The US Postal Service (USPS), the world’s largest postal operator, is being severely hit by thedownturn in the US economy and is starting to save costs by cutting back on working hours. It
already had a loss of more than $1.1 billion over the nine months ending June 30.The USPS said as the current economic climate continues to contribute to a decrease in mailvolume, and with no reversal in the trend in sight, it expects to end the current fiscal year witha volume decline of nine billion pieces. In 2007, USPS delivered 212 billion items of mail andpackages.
At this week’s Board of Governors meeting, Postmaster General John Potter said the magnitudeof the loss in mail requires the Postal Service to take steps now to shore up its business, whichit is doing by reducing work hours. “While we deal with the economic challenges, customers andservice to our customers will always be number one on our agenda, it is why we exist, it is ourfranchise,” said Potter.
In the third quarter ending June 30, USPS slumped to a massive $1.1 billion loss with volumesdown 5.5% due to the slowing US economy. Its operating revenue dropped 2.4% to $17.9 billion whileoperating expenses rose 1% to $19 billion due to substantial increases in fuel prices. This leftthe nine-month loss at $1.13 billion after the Postal Service essentially broke even in the firsthalf of the fiscal year.
The financial results for the year ending September 30, 2008, will be released in November.Last year, USPS made a net loss of $5.1 billion, largely due to heavy special payments to thegovernment for pensions and other costs. It made an operating profit of $1.6 billion on revenues of$74.9 billion.
The board of governors also approved Vision 2013, the Postal Service’s new five-yearstrategic plan. The plan focuses primarily on customers — meeting their needs by creating newvalue through the mail and generating profitable revenue for the Postal Service in an increasinglychallenging environment. The Vision 2013 will be published on October 1.
