USPS Express and Priority Mail Volume Losses Continue
The USPS released F2Q:04 (quarter ending March) results this week. Y-o-y volume losses within Priority Mail, Express, and Parcel Post continued, off 2.5%, 3.1%, and 6.5%.
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USPS’s Mail Volume Up, Revenue Up, Expenses Down
According to the United States Postal Service’s year-to-date (YTD) fiscal data (Oct. 1, 2003, through Mar. 31, 2004), YTD revenue of USD 35.5 billion was 1.4% over budget, and expenses of USD32.9 billion were 1.7% under budget plan. The YTD net income of USD2.5 billion was USD1.0 billion more than budget. Meanwhile, total mail volume was up 1.1% in the first six months of fiscal 2004.
Read MoreHouse panel approves US Postal Service reform
A House committee on Wednesday approved what would be the first overhaul of the US Postal Service in 34 years, giving it the flexibility it needs to compete against new technology and aggressive rivals. The legislation, 10 years in the making, is aimed at making the USPS more competitive in a new business environment where e-mail has reduced mail volume and private companies have taken away business. The 40-0 vote for the legislation indicated strong bipartisan backing. Republican leadership has pledged to bring the bill to the House floor this session. In the Senate, the Governmental Affairs Committee is set to consider similar legislation. Under the bill, the Postal Service would continue to guarantee delivery six days a week to every address in the United States. A new system for establishing postal rates would be established. Rate increases for market-dominant products such as letters and periodicals would not exceed the annual change in the Consumer Price Index. The Postal Service is provided with different pricing freedom for products that compete with FedEx Corp. and United Parcel Service.
Read MoreOld Arguments for State-Run US Postal Service No Longer Apply
A survey of economists specializing in postal services has found that they recommend that the government-supported United States Postal Service (USPS) be de-monopolized or privatized.
The U.S. government first got involved with the postal services as a way to support the growth of democracy. The more modern defense is cross-subsidization, where the profits in one region can offset losses incurred on less populous routes — ensuring universal service to rural areas. Another defense is that there are economies of scale, with lower average costs, due to the size of the postal service and amount of mail. However, the study concludes that neither of these justifications are valid.
Read MoreRR Donnelley Lauds Congressional Leaders on Taking Action to Keep US Postal Rates Low for Commercial Customers
Mark A. Angelson, Chief Executive Officer of R.R. Donnelley & Sons Company today lauded congressional leaders for bipartisan passage out of the U.S. House Committee on Government Reform of congressional legislation that would reform the U.S. Postal Service (USPS) and ensure steady and more predictable postal rates. Postal reform legislation is expected to be introduced in the Senate shortly. “Chairman Tom Davis, John McHugh, and Ranking Members Henry Waxman and especially Danny Davis deserve substantial credit for passing postal reform legislation through the House Committee,” said Mr. Angelson. “Legislation that keeps postal rates steady and predictable is vital to every RR Donnelley customer. Every single day, our employees and our customers see, feel and experience the economic consequences of a postal service in need of reform.”
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