The U.S. Postal Service, blasted by President Trump for enriching e-commerce giant Amazon at its own expense, posted a loss of $540 million in the last three months of the year, a period that's typically its best quarter.
The loss in the three months through December, which compared with profit of $1.44 billion a year earlier, was driven by declines in first-class mail volume, higher costs for retiree healthcare and increasing transportation expenses, the Postal Service said in a statement. The Christmas holiday period, which is the service's first fiscal quarter, is usually buoyed by families and friends mailing cards and packages.
The performance underscores Postmaster General Megan J. Brennan's requests for Congress and regulators to approve reforms including giving the organization more flexibility to set prices based on market conditions.
"We will continue to do everything within our control to improve operating efficiencies, manage expenses, expand our use of technology and keep mail affordable, but these actions must be combined with regulatory and legislative changes," she said in a statement on Friday.
Mail volumes dropped by 2 billion pieces, or about 5 percent, even as package deliveries increased, the agency said. In fact, the Postal Service set a record a week before Christmas with the delivery of more than 37 million packages in a single day, the most in its 240-year history.
"The pressure continues to build," said Chief Financial Officer Joseph Corbett, since the profit margin on package deliveries is lower than on first-class and marketing mail.
Controllable income, which excludes retiree health benefits and workers' compensation liabilities, fell 32 percent to $353 million in the quarter, the Postal Service said.
The organization frequently handles the last leg of delivery for companies from FedEx and UPS to Amazon, which has prompted the president to complain that it's subsidizing growth at those companies.
Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!— Donald J. Trump (@realDonaldTrump) December 29, 2017
Pricing is based on market forces, including the "increased competition in the package arena and, increasingly, in the last mile — which has historically been a competitive advantage for us," Brennan said Friday.
"We compete for business every day," she added. "We intend to continue to work to maintain the customer base that we have and expand where we can."