By David Shepardson
November 14, 2023 – 8:18 PM UTC
WASHINGTON, Nov 14 (Reuters) – The U.S. Postal Service on Tuesday reported a $6.5 billion net loss for the 12 months ending Sept. 30 with revenue down 0.4% to $78.2 billion as first-class mail fell to the lowest volume since 1968.
The Postal Service said results were significantly affected by the impact of inflation on operating expenses. The agency has been aggressively hiking stamp prices and is in the middle of a 10-year restructuring plan announced in 2021 that aims to eliminate $160 billion in predicted losses over the next decade.
Postmaster General Louis DeJoy said USPS is “addressing near-term financial headwinds relative to inflation as we make strong progress in our long-term cost control and revenue generating strategies.”
First-class mail volume fell 6.1% in 2023 to 46 million pieces and is down 53% since 2006, but revenue increased by $515 million because of higher stamp prices.
The net loss was also impacted by accounting for its underfunded retirements caused by actuarial revaluation and discount rate changes. USPS, which has 640,000 employees, said it had 28 million less work hours in the 2023 budget year but reported a 2.6% increase in employee compensation and benefits costs to $52.8 billion.
Total operating expenses were $85.4 billion for the year, an increase of $5.8 billion, or 7.3%. USPS said to preserve liquidity it did not make the full $5.1 billion in retirement plan payments due.
In April 2022, U.S. President Joe Biden signed legislation providing USPS with about $50 billion in financial relief over a decade.
Last month, USPS said it was seeking approval to raise the price of first-class stamps to 68 cents from 66 cents effective Jan. 21.
First-class mail, used by most people to send letters and pay bills, is the highest revenue-generating mail class, accounting for $24.5 billion, or 31% of USPS 2023 revenue.
Reporting by David ShepardsonEditing by Chris Reese and Aurora Ellis