This week, the U.S. Postal Service shared its financial results for the 2023 fiscal year, which ended on September 30th. Based on what USPS shared, the agency incurred a net loss of $6.5 billion during fiscal year 2023. This figure marks a year-over-year decline of over $62 billion compared to the $56.0 billion net income that USPS recorded during its fiscal year 2022.
USPS Cited Declining Mail Volume & Inflation as the Main Reasons for the Net Loss in 2023
One key factor contributing to the Postal Service’s year-over-year financial decline is a decrease in mail revenue, which fell by $321 million compared to the previous year, or by 0.4%. USPS attributed this decline mainly to a drop in mail volume, particularly in Marketing Mail. According to USPS, a higher share of its business customers are turning to digital and mobile advertising instead of using Marketing Mail services.
In a statement detailing its fiscal year 2023 results, USPS said the following regarding Marketing Mai:
“Marketing Mail revenue decreased $920 million, or 5.8%, on a volume decline of 7.7 billion pieces, or 11.4%, compared to the same period last year.”
First-Class Mail, the Postal Service’s flagship mailing service for sending letters and postcards, also experienced a decline in volume.
The Postal Service also cited a “higher inflationary environment” as a reason for declining mail volume, since higher prices affected print media production costs for businesses. According to the U.S. Labor Department’s November 14th press release, inflation in the U.S. as measured by the Consumer Price Index (CPI) is at 3.2% compared to the same period last year.
Delivering More Packages Helped USPS Offset Dwindling Mail Amounts
While mail volume and revenue declined during the 2023 fiscal year, USPS noted that it saw increases in revenue from package services, such as USPS Ground Advantage (which combined the now-defunct services First Class Package and Parcel Select Ground into a single ground-based shipping service). According to USPS, rolling out this service in July of 2023 allowed the agency to control more costs around its package services and, as a result, generate additional revenue.
Overall, USPS reported total operating revenue of $78.2 billion for the year, while total operating expenses increased to $85.4 billion. In the statement mentioned above, USPS said that it remains “highly focused” on implementing its Delivering for America 10-year plan, with the goal of the Postal Service becoming a more “effective, efficient and competitive” mailing provider and shipping carrier for the long term.