employing 640,000 people, experienced a 2.6% rise in costs for employee compensation and benefits, amounting to $52.8 billion. The agency aims to reduce transportation expenses by $1 billion in the coming year. Additionally, it intends to implement a postage rate increase in January, which would be the fifth such hike since 2021, following closely after a postage increase in July, as reported by CBS.
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