U.S. Postal Service chief warns of inflation impact
Send a link to a friend
[April 23, 2022] By
David Shepardson
WASHINGTON (Reuters) - U.S. Postmaster
General Louis DeJoy says the agency is dealing with significant
inflation costs as it works to stem losses, acknowledging higher costs
will put further pressure on stamp prices.
DeJoy told Reuters in a 90-minute interview late on Wednesday the U.S.
Postal Service (USPS) is feeling the impact of higher costs as it works
on its plan to eliminate $160 billion in projected red ink over 10
years.
"Inflation is significantly higher than we forecasted in the plan. I
think we're going to incur $1.8 billion more this year in unplanned
inflation," DeJoy said.
In the year ending Sept. 30, USPS reported a net loss of $4.9 billion on
revenue of $77.1 billion and $82 billion in expenses. USPS is expected
to offer more details on the inflation impacts when it reports financial
results on May 5.
![](http://archives.lincolndailynews.com/2022/Apr/23/images/ads/current/charrons_bch_2022.png)
Earlier this month, USPS filed notice with the Postal Regulatory
Commission to raise prices of first-class mail stamps from 58 cents to
60 cents and raise overall First-Class Mail prices approximately 6.5% -
after hiking stamps by 3 cents in August.
USPS noted the price hike was below the 8.5% annual inflation rate.
DeJoy, who cited issues like transportation and labor costs, was blunt
about the anticipated impact of inflation and the need to keep hiking
prices.
[to top of second column] |
![](../images/042322pics/busine7.jpg)
A U.S. Postal Service (USPS) logo is pictured on a mail box in the
Manhattan borough of New York City, New York, U.S., August 21, 2020.
REUTERS/Carlo Allegri
![](http://archives.lincolndailynews.com/2019/Sep/05/images/ads/current/stclara_lda_SPONSOR_090519.png)
"I am pretty frank about it - we're raising prices. Whether I run out of cash
tomorrow or three years from now I've still got a plan that's running out of
cash with a 650,000-person organization," DeJoy said.
USPS won about $50 billion in financial relief from Congress under legislation
signed by President Joe Biden this month. DeJoy says he still needs to eliminate
about $35 billion to $40 billion in costs and raise revenue by about $25 billion
over a decade to meet financial targets.
"The ball's in our court now - we've got a lot of work to do," DeJoy said.
Struggling with diminishing mail volumes despite having to deliver to a growing
number of addresses, USPS has reported net losses of more than $90 billion since
2007. In February, it booked a quarterly net loss of $1.5 billion.
(Reporting by David Shepardson in Washington; Editing by Matthew Lewis)
[© 2022 Thomson Reuters. All rights
reserved.]This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |