US Postal Service's Volume & income plunge

The terrorist attacks and the slipping economy combined to cause the biggest drop in mail volume in more than 30 years, the Postal Service reported yesterday. The bleak news came amid negotiations between the Postal Service and major mailers on an agreement that would allow the agency to raise rates June 30, three months sooner than planned. In the first quarter of its fiscal year — Sept. 8 to Nov. 30 — mail volume was 2.8 billion items below the same period last year, said Richard J. Strasser Jr., postal chief financial officer. That was the biggest drop-off since the current Postal Service was established more than 30 years ago, Strasser said. It was led by advertising mail, which was down 2.2 billion items, costing the agency millions of dollars. The proposed rate increase would boost the price of a first-class stamp 3 cents to 37 cents and raise other rates, bringing an added flow of cash to an agency that lost $1.68 billion last year and faces billions in expenses for protecting the mail from biological contamination. The busy pre-Christmas mailing period is normally a moneymaker for the Postal Service, helping offset losses from slower times of the year. The reduced mail volume from September through November resulted in net income of $108 million for the three months, $521 million less than had been expected. Strasser said the Postal Service cut expenses for the three-month period to $15.3 billion, $355 million less than originally planned. He said the Postal Service has reduced its staff by 16,300 full-time employees during the past 15 months and continues to make reductions. Strasser’s report covers September through November. Final figures for December were not available, but preliminary reports indicate the agency is about $552 million in the red this fiscal year. “We will continue to trim costs; it cannot be business as usual,” Postmaster General John E. Potter said.
Washington Post