Cost cuts help USPS end year in black
The U.S. Postal Service said deep cost cuts helped it finish $300 million in the black in 2003 despite a record decline in first-class mail volume. The net increase for the fiscal year that ended Sept. 30 contrasted sharply with last year’s loss of $676 million, triggered by the largest-ever slide in overall mail volume.
The USPS will seek an $884 million federal appropriation for the fiscal year beginning next October, nearly all of it to help pay for ongoing automation upgrades to the mail processing system to guard against bioterror and other threats. Those changes were ordered after the deadly anthrax attacks in 2001.
According to financial figures released Tuesday by the service’s board of governors, first-class mail volume fell by a record 3.3 billion pieces in the last fiscal year. But the decline was nearly offset by growth in less lucrative packages and certain advertising mail, leaving a net loss of 600 million pieces, or less than 1 percent of total volume.
E-mail, on-line services, fax machines and competition from private delivery services have put tremendous pressure on first-class mail revenue, which includes business correspondence and ordinary letters – the linchpin of the postal service network.
A presidential commission recommended earlier this year that the postal service consider slashing some operations, including post offices that lose money. The board is reviewing those suggestions, while executives continue to focus on core businesses and explore ways to cut costs.
For instance, the postal service slashed $2 billion in expenses in fiscal 2003 and found additional productivity gains to offset a $1.7 billion shortfall in revenue and exceed its financial forecast for the year.
The service also reduced its debt by $3.8 billion to $7.3 billion. Congress ordered the postal service to cut its debt earlier this year.
