Standard Mail Down in USPS' 2nd Quarter

The U.S. Postal Service reported that both revenue and volume for the Standard Mail category have decreased between this year's and last year's second fiscal quarter.

The numbers, which appear in the USPS' “Preliminary Revenue, Pieces, and Weight by Classes of Mail and Special Services for Postal Quarter 2” study, show that total revenue for the Standard Mail category decreased 1.9 percent — from $3.40 billion to $3.34 billion — between 2001's second quarter and the same quarter in 2002. The Postal Quarter 2 runs from Dec. 1 to Feb. 22. Standard Mail volume decreased 5.0 percent between the two postal quarters — from 19.7 pieces in 2001 to 18.7 pieces in 2002.

Total revenue for First-Class Mail, on the other hand, increased 0.2 percent between the two postal quarters, from $8.70 billion in the 2001 Postal Quarter 2 to $8.71 billion in the same quarter in 2002. First-Class Mail volumes also decreased, but not as severely as the Standard Mail volume decrease. For example, the category saw volumes drop 1.7 percent — from 25.5 billion pieces in 2001's Postal Quarter 2 to 25 pieces in the same quarter in 2002.

The USPS chalks up the Standard Mail numbers to the economy and a bad advertising climate. “The entire advertising market has been in a deep recession, and the ad mail market has followed that,” said Gerry Krienkamp, a USPS spokesman.

Other categories fared even better than Standard Mail and First-Class Mail combined. Package Services, for example, which includes Parcel Post and Bound Printed Matter, saw both its total revenue and volume increase over the two quarters. Revenues, for example, increased 10.1 percent — from $493 million to $542 million. Volume also increased 1.6 percent — from 264 million pieces to 267 million pieces.

One category that fared worse than Standard Mail, First-Class Mail and Package Services combined was Priority Mail. Between the two periods, the category saw total revenues drop 5.3 percent — from $1.33 billion to $1.26 billon. Volume decreased 12.5 percent, from 298 million pieces to 261 million pieces.

Meanwhile, the USPS earlier this month released its financial numbers for the sixth period of the postal service's 13 accounting periods, which ran from Jan. 23 to Feb. 22.

Revenue for the period totaled $30.9 billion — $1.4 billion less than the $32.4 billion that was anticipated — compared to $31.1 billion last year. Expenses dropped by $853.7 million to $31.1 million over an anticipated expenditure of $32 million.

Alan Robinson, president of Direct Communications Group, Silver Spring, MD, a consulting firm that focuses on the postal and parcel market, said the reason for the lower-than-expected numbers this month stem from several causes.

“Revenues are down from plan in Standard Mail, Periodical Mail and Parcel Post from plan, and single-piece volumes are declining faster than plan,” he said. “In addition, the USPS has a substantial amount of processing units that it does not need but it is paying for due to the decline in single-piece and advertising volumes.”

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