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USPS Integrated Financial Plan Offers a Peek into 2019

December 03, 2018

The Postal Service™’s Fiscal Year (FY) 2019 Integrated Financial Plan (IFP) was filed with the Postal Regulatory Commission on November 20, 2018. As anticipated, the USPS® expects continuing financial challenges and loss of volume. The IFP projects a controllable loss of $3.1 billion and a net loss of $6.6 billion. Volume is projected to decrease by 1.8% to 143.7 billion pieces.

Looking back at the IFP for 2018, the Postal Service performed better than planned, which anticipated a $5.2 billion loss and volume at 144.9 billion pieces, but the outlook remains bleak. In its press release announcing FY18 financial results, the Postal Service once again stated there is an “urgent need to advance legislative and regulatory reforms, along with continued aggressive postal management actions to generate new revenue and control costs.”

Following is a recap of volume projections, along with commentary from the IFP:

First-Class Mail®

• The IFP projects a decline of approximately 2.4 billion pieces, or 4.3%, from 2018, reflecting the ongoing migration of communications and transactions out of First-Class Mail into electronic media.
• Bill and statement volumes are expected to continue their pattern of modest diversion, as customers increasingly accept bills and statements electronically, often on their mobile devices, and often in response to incentives by companies for making the switch.
• First-Class Mail single-piece volumes are also expected to decline, continuing a trend that has been evident for a number of years.

Marketing Mail

• USPS Marketing Mail volume is expected to be relatively flat compared to 2018, although competition from electronic media is intensifying. Marketers continue to leverage technology to better target customers, and increase their investment in digital advertising, at the expense of hard-copy media. However, USPS Marketing Mail continues to provide a good value and return on investment. The USPS intends to continue efforts to further improve the value of Marketing Mail by enhancing it with innovations such as Informed Delivery®.
• Periodicals volume is expected to continue to decline as readership continues to migrate to online media.
• Shipping and Packages volume is expected to grow 3.1%, to 6.3 billion pieces in 2019, driven by the strong growth in e-commerce, and growth initiatives, marketing efforts, service, and competitive pricing. Priority Mail®, Parcel Select®, and First-Class Package Service, the three largest Shipping and Packages categories, are all expected to continue to show growth in 2019, driven by consistent, reliable service and price competitiveness. The growth rates for these products in 2019 are expected to decline somewhat due to aggressive competition in the delivery services market.

Please check out this report to learn more. BCC Software will continue to keep you updated on these issues.

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