U.S. Postal Service
Board of Governors (BOG) chairman Robert Rider said at the BOG’s monthly meeting that a settlement agreement, which would lead to a 7.3% average postage rate hike for catalogers effective June 30, “looks promising.” A majority of mailers groups involved with the postal rate case have signed on to the idea. The agreement could become official by the end of this month.
Mail volume for the USPS’s first quarter, Sept. 8-Nov. 30, dropped by 2.8 billion pieces from the comparable quarter of fiscal 2001. Standard bulk mail accounted for 2.2 billion pieces of the decline—the largest drop in volume since the USPS was reorganized in 1970. The resulting revenue shortfall coupled with the cost of sanitizing the mail in light of the recent anthrax attacks would have forced the USPS to refile its rate case with a request for considerably greater rate hikes. Instead, as suggested by Postal Rate Commission chairman George Omas in October, the agency sought to instead have its original rate increase approved without the usual 10-month-long schedule of hearings and implemented about three months sooner than originally anticipated.
Also at the January monthly meeting, USPS chief financial officer/executive vice president Richard Strasser said that the agency’s first-quarter net income of $108 million was a whopping $521 million under plan. On the other hand, the USPS’s expenses for the quarter, at $15.3 billion, were $355 million under plan. The Postal Service realized the savings largely by cutting 17.8 million work-hour compared with the same period of last year. Combined with the cumulative reduction of 23.1 million work-hours for its fiscal 2001, the USPS has cut 16,300 full-time career employees from its operating expenses since fiscal 2000, while adding more than 3 million deliveries overall.