The post office reported fiscal fourth-quarter numbers Thursday. The full year reported loss is enormous at $8.8 billion. But that’s only part of the story. Operating metrics were actually pretty good. And free cash flow was positive.
First the top-line: Postal sales grew slightly to $71.1 billion. That’s quite an achievement since first class mail volumes shrank another 3.1%. Package sales grew $1.3 billon, or 6.1%, on a 0.2% volume increase and a 5.9% increase in pricing. Price for parcels at the post office is always a useful read through for FedEx (ticker: FDX) and United Parcel Service (UPS).
The U.S. Postal Service intends to raise prices in its parcel shipping business by about 3% starting Jan. 26, 2020. The rate of change—while not reported directly—appears a little slower than 2018, but higher prices at the post office still help parcel competitors raise pricing.