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2014-12-09

US letter mail revenue

Revenue from letters up in US in 2014

Some people would have you believe that the Postal Service continues to incur net losses because people don’t use letter mail anymore. “The Internet has replaced letter mail,” so the argument goes. However, a look at the 2014 US Postal Service performance data doesn’t back that argument. According to the most recent monthly financial report filed on the US Postal Regulatory Commission website, revenue from both First-Class and Standard Mail is up in 2014.

For the first 11 months of 2014, First-Class Mail revenue increased by about 1 percent and Standard Mail revenue increased by almost 3 percent. Taken together (First-Class and Standard), letter mail revenue is up 1.6 percent in 2014 compared with a decline of almost 10 percent during the same period in 2009. The 2014 figure includes a price increase for part of the year, but it also reflects significantly less volume decline during 2014 due to overall increases in U.S. economic activity. Without an improving volume situation, raising prices alone wouldn’t result in the positive revenue increase seen in 2014.

Recall that the start of the Postal Service’s 2009 fiscal year began in October 2008, 15 days after Lehman Brothers filed for bankruptcy—the largest bankruptcy in U.S. history. Against this backdrop, First-Class Mail and Standard Mail plummeted, as did the business results for many U.S. companies. It has taken the economy and the Postal Service a while to recover from such a severe downturn.

Postal Service letter mail performance has improved substantially, as evidenced now in the positive 2014 revenue growth. Service quality (made possible by letter carriers!) has been a strong driver of this revenue growth, as people use the Postal Service because its workforce delivers physical mail quickly, dependably, and efficiently, six days a week. Maintenance of delivery standards and service quality, combined with continued improvements in the economy, should help to further bolster letter mail revenue. (Source: US National Association of Letter Carriers.)

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