US Postal Service sets record for on-time delivery
The Postal Service continued its drive for excellence
by raising the national average for on-time delivery of
First-Class Mail with a next-day delivery standard to an
unprecedented 95 percent. It achieved this score during Quarter
II (Nov. 30, 2002 through Feb.17, 2003) while delivering to a
record 140 million addresses during one of the worst winters in
recent memory. The record breaking achievements were reported at
the monthly meeting of the Postal Board of Governors here.
This now extends the national average of at least 93 percent to
five-and-a-half consecutive years.
Productivity, expense reductions offset weak revenue growth in
Quarter II
Chief Financial Officer and Executive Vice President Richard
Strasser reported to the Board that mail volume still had not
rebounded in Quarter II, due to the uncertain economy. Through
productivity gains and expense reductions, Strasser said, Postal
Service expenses for the quarter were $559 million below plan, $36
million below last year.
Net income was $645 million for the quarter, $285 million over
plan. Year-to-date revenues totaled $32.8 billion with expenses of
$31.1 billion, leaving a net income of $1.65 billion.
Strasser noted that the Postal Service makes most of its revenue
in the first two fiscal quarters, with 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."
A significant driver of the expense reductions came from reducing
workhours. "Our plan called for a reduction of 40 million
workhours this fiscal year," Strasser said. "We've already reduced
workhours by 31 million as of Quarter II. Career complement has
been reduced by 11, 485 through the second quarter. These actions
will result in a fourth straight year of substantial productivity
increases." "However," Strasser cautioned, "this good news is
tempered by weak volume trends. Mail volume for Quarter II was
essentially flat, with the increases in advertising mail and
packages unable to offset the decline in First-Class Mail and
other mail." Strasser said the outlook is not favorable to make
volume or revenue targets for Quarter III, given the state of the
economy.
In other activity, the Board approved funding for a portion of
renovations necessary as part of the pending sale and transition
of the James A. Farley Building to the Pennsylvania Station
Redevelopment Corporation.
The Board also approved funding to design and develop 2,500 self
service kiosks that will enable customers to conduct postal
business just as ATMs enable customers to conduct self-service
banking. Evaluation of 30 units will begin in October.
Nationwide deployment will begin in mid-winter and is expected to
be completed by summer 2004.
Since 1775, the U.S. Postal Service has connected friends,
families, neighbors and businesses by mail. It is an independent
federal agency that makes deliveries to about 140 million
addresses every day and is the only service provider to deliver to
every address in the nation. The Postal Service receives no
taxpayer dollars for routine operations, but derives its operating
revenues solely from the sale of postage, products and services.
With annual revenues of more than $67 billion, it is the world's
leading provider of mail and delivery services, offering some of
the most affordable postage rates in the world. The U.S. Postal
Service delivers more than 43 percent of the world's mail volume –
some 203 billion letters, advertisements, periodicals and packages
a year – and serves seven million customers each day at its 38,000
retail locations nationwide.
