United States Postal Service has $3.9bn surplus

The Postal Service reported a $3.9 billion surplus for 2003 despite declining mail volume, and officials renewed their pledge to keep rates steady until 2006.

The agency had suffered losses the previous two years as mail volume dwindled in the wake of the terror attacks, the anthrax scare and the weak economy. That led to a rate increase last year to the current 37 cents for first-class mail.

The post office was $676 million in the red last year and lost $1.7 billion the year before.

Postal chief financial officer Richard J. Strasser said the positive 2003 results were achieved despite a decline in mail volume of 600 million pieces. Particularly troubling was a drop of 3.3 billion pieces of first-class mail, the agency’s largest moneymaker.

The post office’s financial plan predicts a surplus of $2.1 billion in 2004 and to break even in 2005, depending on the performance of the economy, Strasser said. Signs of recovery have appeared in the economy, he noted, but growth in mail volume usually trails other indicators.

Under the complex process currently required, if the agency is to raise rates in 2006 it will have to begin the process late next year or early in 2005.