The US Postal Service today reported it achieved a surplus for a second consecutive fiscal year, but the news was tempered by comments that marketplace forces are changing the character of the mail and could threaten postal financial viability in future years.
For the fiscal year that ended September 30, 2004, the Postal Service said it had net income of $3.1 billion on revenues of $69 billion.
"We achieved our business goals in 2004 to improve service, reduce costs, and continue to build our business," Postmaster General John E. Potter said at the Postal Service's Board of Governors year-end meeting, according to a USPS press release.
Expenses were $900 million better than forecast and debt was reduced to $1.8 billion, down from a high of $11 billion two years ago, the USPS says.
"These results underscore our promise to the American people to keep rates stable until 2006," Potter said.
In his presentation to the Board, Chief Financial Officer Richard J. Strasser, Jr., said total revenue reached $69 billion, an increase of $265 million over last year, the USPS says. First-class mail brought in revenue of $36.4 billion; standard mail $18.1 billion; and other products and services $14.5 billion.
Total mail volume rose nearly 4 billion pieces to 206 billion, mostly in standard mail. First-class mail declined by 1.1 billion pieces, for a third straight year of decline, the USPS says.
The number of nationwide delivery addresses continued to grow, rising 1.8 million to 142.3 million; expenses totaled $65.9 billion including $52 billion for personnel, $5 billion for transportation, and $9 billion for supplies, services, depreciation, and other costs, the USPS says.
Strasser also cited other significant operating achievements by the Postal Service this year. "For the fifth consecutive year, we have increased productivity. Further, we reduced work hours by 21 million."
Strasser said: "Despite this success, for the first time in history, in 2005 first-class mail is projected to fall below standard mail as the largest volume product. This shift in mail mix to lower revenue-per-piece mail classes will result in shrinking margins which are used to maintain universal service." Standard mail competes for advertising expenditures and is more susceptible to volatility of business cycles, noted Strasser.
For the complete USPS press release, click to http://www.usps.com/communications/news/press/2004/pr04_088.htm
