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USPS Reports 3rd Quarter Loss of $166 Million, Mail Volume Down

Wednesday, June 06, 2001

Press release from the issuing company

Washington, DC - Reflecting the overall weakness in the national economy, postal revenues in Quarter III continued to run below forecasts made at the beginning of the fiscal year, according to postal officials. In his report at the monthly meeting of the U.S. Postal Service Board of Governors here today, Chief Financial Officer Richard J. Strasser reported that the agency experienced a net loss of $166 million in Quarter III - $312 million worse than plan. Revenues increased 3.5 percent over the same period last year, but were $603 million - or 3.7 percent - below plan. Expenses, on the other hand, were $291 million dollars less than budgeted. For the year to date, Postal Service revenues total $46.7 billion and expenses total $47.1 billion for an overall net loss of $422 million. Overall growth in total mail volume continued to decline from 3.3 percent in Quarter I and 0.8 percent in Quarter II to near zero percent in Quarter III. "As we look toward year's end, the July 1 modified rates for certain classes of mail will increase revenues some $200 million," said Strasser, adding that postal management plans to intensify its aggressive cost control programs. These initiatives include reduced work hours, a headquarter's hiring freeze, continuation of the capital spending freeze, and program budget reductions. According to Strasser, Total Factor Productivity (TFP) improved by 2.0 percent for the year to date. Over the past two years, the number of career employees has been reduced by 21,000. Strasser said continuing weak business growth through the end of this fiscal year could mean a total year-end loss in the range of $1.6 billion to $2.4 billion. Capital Investments The Board also voted to approve $15 million in funding to implement the Surface-Air Support System (SASS) - a key component of the Postal Service's information platform. This new link to the information platform - which will make operations more efficient - will enable the Postal Service to measure performance and verify accurate payments for all modes of transportation, including air, highway, and rail. Testing will be completed in July and activated in August. The Board also granted approval to purchase a 325,000 square-foot building on a 15.3-acre site in Teterboro, NJ, to be used as the Northern New Jersey Metro Processing and Distribution Center (P&DC). The building will resolve severe space deficiencies at two mail processing centers: The Hackensack, NJ, P&DC and its Huyler Street annex; and the Paterson, NJ, P&DC which is supported by the Totowa Annex.




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