The U.S. Postal Service didn’t celebrate its rare $307 million first-quarter profit in February, after Postmaster General Megan Brennan warned of strong “headwinds” that were projected to undo the agency’s optimism for the rest of the fiscal year.
On April 10, the Postal Regulatory Commission mandated that USPS reduce its postal rates for the first time in more than 100 years, a move that could cost the organization more than $2 billion in annual revenue.
The PRC allowed for the temporary increase in January 2014, in order for USPS to recoup losses sustained during the 2008 national recession. Following the change, the standard postal rate for letters is now 47 cents per ounce, down from 49 cents.
“Given our precarious financial condition and ongoing business needs, the price reduction required by the PRC exacerbates our losses,” said Brennan said in a statement ahead of the postal rate change.