US Post Office Continues to Cut Costs
The Postal Service is continuing its program of cost-cutting and is searching for new products to offer, Postmaster General John Potter said Friday.
Potter said his agency is considering consolidating some of the approximately 300 mail processing centers across the country because improved efficiency and lower mail volume means some are underused.
“There will be no layoffs,” Potter said, telling the Senate Governmental Affairs subcommittee on federal services that cuts will be made through attrition or transfer to other facilities.
Nationwide the post office cut its staff by 23,000 this year and instituted other savings to reduce a looming deficit.
The loss is now below $1 billion for the year, Potter said, renewing his promise that postal rates won’t go up again until 2004.
The post office entered the fiscal year anticipating a loss of $1.35 billion and at times, after the terrorist attacks and the anthrax-by-mail episode, officials feared losses would climb to $4 billion.
Also, the faltering economy complicated things for the agency, sending mail volume down by 6 billion pieces, the biggest drop in history, Potter said.
Volume is starting to climb again, and the post office expects that a modest increase next year will help boost the agency into the black, allowing it to begin reducing accumulated debt.
Potter said the rate increases that took effect in June put an extra $1 billion into the agency’s coffers and is expected to boost revenue by $5 billion next year.
But the post office also is expected to face growing costs including an anticipated $799 million for equipment to prevent another bioterror attack through the mail.
Asked where that money will come from, Potter said the agency would prefer a Congressional appropriation. The post office received $750 million this year for work to block bioterrorism but does not receive a tax subsidy for normal operations.
At the same time, Potter said his agency is working on developing new services such as the recently begun Confirm.
That allows a customer, such as a major company, to put a bar code on its mailings that can be read by postal processing machines, allowing movement of the mail to be tracked.
On catalogs, for example, a mailer could know what day they are being delivered in a particular community and launch targeted advertising there.
Or, Potter said, the code could go on a reply envelope so a company could see if a customer had mailed a payment before it sent a second bill reminder.
In other comments in his annual report to the Senate, Potter said:
–The post office is reviewing its transportation network to see if efficiency can be improved.
–Legislation is needed to simplify the way the agency works, and an independent commission to make suggestions would be a good idea.
–Officials are working as quickly as they can to clean and reopen anthrax-contaminated facilities in Washington and Trenton, N.J., but they need to take all precautions to make sure the work is done right.
