US Postal Service Loses $384 Million

Postal Service has a 9.3% drop in mail volume in its first fiscal quarter, October-December 2008. Preliminary results for the US Postal Service (USPS) indicate operating revenues of $19.1 billion for the quarter year over year, a decrease of $1.3 billion. There were 5.2 billion fewer pieces of mail handled. For example, First Class Mail volume was off by 1.8 billion pieces and Standard Mail by 3.0 billion pieces.

With retail sales, employment and investment spending projected to continue their downward spiral, the USPS is projecting volumes to be down between 12-15 billion pieces for the year. Such a decline could mean a net loss greater than 2008's drop of $2.8 billion.

In discussing these losses, Postmaster General John Potter, said, “We are taking bold steps to cut costs immediately. At the same time, we are examining, realigning and streamlining our business to address longer-term financial pressures while continuing to provide high levels of service to the America public.”

Among the steps being undertaken by the USPS is the reduction of 100 million work hours. Some 27 million work hours were already reduced during the fiscal first quarter. It will also consolidate excess capacity in the processing of mail and transportation networks while maintaining service levels. The USPS will continue to offer new products and offer price and volume incentives.

During the first fiscal quarter, the USPS reported customer satisfaction results using a new national standards rating process. For almost two decades the Postal Service has outsourced the measuring of First Class Mail service performance. Its new rating system is more stringent, and as it explains, “includes more than 850, three-digit ZIP Codes and, for the first time, includes delivery tests and standards for International mail and the classification of mail that large, commercial mailers routinely use.” Most recent scores showed that 96% of First Class Mail reached customers on time. Overall 93% of customers gave the USPS the highest satisfaction marks.

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