February 6, 2025

Issue 25/01

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Copyright 2025: Alliance of Nonprofit Mailers—All rights reserved.

The Alliance of Nonprofit Mailers is a 501 (c)(4) nonprofit organization established by nonprofits for nonprofits.

USPS reduces its loss by $421 million in the first quarter of 2025, thanks to the election

Removing the non-cash workers’ compensation adjustment (NCWC), USPS lost $482 million in the first quarter when it enjoyed a big boost in election and political mail. That’s better than the same quarter last year but still a long way to go to sustainability.

As we have explained before, we believe that removing the NCWC adjustment from net income as reported by generally accepted accounting principles (GAAP) is the right way to look at USPS income. That’s because this adjustment is made randomly and driven by changes in interest rates.

The first fiscal quarter is always the strongest revenue quarter for the Postal Service as it includes the peak season. This time it also included national elections that generated record spending on political mail and other forms of communications.

Using NI-NCWC, USPS lost $7.4 billion in each of FY 2023 and FY 2024. The agency’s official plan is to lose $6.9 billion in FY 2025.

In the first quarter, First-Class Mail volume dropped by 464 million pieces, or 3.9%, compared to the same quarter last year. Its revenue increased by $284 million, or 4.2% as a result of large rate hikes.

Marketing Mail volume grew by 1.093 billion pieces, or 7%, largely due to political advertising in the national election year. Marketing Mail revenue increased by $450 million, or 10.9%.

Periodicals volume fell by 48 million, or 6.6%. Revenue from “the anchor in the mailbox” grew by $4 million, or 1.7%.

The volume of packages delivered by USPS declined by 19 million, or 0.9%. Package revenue increased by $272 million, or 3%.

The only positive standout here was Marketing Mail driven by the election.

The Postmaster General is very angry that the regulator questioned his plan

The scripted, robotic 40-minute USPS Board of Governors meeting on February 6 was interrupted by a very emotional Postmaster General’s report. He was very upset that the Postal Regulatory Commission dared to criticize his plan to slow down rural U.S. mail even further.

The latest iteration of the Delivering for America plan is called Regional Transpiration Optimization (RTO). The proposal that the Postal Service Sent to the PRC for an Advisory Opinion attempts to optimize transportation by eliminating thousands of truck trips that the USPS has regularly made every evening to pick up outbound mail from every post office in the land. The Postal Service hopes to save in the range of $3.6 billion or so by curtailing the mail pickups at every post office unlucky enough to reduce more than 50 miles from the new DFA mega-centers.

As we have reported, the PRC lambasted the RTO last Friday by pointing out that the savings are very speculative and when weighed against severe diminution in rural service might yield paltry savings amounting to about 4% of total costs.

The PMG gave every indication that he would blast full speed ahead with his initiative. He said that the Advisory Opinion amounted to the regulator saying “We are smart and you are dumb.” He said that unlike himself and his team, the Commissioners have no experience or responsibilities in operations or logistics. By expressing findings counter to his plan in their 300-page opinion, the Commissioners “continue to fiddle while Rome burns.” Indeed, he said that to date the actions of the PRC have led to “our near destruction.” The PMG finished by remarking that RTO “needs to happen quickly” and it will yield “net positive results for mailers.”

The Alliance welcomes HH Global as its newest Gold Sponsor

The Board of Directors of the Alliance of Nonprofit Mailers is very happy to welcome HH Global as our new Gold Sponsor! We appreciate their support!

HH Global describes itself:

We are the global leader in tech-enabled creative production and procurement. We amplify your marketing campaigns through unrivaled production, procurement leadership, and the most advanced sustainability capabilities available. All are delivered at scale through industry-leading technology and the passionate expertise of our people.

Nonprofits can learn about the great services that some of our members benefit from by contacting HH Global:

(571) 243-1237
203 N. LaSalle
Chicago, IL 60601
www.hhglobal.com

Former Postmaster General Megan Brennen took office on February 1, 2015

Here are Alliance Executive Director Stephen Kearney and Board Vice President Jerry Mathis with PMG Megan Brennen at the Smithsonian National Postal Museum on September 16, 2016, for the launch of the “America’s Mailing Industry” online exhibit. The exhibit includes a robust nonprofit mailer segment and an introductory video by Marlo Thomas. It was spearheaded by Karen McCormick, a longtime friend of the Alliance and now Executive Director of the National Postal Forum.