Alliance Alert — USPS & Coronavirus 5/18/20

May 18, 2020

Dear Members & Sponsors of the Alliance of Nonprofit Mailers:

Hello, everyone!  We hope you are doing well!

As you know the Postal Service has been updating us with its weekly volume changes since the pandemic started having a major impact.  The latest week shows total mail volume down 29 percent, and package volume up 77 percent.

USPS Weekly Volume Changes 2020 (week ending)
Product/Category 10-Apr 17-Apr 24-Apr 1-May 8-May 15-May
Total Mail -32.00% -29.00% -28.00% -27.00% -32.60% -29.00%
Flats -36.50% -36.00% -37.40% -30.10% -23.00% -37.40%
FCM Single-Piece -16.30% -25.00% -16.60% -21.70% -9.00% -14.80%
FCM Presort -2.20% -8.00% -2.00% -3.30% -4.40% -8.40%
Marketing Mail -42.50% -50.00% -43.70% -45.30% -40.00% -38.60%
Periodicals -17.70% -7.00% -38.70% 10.20% 2.60% -42.00%
Total Packages 20.70% 29.00% 50.00% 59.40% 64.00% 77.00%


Current postal management has been saying that the boom in package volume is not enough to offset the loss of mail volume.  Further, they are predicting that the package increase will largely reverse when the crisis subsides, while much of the mail volume loss will be permanent.  The exceedingly pessimistic outlook is very much consistent with the years’ long effort of USPS to receive financial relief from the Congress and the Postal Regulatory Commission.  Perhaps the first external Postmaster General in 24 years, Louis DeJoy, will take a different approach after he takes the helm on June 15.

The departure of Deputy Postmaster General Ron Stroman on June 1 will only be a small bump in the road, as the USPS Board of Governors will be without the required quorum of six until a new DPMG is named by the PMG and the Governors.  (As an aside, no quorum is required for the Governors to set rates and hire and fire PMGs.)  The fact that Stroman was the chief promoter of voting by mail at USPS is really inconsequential to how many states decide and are prepared to do so.  The Postal Service will be prepared to deliver and return all the ballots it is presented with on time for November.  The real questions reside in the states and the suppliers and service providers necessary to print and process ballots.

More important than the weekly volume numbers will be the USPS preliminary financial results for April expected to be filed at the PRC soon.  If they stick to their regular schedule, this week is a possibility.  These results should tell us much more about the net effects on USPS finances of the crisis.

We believe USPS financials will not be nearly as bad as they have been predicting.  We also believe that they have plenty of cash flow and liquidity to operate without a bailout well into next year.  As for cash, on April 30, 2020, the Postal Service Fund had $14,181,000,000 cash versus $9,852,000,000 the prior month.  This is according to page 12 of the U.S. Treasury Monthly Statement of the Public Debt.  On top of the $14.2 billion in cash, USPS also has another $11 billion in borrowing capacity, $1 billion remaining in their usual $15 billion cap plus the additional $10 billion from the CARES Act.  Liquidity of $25 billion will last quite a while.  And that’s not to mention the potential for positive cash flow from the package boom.

The latest COVID-19 relief bill passed by the House contains a $25 billion bailout of USPS, far short of the $89 billion package they asked for, but likely far more than the Republican-controlled Senate is willing to pass.  We believe more transparency about the true net impact on USPS, as well as some much-needed reforms, are needed to justify any cash grant to the Postal Service.

We will keep you posted.

Best, Steve

Stephen Kearney

executive director

Alliance of Nonprofit Mailers

1211 Connecticut Ave, NW, Suite 610

Washington, DC 20036

Tel: 202-462-5132


Independent voice of nonprofit mailers for 40+ years.

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