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Home / Business / Post blames US government – not Amazon – for billions in losses

Post blames US government – not Amazon – for billions in losses



The US Postal Service blamed most of the $ 1.3 billion it lost in its second fiscal quarter for "inflexible" government policies, and some blamed inflation and a drop in quality posts on supply deals Customers, notably Amazon.com Inc.

The net loss for the quarter ended March 31, increased from 562 million in the same period last year. The "taxable" loss that excludes non-recurring items outside management's control was $ 656 million after a $ 12 million gain last year.

& # 39; Despite the growth in the parcel business, our financial results reflect the systemic trends in the market and the impact of an inflexible, legally mandated business model that limits our ability to generate sufficient revenue and imposes costs on us that we do not can afford. & # 39;


Postmaster General Megan Brennan

Total revenue increased by 1

.4% to $ 17.50 billion. Revenue growth of 9.5% for mail order and parcel sales and a 15% increase in foreign sales contributed to a 2.5% decline in premium mail.

First-class mail revenue of $ 6.46 billion accounted for 36.9 percent of total revenue compared to 38.3 percent a year ago, while the share rose from 27.3 percent to 29.4 percent.

USPS called the taxable loss This is mainly due to an increase in the cost of health care benefits to pensioners of $ 236 million due to changes in actuarial assumptions and an increase in compensation costs by $ 364 million in support of the "labor-intensive Parcel business "and contractual wage adjustments. Higher fuel costs and road inflation increased transportation costs by $ 155 million.

In addition to tax expenditures, unfunded pension benefits and retiree health benefits increased by $ 766 million as a result of changes in actuarial assumptions, while labor compensation costs decreased by $ 658

USPS said it was "urgent necessary legislative and regulatory changes "as well as other management measures to restore financial stability.

"Despite the growth of our parcel business, our financial results reflect systemic trends in the market and the impact of an inflexible, statutory business model that limits our ability to generate sufficient revenue and incur costs that we can not afford can, "said Post Minister General Megan Brennan

are different from the comments made by President Donald Trump last month. Trump said the USPS would lose "billions of dollars" because of a "delivery boy" deal with Amazon

AMZN, -0.38%

below that, he said, the post lost an average of $ 1.50 on every package delivered for the e-commerce giant.

At that time the post office said MarketWatch, it has no comment on the matter.

Do not Miss: Amazon shares extended the fall after Trump raised "concerns" about the US Post.

After many of the President's allegations, including former Secretary of State Patrick Donahoe, contradicted, Trump issued an order On 12 April, an assessment of the post office's finances was requested

In the past, a USPS complaint was filed with one of imposed on the government, which forced the postal service to lift an increase of 2 cents per stamp for a first-class letter in 2016.

"America needs a financially strong postal service that can and will continue to invest in its future meet the needs of American businesses and consumers, "said Brennan. "With continued aggressive administration and greater legal authority to respond to changes in our market and control our costs, the postal service can return to financial sustainability."

The USPS results come at a time when in the last three months shares in the parcel delivery service United Parcel Service Inc.

UPS, + 1.32%

have 8.9% and that of competing FedEx Corp.

FDX, + 1.32%

climbed 6.7%, while Amazon's stock jumped 19.8% and the S & P 500 index rose

SPX, + 0.03%

gained 4.2%.


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