How USPS lost billions despite price hikes—the surprising reality!
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The U.S. Postal Service (USPS) has long been a vital part of American life, but recent news has many questioning its future. Despite price hikes on postage stamps, the postal service has faced a major financial setback.
What led to this, and what does it mean for the future of our cherished postal service?
But the latest figures are particularly alarming.
The agency's annual loss widened significantly, from $6.5 billion to $9.5 billion in the fiscal year ending September 30.
This is despite a slight uptick in revenue, which rose 1.7% to $79.5 billion, following the two rate hikes.
The postal service attributes the deepening losses to substantial noncash contributions to worker compensation.
When these expenses, along with other costs deemed beyond management's control, are excluded, the USPS still faced a $1.8 billion loss.
This is an improvement from the previous year's $2.2 billion deficit, but it's a far cry from the profitability that Postmaster Louis DeJoy's 10-year overhaul plan aimed to achieve.
In 2024 alone, the cost of a “Forever” stamp saw two hikes, ultimately reaching 73 cents.
But these increases have a flip side: they may be driving customers away.
Mail volume has seen a decline, with the USPS delivering 112 billion pieces of mail, magazines, packages, and other items last year—a 3.2% drop from the previous fiscal year.
Keep US Posted, an advocacy group representing various stakeholders reliant on the USPS, has called the $9.5 billion loss “staggering” and $3 billion more than anticipated.
They suggest that the rate hikes are counterproductive, leading to a significant reduction in mail volume.
Kevin Yoder, executive director of Keep US Posted and a former Republican Congressman, criticized the USPS's focus on package delivery over traditional mail, which he notes is still the largest revenue generator for the service.
In a related story, read about the mail deadlines announced by the USPS this upcoming holiday and check out the stunning collection of Christmas 2024 stamps here.
What are your thoughts about the USPS's financial troubles? Are you concerned about the future of mail delivery? Share your thoughts and opinions in the comments below.
What led to this, and what does it mean for the future of our cherished postal service?
The financial predicament of the USPS
The USPS's financial woes are not a new story; they've been the subject of headlines and heated debates for years.But the latest figures are particularly alarming.
The U.S. Postal Service reported a substantial annual loss of nearly $10 billion for the fiscal year ended September 30. Image source: Pexels.
The agency's annual loss widened significantly, from $6.5 billion to $9.5 billion in the fiscal year ending September 30.
This is despite a slight uptick in revenue, which rose 1.7% to $79.5 billion, following the two rate hikes.
The postal service attributes the deepening losses to substantial noncash contributions to worker compensation.
When these expenses, along with other costs deemed beyond management's control, are excluded, the USPS still faced a $1.8 billion loss.
This is an improvement from the previous year's $2.2 billion deficit, but it's a far cry from the profitability that Postmaster Louis DeJoy's 10-year overhaul plan aimed to achieve.
The price of stamps and the decline of mail
The USPS's strategy included increasing postal rates, a move DeJoy argued was vital to stop the financial hemorrhaging.In 2024 alone, the cost of a “Forever” stamp saw two hikes, ultimately reaching 73 cents.
But these increases have a flip side: they may be driving customers away.
Mail volume has seen a decline, with the USPS delivering 112 billion pieces of mail, magazines, packages, and other items last year—a 3.2% drop from the previous fiscal year.
Keep US Posted, an advocacy group representing various stakeholders reliant on the USPS, has called the $9.5 billion loss “staggering” and $3 billion more than anticipated.
They suggest that the rate hikes are counterproductive, leading to a significant reduction in mail volume.
The parcel delivery puzzle
The USPS's efforts to capture a share of the parcel market, which is already brimming with competitors, have also been called into question.Kevin Yoder, executive director of Keep US Posted and a former Republican Congressman, criticized the USPS's focus on package delivery over traditional mail, which he notes is still the largest revenue generator for the service.
In a related story, read about the mail deadlines announced by the USPS this upcoming holiday and check out the stunning collection of Christmas 2024 stamps here.
