US Postal Service in the black for half of fiscal year
The Postal Service finished the first half of its fiscal year _ its highest revenue period _ $1.65 billion in the black, the agency reported Tuesday.
Chief Financial Officer Richard Strasser reported that while mail volume is still down because of the uncertain economy, the Postal Service has been able to cut costs and increase productivity.
For the fiscal year that started in September, revenue so far is $32.8 billion and expenses have totaled $31.1 billion, leaving a net income of $1.65 billion, Strasser told the agency’s board of governors. For the first half of last fiscal year, the post office had revenues of $31.0 billion and expenses of $31.2 billion for a net loss of $195 million.
However, he pointed out that the Postal Service makes most of its revenue in the first two fiscal quarters and expects losses over the summer months as seasonal mail volume declines.
“The net income is the result of productivity improvements, expense reductions and the rate increase, not volume growth,” he said.
“The expense reduction during the quarter was extraordinary,” Strasser said, “and it came despite absorbing rising fuel costs, the impact from the severe snowstorms in the East this winter and inflation in health benefits that will exceed $500 million for the year.”
Strasser said the agency was able to significantly cut work hours and so far this year the work force has been reduced by 11,485, mainly through attrition.
Despite a rate increase last summer the Postal Service finished last year with a $676 million loss, far less than the many billions it feared it would lose because of the lagging economy and the anthrax attacks.
Last fall it was discovered that the agency has been overpaying into a retirement account and officials are waiting for action by Congress to allow them to reduce those payments. If that occurs, postal officials have said they could avoid any more rate increases until 2006. Without the change they said rates are likely to go up next year.
In other news the Postal Service reported that it had set a record for on-time delivery of first class mail.
Francia G. Smith, vice president and consumer advocate, told the board of governors that overnight first class mail achieved 95 percent on-time delivery during the period between Nov. 30, 2002 and Feb. 21, 2003. The agency’s performance is measured independently by IBM’s Business Consulting Services. The tests are done in 463 ZIP codes and thus the record is not a systemwide measurement of performance.
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On the net:
U.S. Postal Service: http://www.usps.com
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