U.S. Postal Service Losses Mount, Warns of Potential for DefaultsFebruary 9, 2011
Details of the first quarter results include:
• Operating revenue of $17.9 billion, compared to $18.4 billion in the same period a year earlier, a decrease of 2.6 percent;
• Operating expenses of $18.2 billion, compared to $18.6 billion in the same period a year earlier, a decrease of 2.4 percent;
• Total mail volume of 46.4 billion pieces, compared to 45.7 billion pieces in the same period a year earlier, an increase of 1.5 percent.
The Postal Service reduced work hours in the first quarter by 6.4 million hours or 2.1 percent representing a reduction of approximately 3,600 full time equivalent employees. The number of career employees on Dec. 31, 2010 was 578,292, a reduction of 5,616 employees since the beginning of the first quarter. Since Dec. 31, 2007, the number of career employees has been reduced by 102,721 or 15.1 percent
Service performance remained excellent during the first quarter, with the national score for overnight Single-Piece First-Class Mail arriving on-time 96 percent of the time, a slight improvement over the same period a year earlier.
“I am very proud of our workforce. Postal employees continue to deliver exceptional service in these difficult times and in very challenging weather,” said Postmaster General Patrick R. Donahoe, addressing the Postal Service’s Board of Governors in open session today in Washington.
Several new marketing initiatives have been introduced that may help to improve revenue growth in 2011, including expansion of simplified addressing for business mailers, Priority Mail Regional Rate Boxes, Reply Rides Free, customized cards and the sale of gift cards. In addition, in January 2011, new Shipping Services prices increased an average of 3.6 percent. New Mailing Services prices that are limited to the Consumer Price Index cap of 1.7 percent, will take effect in April. While new marketing initiatives and price increases may help improve revenue growth, electronic diversion implies long term structural changes in demand.
The Postal Service is aggressively pursuing a plan to reduce total expenses, which include organizational redesign initiatives. The Postal Service projects $2 billion in cost savings in fiscal year 2011, including a reduction of some 40 million work hours across the organization. Benefits of these initiatives, however, may be offset by rising fuel prices. Also, new contracts with the American Postal workers Union (APWU) and the National Rural Letter Carriers Association (NRLCA) are currently in negotiation.
Copies of the first quarter financial results will be available later today on the Postal Service Website: http://www.usps.com/financials/_doc/Quarter_I_FY11_10Q_Final.doc
About the U.S. Postal Service
A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation, 150 million residences, businesses and Post Office Boxes. The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations. With 32,000 retail locations and the most frequently visited website in the federal government, usps.com, the Postal Service has annual revenue of more than $67 billion and delivers nearly 40 percent of the world’s mail. If it were a private sector company, the U.S. Postal Service would rank 29th in the 2010 Fortune 500. Black Enterprise and Hispanic Business magazines ranked the Postal Service as a leader in workforce diversity. The Postal Service has been named the Most Trusted Government Agency six consecutive years and the sixth Most Trusted Business in the nation by the Ponemon Institute.
The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations.
Source: Press release.