USPS posts promising financials but makes no rate promises

In its monthly meeting on Sept. 5-6, the U.S. Postal Service told its Board of Governors (BOG) that it expects revenue to grow 6% in fiscal 2003, to $70.4 billion from $66.5 billion for fiscal 2002. The Postal Service also boasted that it was projecting a $600 million surplus for fiscal ’03, which begins at the end of September. And the agency said its fiscal 2002 net loss would total $1.2 billion, well below earlier estimates of more than $4.0 billion.

Despite all the encouraging news, USPS chief financial officer/executive vice president Dick Strasser tells CATALOG AGE that catalogers shouldn’t count on any kind of delay in the next postal rate increase. Earlier this year, Postmaster General Jack Potter promised there would be no postage increase before 2004. But Strasser says the agency hasn’t “made any commitment further than that.” In fact, Strasser downplays the $600 million projected surplus, which is less than 1% of the USPS’s $70 billion operation. “One might term it virtual breakeven, in fact,” he says, “as opposed to significant net income.” By law, the USPS is supposed to break even.

“I’d hope the Postal Service could be bold enough that given assumptions on the economy and mail volume, they may actually be able to hold off filing for a rate increase to some later date,” counters Association for Postal Commerce president Gene Del Polito.

“Things can certainly change,” Strasser says. “The biggest question is the behavior of volume in the mailing industry. Are we going to see a rebound? If the trend in electronic bill payments accelerates, that’s a concern of ours. We’ll have to see as 2003 unfolds.”

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