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Postmaster General Says Summer Rate Case Not Yet Certain

Press release from the issuing company

4/2/01 - Speaking last week at the Postal Forum in Orlando, Postmaster General William Henderson explained that the Postal Service's is being buffeted by increasing costs and stagnant volumes, but he said that another rate increase request this summer is not a "given just yet." He added that he's asked Deputy Postmaster General John Nolan "to explore alternatives to filing a double-digit rate hike this year." Despite this glimmer of optimism, Henderson had nothing new to say about how the Postal Service will deal with what it forecasts as a multi-billion deficit this year and how it will overcome its lack of control over labor costs and the constant need to add to its delivery network. Henderson noted that the Postal Service adds 5,600 delivery points and 11 carrier routes every day. Later Nolan indicated that the Postal Service is committed to cut $2-3 billion out of operating costs, eliminating 75,000 work years, reducing administrative staff by 25 percent and cutting transportation costs by 10 percent. These changes, he said would take at least three years. Clearly, therefore, they alone would not be enough to forestall the next rate increase.