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US Postal Service parcel volumes fell in Q2

Parcel and shipping revenue rise modestly as demand abates

Postal Service's fiscal q2 shipping volumes fall, revenue rises modestly (Photo: Jim Allen/FreightWaves)

The U.S. Postal Service late Thursday reported fiscal 2022 second-quarter results that included a decline in shipping and parcel volume as the pandemic-driven surge in online ordering continued to recede.

Shipping and parcel revenue came in at $7.87 billion, slightly above the same period a year ago. Volumes fell to 1.77 billion pieces from 1.866 billion due to the impact of recently implemented shipping rate increases, the Postal Service said. Volumes remain above pre-pandemic levels, the agency said. 

The Postal Service reported an adjusted loss of $1.7 billion in the quarter, about the same as a year ago. The adjusted loss excludes the impact of noncash workers’ compensation adjustments, the agency said. The agency’s operating revenue rose by $896 million to nearly $19.8 billion. First-class mail revenue rose by about $300 million to $6.27 billion, while volume fell slightly to 12.98 billion pieces, the Postal Service said.

As of Sunday, the Postal Service began slowing some of its deliveries of first-class parcels in an effort to reduce airfreight costs and to increase its underutilized surface transportation network. Nearly one-third of all first-class parcels will be delivered one to two days later than the current two- to three-day delivery windows, the Postal Service said.

Effective next quarter, the Postal Service’s quarterly results will include the effects of postal reform legislation signed into law on April 6. Among other things, the law ends the requirement that the Postal Service annually prepay future retiree health benefits. The law also cancels all delinquent pre-funding obligations. Future retirees are required to enroll in Medicare Parts A and B, a shift that is expected to save the Postal Service about $22.6 billion in premium payments over the next 10 years.

The pre-funding obligation, unique among all public sector agencies as well as private industry, had cost the agency about $5.5 billion a year. The Postal Service has defaulted on billions of dollars of scheduled payments since 2012.

Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.