US Postal Service Projects $1.5 Billion Year-End Deficit
Postmaster General John E. Potter today said the Postal Service faces a projected net loss of approximately $1.5 billion in fiscal year 2002, with mail volume for the year expected to drop some six billion pieces below last year’s total. Despite the magnitude of this decline, Potter said cost-containment actions taken by the Postal Service have reduced this estimated net loss well below earlier projections that ranged as high as $4.5 billion.
Controlling costs is the most important customer-focused strategy of the Transformation Plan, according to Potter, and measures taken to minimize the loss include reducing the number of career employees by 20,000 this year through attrition, and that 60 million work hours will be cut compared to last year. A number of program expenditures also have been postponed, resulting in more than $2 billion in reduced expenses.
But growing the business and streamlining processes to improve customer service are just as important to the long-term viability of the Postal Service. As a result, Potter announced that a historic Ratemaking Summit will be held May 28 in Potomac, MD.
Transformation Plan — Ratemaking Summit
Jointly sponsored by the U.S. Postal Service and the independent Postal Rate Commission, the summit will focus on how the process and approach for establishing and changing postal rates in major “omnibus” cases can be improved.
The summit, which is open to all interested persons, will be held from 9 a.m. to 4:30 p.m. on May 28 at the Center for Leadership Development (Bolger Academy), 9600 Newbridge Drive, Potomac, MD. Pre-registration is required and is available online at the Postal Rate Commission website (http://www.prc.gov). The registration deadline is 5 p.m. (EDT) on May 10, 2002. Interested parties also are invited to submit ideas for what should be discussed at the summit along with their registration.
The Postal Service delivered its Transformation Plan to Congress and the Government Accounting Office on April 4, 2002. The Transformation Plan is a detailed document outlining strategies that would preserve universal mail delivery and strengthen the mail system in the future. Among the proposals included in the plan is a new operating model called the Commercial Government Enterprise (CGE) that would allow the Postal Service greater operational and financial flexibility.
In other Board action:
PostalOne!
The Board of Governors approved funding for Phase Two of PostalOne! implementation. PostalOne!, a major postal initiative to modernize the business mail acceptance process, simplifies the verification and payment process for bulk business mail by providing business customers with an electronic link to internal postal operations for the exchange of mailing information. The capital investment for Phase Two is $54.1 million. PostalOne! has been successfully tested with 71 of the largest postal customer sites nationwide. Phase Two will replace the aging PERMIT system with enhanced payment capabilities and deploy nationally to all business mailers.
Advanced Computing Environment
Charles E. Bravo, chief technology officer, reported that the Postal Service is continuing to upgrade and modernize its intranet infrastructure through its Advanced Computing Environment (ACE) initiative. The initiative will save up to $200 million over five years by centralizing and reducing support functions for 130,000 computer users among some 28,000 postal facilities nationwide.
