Tag: USA

Despite cost-cutting measures, the U.S. Postal Service ended the second quarter with a net loss of USD 707 million, driven by a continued decline in mail volume resulting from the current national economic climate. Meanwhile, the on-time delivery of First-Class Mail continued at record levels in the second quarter.

The second quarter results were presented during today’s meeting of the Postal Service Board of Governors. For the first six months of the fiscal year, the Postal Service has essentially broken even, reporting a net loss of USD 35 million on revenue of USD 39.3 billion.

Mail volume for the quarter ending March 31 totaled 51.3 billion pieces, a 3.3 percent drop from the previous second quarter. First-Class Mail volume decreased by 3.1 percent and Standard Mail volume was down 3 percent.

Year-to-date total mail volume is down by 3.1 percent compared to the same period last year. If the trend continues, this will be only the seventh year total mail volume has decreased in the last 50 years and could be the largest decline since 2002.

Revenue was USD 18.9 billion in the second quarter, an increase of USD 584 million, or 3.2 percent, over the same period last year reflecting last year’s price adjustments, but well below expectations. Expenses in the second quarter totaled USD 19.6 billion, an increase of USD 52 million, or 0.3 percent, from the previous year. The slight increase was driven by an increase in transportation expenses, particularly fuel costs.

The Postal Service also continues to focus on reducing costs and increasing efficiency. For example, workhours have been reduced by more than 18 million in the first two quarters of the year compared to similar periods in 2007.

On Monday 12th May, the forever stamp will go up a penny to 42 cents, as will the cost of sending a first-class letter.

So customers are flocking to post offices across the country to buy forever stamps at the going rate of 41 cents.

Forever stamps allow customers to lock in their postage rate regardless of how much a stamp costs in the future.

Nationwide, more than 60 million forever stamps are being sold daily, up from 30 million a day just a few weeks ago, the U.S. Postal Service said.

Postage rates last went up in May 2007, with a first-class stamp jumping 2 cents to the current 41-cent rate.

the past, raising postage rates was a complex process involving hearings before the independent Postal Regulatory Commission, a process that could take nearly a year.

But under the new law regulating the post office that took effect in late 2006, the agency can increase rates with 45-days notice as long as changes are within the rate of inflation for the previous 12 months. The Postal Regulatory Commission calculated that at 2.9 percent through January. That limited the first-class rate to an increase of just over a penny.

Under the new law, postal prices will be adjusted each May, the Postal Service said. Officials said they plan to give 90 days notice of future changes, twice what is required by law.

While the charge for the first ounce of a first-class letter rises to 42 cents, the price of each added ounce will remain 17 cents, so a two-ounce letter will go up a penny to 59 cents.

Sales of forever stamps are expected to increase throughout the week. More than 6 billion forever stamps have been sold since they were first offered in April 2007.

Financial review: Board of Governors’ Open Session