Postal Service earnings soar during peak period; DeJoy asserts that overhauls are proving successful
The United States Postal Service (USPS) has made a significant turnaround, reporting a nearly $1 billion profit in the first quarter of fiscal 2025, a stark contrast to the $2 billion loss during the same period in fiscal 2024.
Postmaster General Louis DeJoy attributes this success to the cost-cutting measures, improved operational efficiencies, and expansion of package delivery services he implemented between fiscal years 2024 and 2025. Revenue jumped by 4% to $22.5 billion, and the agency slashed $326 million in transportation expenses.
Money coming in from shipping and packages grew by 3%, while First-Class mail revenue increased by 4%. Marketing mail income climbed by 11%, largely driven by political and election mail. The U.S. Postal Service even made a profit of $144 million during its busiest season of the year, marking the first time since the COVID-19 pandemic that it has operated in the black.
However, the Postal Regulatory Commission recently blasted DeJoy's reform plans, suggesting they were poorly thought out and contained "little convincing evidence" they would succeed. A House committee and a GOP senator have also piled on criticism of DeJoy's postal overhaul plans.
Despite the profitable first quarter, the Postal Service is expected to lose billions of dollars in fiscal 2025. Much of the turnaround came from changes in the calculations of USPS' workers' compensation obligations. Postmaster General DeJoy offered $15,000 buyouts to some mail handlers as an incentive for them to take early retirement packages, intended to "right-size" the staffing, resulting in a significant long-term cost benefit to the Postal Service.
DeJoy's Delivering for America plan, which involves reorganising the postal network, consolidating facilities, and altering service standards, is still being implemented. The plan's ultimate success, according to DeJoy, is proven by the turnaround in the most recent fiscal quarter.
It is important to note that DeJoy initially projected USPS would be profitable by 2023, but this goal may not be met. The Postal Service lost $9.5B in FY24, and although it has made a profit in the first quarter of FY25, it is expected to end the year in the red.
The U.S. Postal Service continues to navigate challenging financial waters, but the profitable first quarter provides a glimmer of hope for a more financially stable future.
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