Tag Archives: Parcel Delivery

Culture, direct mail, Economics, Government, Marketing, USPS

USPS: Hidden Good Fortunes

Every quarter the USPS publishes their Revenues, Pieces and Weights Report. For the numerical savants out there, this is a feast of numbers beyond one sitting, for sure.

But the big story is, the USPS continues to perform in a stellar fashion, despite the ravaging onset of online displacement of hard copy as we know it.

If you think the post office is in trouble? Have another think.

Q3 YTD Results–9 Months Only
~The bad news– and what is publicly perceived, First Class revenues have fallen from $22.7 billion in 2013 to $19.9 in 2018. (off $2.7B or -12%).

~In the same 5 years, Magazines and Periodicals dropped from $1.3 billion to $984 million. (off $276M or -22%)

These two categories accounted for a $3 billion shortfall in revenue.

~Direct Mail, which includes catalogs, has ceded $294 million over the past 5 years. (off -2%) to $12.5 billion in the first three quarters of fiscal 2018.

Now for the good news.

In 2018, competitive Parcel and Package delivery has grown from $9.8 billion in 2013 to $16.9 billion. That’s a $7.1 billion growth, or 73%!

So we can certainly see how internet and digital media have blasted the legacy paper and ink communications business to smithereens.

What we did not see however was that online commerce has grown so rapidly that the USPS has found its newest niche: order delivery.

Year to date, 9 months, FY 2018, the USPS has delivered 4.2 billion pieces. Compare that to 2.3 billion, 5 years ago.

The USPS has another interesting report available, entitled Public Cost and Revenue Analysis, Fiscal Year 2017.

I like this report because it tells you how well it covers its costs of operation.  For instance, First Class Mail has a cost coverage of 210%.  Basically, its revenues are double its costs.

Direct Mail cost coverage is 153%.  Magazines and Periodicals, only 69%.  But the Package and Parcel delivery business, in the competitive markets, cost coverage is 155%.

Overall revenues for 9 months are $53.8 billion, up 5% from $51.2B 5 years ago.

These numbers indicate the ebb and flow of the door-to-door, pick-up-and-delivery business, and how the USPS is responding to America’s choices in communications.  True, the numbers do not account for front office costs, and legacy benefit and pension challenges, where there is a different story to tell.

But for making their daily appointed rounds, no one does it better than the USPS.

 

Thanks for reading!  If you would like to see these reports for yourself, have at it!

Click here: Fiscal year 2018 Q3 Revenues Pieces and Weights

and here: Public Cost and Revenue Analysis 2017

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direct mail, Government, Marketing, Media, Thank You, USPS

Their Appointed Rounds

The United States Postal Service closed out their fiscal year September 30.  Never mind that the rest of the world goes by the annual calendar; the USPS wanted to beat the Christmas rush.

All in, the giant continues to perform well, within the confines of its quasi-government walls.  I wish the rest of the Federal government departments spent as much time looking after their own performance and expenses as does the USPS.

But from the latest Revenues Pieces And Weights report, here are a few glimmers of surprise and excitement.

  1.  It is a $69.6 billion dollar enterprise.  In the Fortune 500 list, it hovers around #37, bigger than Target, and smaller than Procter & Gamble, both good neighbors.  Like both of these companies, the USPS is an indicator of the USA’s pulse rate, though we will admit that it has slipped a bit.
  2. In 2017, the USPS revenues fell $1.8 billion.  We know why.  The Web, social media, email have all disenfranchised much of the USPS core business: first class mail and standard mail.
  3. First class mail continues to fall, $1.9 billion.  Compared to last year, it delivered 2.5 billion fewer pieces of mail, a drop of 4.1%.  Why? Because we receive our invoices, checks and statements electronically.  We pay electronically too.
  4. Standard Mail, now called Marketing Mail, dropped 2.6 billion pieces, about 3.2%.  Why?  Last year was a mail-infused election year.  It was distinguished by huge volumes of mail, from you know who, despite his predilection for Twitter.
  5. Overall, in its market dominant categories, that is, where it holds monopoly rights, revenues fell just over $4.0 billion.
  6. In the open competitive markets, ie., parcels and packages, revenues were UP over $2.2 billion, a 12.5% increase.  Wow! Who knew?

The Web Taketh, And It Giveth

Here’s what I find impressive about the USPS.  Despite the constant nagging of the digital futurists who want to write the Obit for the post office, it continues to hold its own.  In an environment where Internet media are running rampant, the USPS has found a broad new niche: parcel delivery, a $20 billion business.  If anyone should be worried, it will be the brick and mortar retail stores. Ask Sears.  Ask Toys R Us.  Ask Amazon.

American consumers have taken to the Web in all respects, but at day’s end, they need physical product delivery, and the USPS has risen to serving that need.  After all, they were coming by our house anyway.  Their two main competitors are UPS and Fedex, the latter using the postal carrier to make the “last mile” delivery.

Neither Rain, Nor Snow, Nor Gloom of Night…

Postal carriers are the only American entity which visit 157,000,000 addresses every day.  They delivered, all in, 149 billion items in 2017.  They lifted 24 billion pounds, or 12 million tons, of physical product: mail, checks, magazines, parcels and yes, live bees and plants. The USPS has over 500,000 career employees and another 140,000 part-timers.  While this may seem like a wildly aggressive employer, I put it to you that the postal employee actually delivers, a claim many can’t make for other government institutions.

So hats off to the USPS.  It continues to fight the currents, and with astonishingly little help from its political friends, it far surpasses its governmental cousins.

Thanks for reading! If you would like to take a look at the USPS 10-K for 2017, click here!

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