Earnings

Amazon Delivery Causes USPS Shipments To Decline

Monetizing the Mailbox for Last-Mile Delivery

The U.S. Postal Service (USPS) reported a decline in package shipping for the third quarter of fiscal 2019.

According to a press release, while the agency saw an increase in total revenue for the period — $17.1 billion, which is a boost of $16 million — it was essentially flat compared to the same quarter last year.

There were declines in package shipment for USPS, with first-class mail revenue falling by $98 million, or 1.6 percent, on a volume decline of 361 million pieces, or 2.7 percent, compared to the same quarter last year.

In addition, marketing mail revenue declined by $121 million, or 3 percent, on a volume decline of 878 million pieces, or 4.7 percent, compared to last year, and periodicals revenue went down by $38 million, or 11.2 percent, on a volume decline of 173 million pieces.

Total operating expenses reached $19.3 billion for the quarter, a 4.3 percent increase. The net loss for the quarter totaled nearly $2.3 billion, an increase of $767 million, compared to a net loss of nearly $1.5 billion for the same quarter last year.

“We continue to face imbalances in our business model that must be fixed through legislative and regulatory change,” Postmaster General and Chief Executive Officer Megan J. Brennan said in the release. “As we work to effectuate that change, we continue our ongoing aggressive management actions, and remain focused on delivering for the American public, and meeting their evolving business and residential needs. We are actively adapting to changes throughout the mailing and shipping landscape, providing customers with new solutions that add value for their investment, improve the service we provide, and drive internal efficiencies.”

“We continue to focus on maximizing productivity,” added Chief Financial Officer and Executive Vice President Joseph Corbett. “While many of our network costs are fixed to meet our universal service obligations, we reduced work hours by approximately 1.7 million relative to the same quarter last year.”

According to ZDNet, Corbett also cited “intense competition” from “certain major customers.” Although he didn’t name any company specifically, it is assumed he’s talking about Amazon, which has been building its own delivery network and creating new shipping methods.

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