In its fiscal 2012 first quarter, which ended Dec. 31, USPS
said revenue for its “shipping services,” which encompass
However, those gains were dwarfed by a com-
bined $650 million revenue decline in first-
class mail and the bulk mail service for printed
matter and advertising known as “standard
mail,” USPS said. Revenue for first-class mail,
which contributes two-thirds of USPS’s profit,
declined 4. 1 percent from the year-earlier peri-
od. Total mail volume declined by 6 percent.
First-class mail’s future seems none too
bright. It will account for 37 percent of total
volumes in 2016, down from 44 percent in
2011, according to agency data. Its revenue contribution will drop to 41 percent from 49 percent
in that period. Due to the weakness in first-class
mail, total USPS revenue is expected to drop to
$62 billion by 2016, down from $66 billion in
2011.
In a government filing accompanying the first-quarter results, USPS said the decline in its most
profitable product, combined with congressional
restrictions on entering new lines of business, could
keep it revenue-challenged for many years to come.
“There currently is no foreseen revenue growth
solution that would completely resolve the Postal
Service’s financial problems,” it wrote.
The multiyear outlook for shipping is somewhat
different. By 2016, shipping services will account for
nearly 20 percent of USPS’s revenue, up from 16. 1
percent in 2011, according to USPS data. The volume contribution, however, will be virtually
unchanged, with shipping accounting for 1. 7 percent of total volumes by 2016 compared with 1. 6
percent in 2011. Today, shipping contributes 9. 5
percent to USPS’s annual profit.
Jerry Hempstead, who held high-level U.S. sales
posts at the old Airborne Express and DHL Express and
now heads a parcel consultancy bearing his name, said
parcel volumes at USPS will never reach the levels required
to overcome the financial damage done by the loss of first-
