Rising e-commerce business marks sole bright spot on USPS' books

The U.S. Postal Service (USPS) reported total revenue of $19.4 billion for the first quarter of fiscal 2020, a decrease of $363 million compared to the same quarter last year due to "systemic challenges" and a continuing slump in mail volumes, the post office said.

The 1.8 percent overall revenue decline reflected "continuing secular declines in transaction mail" that drove a $168 million drop in First-Class Mail revenue, or 2.5 percent. USPS's fiscal first quarter ran Oct. 1 to Dec. 31, 2019.

The service also saw declines in periodicals revenue—which dropped $24 million, or 7.7 percent—and a drop in marketing mail, which sunk $254 million, or 5.4 percent.

The lone bright spot on USPS' balance sheet was its revenue from shipping and packages, which increased by $146 million, or 2.3 percent, despite a volume decline of 84 million pieces, or 4.6 percent, compared to the same quarter last year.

"We demonstrated once again the power of our unrivaled network and our ability to provide solutions for our customers while growing package volumes during our peak period. Package revenue for the quarter grew by $146 million," Postmaster General and CEO Megan J. Brennan said in a release. "However, overall volumes and mail revenues for the quarter were down, and we continue to face systemic profitability challenges due to our restrictive business model and mandated costs."

In response, USPS said it will "continue to aggressively pursue opportunities to generate profitable revenues and drive greater operational efficiencies under our current structure, while also seeking legislative and regulatory reforms to allow the Postal Service to better invest in our business, compete for customers, control our costs, and serve the evolving needs of the public," Brennan said.

As a sign of that process, USPS said that in its most recent quarter, total work hours declined, compensation and benefits expense declined by $190 million, and total expenses were down approximately $1.1 billion.