The USPS was already seeing declining Mail and increasing Package volume, and in the second half of its fiscal year 2020, it saw those trends accelerate due to the pandemic.
The US Postal Service reported its financial results for its fiscal year (October 1, 2019 – September 30, 2020) on Friday.
While Shipping and Packages revenue rose 25.3% in FY2020, that $5.8 billion makes up a small percentage of total operating revenue for the organization, which came in at $73.1 billion.
“While the Postal Service’s results for the first half of 2020 continued prior-year trends, the COVID-19 pandemic resulted in significant shifts in demand affecting all service categories in the second half of the year,” according to Friday’s announcement.
First-Class Mail declined 4.2% to 2.3 billion pieces, and Marketing Mail declined 15.2% to 11.5 billion pieces.
However, “Mail volume began to show slight improvement in the last few weeks of the year, although this was driven in part by the temporary surge in political and election mail associated with the recent general election cycle.”
The USPS also said, “Although package volume growth has recently slowed since its early fourth-quarter peak, the Postal Service believes that consumer behavior has evolved during the pandemic as the nation has increasingly relied on the safety and convenience of e-commerce.”
It’s worth noting, however, that its rivals are getting more aggressive in trying to take share in ecommerce, particularly UPS.
USPS Chief Financial Officer Joseph Corbett said in today’s announcement that Mail volume may never recover to its pre-pandemic levels. “Further, while we do believe that our package volumes will remain higher given what looks to be a potential permanent shift in consumer behavior, we do not expect our package revenue growth over the medium-to-long term to make up for our losses in mail service revenue caused by COVID-19.”
Postmaster General and Chief Executive Officer Louis DeJoy had the following to say in the USPS press release:
“2020 has been an extraordinary year for the Postal Service and the nation. Amid the tumult of the COVID-19 pandemic – and with the challenges of the election, disruptions in our workforce, rapid changes in our marketplace, and long-term financial distress – the 644,000 women and men of the Postal Service delivered for the American public.
“We remain committed to our mission of service in every American community – delivering the medicine, supplies, benefit checks and important correspondence the public depends upon,” said DeJoy. “We are likewise committed to addressing our significant financial imbalances – which were exacerbated by COVID this year and will cause lasting impacts – through a combination of management actions, and legislative and regulatory reforms.”
Net loss for the 2020 fiscal year was $9.2 billion, an increase of $363 million compared to 2019. Controllable loss was $3.8 billion, an increase of $334 million compared to the prior year. You can find the full press release on the USPS Newsroom website.
The USPS is a disaster right now. I have been selling for about 10 years now and I have never seen it this bad. Packages are severely delayed or lost on a regular basis. Worse than any holiday shipping season I have seen. So when the holiday crunch comes on right after thanksgiving, what is going to happen then? Will it be 3 x worse than it is right now. Someone needs to fire this new Postmaster General. He is not making it better he is making it 10x worse. No experience, and with that he doesnt listen to any advice. Thats smart and makes sense. Dope!
So whats the new Postmaster General’s plan? Regular mail volume is going down, and package volume going up. Screw it up so nobody uses USPS for packages. Thats what it’s coming to. Thats real smart!
Amazon really had good fore sight. They are doing their own logistics because the USPS cant be relied on.
I have been selling on eBay since 1998 and on Ruby Lane since 2000, and of hundreds of packages, my experience is ONE lost, ONE delivered to the wrong house (recovered at a different number, same street) by a new carrier and maybe several insurance damage claims. I am a diehard USPS user who has made an effort to understand the service. I gave up a UPS account after reading the back of the waybills; FedEx drop off is 30 miles one way; most of my packages are under 10 pounds and I do not ship enough packages via couriers to afford pickups.
YES, during the pandemic there have been USPS delays. I think I hold the “world record” Pandemic era delay – six weeks to get a package from upstate NY to midwest PA and then only after I intervened and filed a “return to sender” claim (it was not, it was sent on and delivered). The sorting facility where all my Priority Mail must go through has seemed to be a trouble spot. Packages may sit, but eventually reappear and move along. All of my Priority packages must go through there, and some are delayed slightly, while others pass through normally, no way to figure it out. I would not call this a “disaster.” I am surprised, given the covid problems, that things are not worse than they are.
Now that the election is behind us I hope the gossip about deliberate slowing down mail delivery will stop. With “SmartPost” being increasingly used by FedEx and UPS, there should be more revenue coming in. But USPS has a reputation of being so top heavy and not making effective management decisions. I don’t know about Amazon – my sister works for USPS and says their truck comes in daily and they have to plan on an additional hour to handle it.
Honestly, I had significantly more problems several years ago when USPS apparently was figuring out what kind of mail should go to which sorting facility. Scans were showing my packages going crazy places even retracing their steps (but they were all eventually delivered). My experience is that it got figured out and has worked smoothly, until Covid hit.
On the contrary, I have had almost nothing but trouble lately with FedEx (the last incident being a package that was never delivered, except the driver scanned it as “Delivered, Front Door”. Our UPS drivers are terrific but the sorting facilities seem determined to smash every box that goes through. Accordingly, I use USPS exclusively except for perhaps a few shipments a year.
In almost 20 years of selling online with thousands of packages shipped, I don’t even need both hands to count how many packages were completely lost. I rarely have one damaged. My PO is the BEST! I have a great relationship with my regular carrier, and when she sees how many outgoing packages I have today, she will be pleased for me.
Instead of the $10-20/year I used to spend on FCM, now I spend $1000s/year for FCM packages. I don’t understand with so many people selling online, how and why the PO is boohooing their lack of income.