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USPS battles financial fallout

Photo/Eric Ayres Despite a drop in revenue related to postal product sales, the U.S. Postal Service has seen an increase in other areas of its service, such as package delivery.

WHEELING — Many “essential businesses” have kept their operations going through the COVID-19 pandemic, but some — like the United States Postal Service — have seen an increase in some areas of its service while enduring a decrease in overall revenues.

As many areas of the country begin to reopen for business this month after being on an economic “pause” in the midst of the pandemic, the increase in commerce will be a welcome sight, officials from the USPS said.

“It’s going to be interesting to see, because what we’re experiencing now is typically what we have around the holidays, and that’s a lot of package deliveries,” Karen Mazurkiewicz, spokeswoman for the USPS, said Friday, when a number of states began easing into the first phases of plans that permit certain businesses to reopen.

“Then on the other hand, we’re seeing there’s a lot of mail that’s not as prevalent, like business correspondence. We anticipate seeing that kind of mail coming back soon.”

As businesses reopen and launch campaigns to get the word out, many turn to the postal service to reach potential customers. Don’t call it “junk mail,” USPS officials stressed.

“When the economy is strong, we handle a lot of business marketing mail,” Mazurkiewicz said. “When things get going, we expect to see a surge in that type of mail service.”

Postmaster General Megan Brennan noted that the USPS provides an essential service to the country, and the service has been particularly essential during this time of crisis. Vital mail and packages like medicine, benefit checks and important community information is delivered all across the country by the U.S. Postal Service, which employs 630,000 workers.

However, the weeks-long shutdown of the national and global economy has had an impact on the USPS, particularly in its primary revenue sources — first-class mail, marketing mail and product sales.

“The postal service relies on the sale of postal products and services to fund our operations, and these sales are plummeting as a result of the pandemic,” Brennan said. “The sudden drop in mail volumes, our most profitable revenue stream, is steep and may never fully recover.”

Brennan said it is estimated the COVID-19 pandemic will increase the USPS’s net operating loss by more than $22 billion over the next 18 months, and possibly more than $54 billion over the long-term, threatening its ability to operate. She said it was imperative that legislators in Washington take action to shore up finances for the U.S. Postal Service to enable it to “play an effective role in the nation’s economic recovery.”

President Donald Trump has argued that the U.S. Postal Service is in need of reform, maintaining that large internet-based businesses like Amazon were taking advantage of the service, resulting in huge losses of revenues on shipping.

Last month, a $10 billion loan was put on the table for the USPS as part of the nation’s $2 trillion economic stimulus package, but the president has said he will not approve it until the agency raises its charges for the big shipping businesses. The postal service is a self-sustaining agency that has faced operational hardships even before the coronavirus pandemic took hold. Although the crisis has further complicated the financial crunch, the president has vowed to make sure the U.S. Postal Service will remain fully operational.

In terms of immediate changes to postal service operations and finances, the price for a first-class postage stamp was increased in January to 55 cents. No further increases are anticipated, as postage rate increases are based on the consumer price index and are generally implemented only once per year in January if they occur at all, Mazurkiewicz explained.

Last week, the USPS announced that its “Hold Mail” service was being extended to the end of this month because of the COVID-19 situation. Many businesses have been closed and have not been receiving mail, officials noted.

The Hold Mail service typically is available for a 30-day time frame only, but because of the pandemic, the postal service is extending the service for businesses and residential customers through May 30. Beyond that date, a two-week grace period will be instituted, and customers will have to contact their local Post Office to make arrangements to have their mail held longer, USPS officials said.

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