(This Nov. 14 story has been corrected to change the first-class mail volume figure to say 46 billion, not 46 million, in paragraph 5)
By David Shepardson
WASHINGTON (Reuters) - The U.S. Postal Service on Tuesday reported a $6.5 billion net loss for the 12 months ending Sept. 30 and said it will not breakeven next year as first-class mail fell to the lowest volume since 1968.
The Postal Service said revenue fell 0.4% to $78.2 billion results. U.S. Postmaster General Louis DeJoy said the loss includes $2.6 billion in inflation costs "above what we projected and what we were able to recover... We are not happy with this result."
The agency has been aggressively hiking stamp prices and is in the middle of a 10-year restructuring plan announced in 2021 that aims to eliminate $160 billion in predicted losses over the next decade and had forecast 2023 as a breakeven year.
"Despite substantial planned reductions in our cost of operations and growth in our package revenues, we will not reach breakeven results in 2024," DeJoy said, noting USPS has reduced the $160 billion in losses projected in 2021 "to less than $60 billion," DeJoy said.
First-class mail volume fell 6.1% in 2023 to 46 billion pieces and is down 53% since 2006, but revenue increased by $515 million because of higher stamp prices.
The net loss was also impacted by accounting for its underfunded retirements caused by actuarial revaluation and discount rate changes. USPS, which has 640,000 employees reported a 2.6% increase in employee compensation and benefits costs to $52.8 billion. USPS plans to cut $1 billion in transportation costs next year.
Total operating expenses were $85.4 billion for the year, an increase of $5.8 billion, or 7.3%. USPS said to preserve liquidity it did not make the full $5.1 billion in retirement plan payments due.
In April 2022, U.S. President Joe Biden signed legislation providing USPS with about $50 billion in financial relief over a decade.
Last month, USPS said it was seeking approval to raise the price of first-class stamps to 68 cents from 66 cents effective Jan. 21. Stamp prices are up 32% over the last four years since early 2019 when they were 50 cents.
First-class mail, used by most people to send letters and pay bills, is the highest revenue-generating mail class, accounting for $24.5 billion, or 31% of USPS 2023 revenue.