The Institute for Policy Studies (IPS) released a new policy brief, examining the changes in postal revenue as a result of the increase in packages during the COVID-19 crisis. The report, authored by Sarah Anderson, director of IPS’s Global Economy Project, IPS Associate Fellow Scott Klinger, and IPS Research Analyst Brian Wakamo, is clear: the Postal Service needs emergency financial assistance to continue providing services to the people of the country during the crisis and beyond.
During the pandemic, package revenue for the USPS has risen considerably. The report cites that revenue from shipping and package services rose by 38 percent in April and 57.6 percent in May, compared to the same months in 2019. However, at the same time, revenue from first-class mail – the Postal Service’s most profitable product – has plummeted.
Compared with the same months in 2019, revenue from first-class mail dropped by 8.1 percent in April and 12 percent in May. The report states that the temporary boom in package revenue will not be nearly enough to cover the losses in first-class mail revenue, especially as “the recession rages on while extended unemployment benefits are about to expire and Americans are spending more of their limited shopping dollars at re-opened brick and mortar stores.”
If package revenue returns to pre-pandemic levels, “USPS estimates it will see $17 billion in pandemic-related losses during the 2020-2021 period and $50 billion over the next decade. If package volume remains at 15 percent above pre-coronavirus levels, the pandemic-related loss is expected to be $7 billion for 2020-21 and $17.3 billion over the next decade.”
As a public service connecting the nation in the midst of an unprecedented public health and economic crisis, the Postal Service must receive emergency COVID-related financial support in order to continue providing services.