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USPS Says Service Remains At Record Levels, Cuts Costs By Billions

Press release from the issuing company

MEMPHIS, TN - The Postmaster General today reported that the Postal Service is well on its way to reducing costs $5 billion by 2006 and outlined four key objectives intended to ensure affordable mail service to every American, regardless of where they live. "We believe we have turned the corner on many of the initiatives in the Transformation Plan," explained John E. Potter. "We not only reduced costs by $2.9 billion, but we also provided record levels of service to our customers, the American people." The Transformation Plan is the Postal Service's long- and short-term blueprint for the future. It will enable the Postal Service to continue to provide affordable service to every American. Continued productivity gains are a cornerstone in the Transformation Plan. Potter noted that today's Postal Service has the same number of career employees it had in 1995 while delivering 21 billion additional pieces of mail to 12 million more addresses. About 23,000 employee positions were reduced in FY 2002. Plans for the current fiscal year, which started in September, are to reduce another 12,000 employees by attrition. The FY 03 budget includes approximately $1 billion in cost reductions. FedEx Express' Role in Moving the Mail In his formal monthly comments at the Board of Governors meeting here, Potter praised the business relationship with FedEx Express for its role in moving the mail, especially following restrictions placed on mail moving by commercial airlines after September 11, 2001. "It's a business relationship that works and helps us keep America's mail moving. FedEx has helped us raise our First-Class and Priority Mail scores to record levels," he added. "Express Mail service performance is the highest it's been in four years." In 2001, FedEx began flying Express, Priority Mail and First-Class Mail for the Postal Service under a contract that benefited both parties. Four Objectives In describing the four key objectives in the Transformation Plan, Potter said, "These four objectives will help us sustain the momentum we generated this past year and make the changes outlined in our Transformation Plan." "First," he said, "we will continue our commitment to improve service performance. As part of that commitment, we will continue to focus on making improvements to reduce the risk our systems face against another bioterrorism attack," he explained, referring to biohazard detection systems the Postal Service is testing to reduce the risk of terrorists using the mail as a weapon. "Second, we are committed to exploring with the Postal Rate Commission, alternatives to the ratemaking process within the current law. Those alternatives include Negotiated Service Agreements (NSAs) and phased rates." NSAs benefit high-volume customers by offering flexible prices and services targeted to meet their specific needs. Phased rates enable customers to know the amount of rate increases and when they will go into effect so that they can better forecast and budget their mailing costs. The Postal Service benefits by processing mail that is prepared with the most concise address information possible to minimize postal sorting costs. "Third," he explained, "we will use our Transformation strategy to grow our business by enhancing existing products and services -- and by expanding access and convenience to postal services." Beginning this month, the Postal Service is providing "Buy Stamps Here" decals to 60,000 ATM, grocery, and drug store locations where individuals can purchase stamps in addition to 38,000 post offices and the Postal Service's web site: www.usps.com. "Finally, we will continue to manage our finances and reduce costs. Fiscal year 2003 will be the second year in our five-year commitment to take $5 billion out of our costs by 2006."