|Board of Governors Focuses on Actions to Ensure Long-Term Viability of Nation’s Mail System|
|The U.S. Postal Service ended its first quarter (Oct. 1 – Dec. 31) with a net loss of $384 million as the economic recession contributed to a 5.2 billion piece mail volume decline compared to the same period last year. The 9.3 percent volume drop marked the eighth consecutive quarter of accelerating volume declines. With no economic recovery expected for the remainder of FY 2009, the Postal Service projects volume for the year will be down by 12-15 billion pieces.|
The final first quarter results will be published later this month. The preliminary results, released during today’s Board of Governors meeting, include operating revenue of $19.1 billion, a decrease of $1.3 billion, or 6.3 percent, compared to the same period last year, and operating expenses of $19.5 billion, a reduction of approximately $200 million, or 1.1 percent, from the first quarter of last year. While lower energy prices in the first quarter offered some relief, there was expense pressure from record high cost-of-living adjustments that are part of the national collective bargaining agreements.
Most of the decrease in mail volume is attributable to the worsening recession, which has adversely affected all classes of domestic mail. First-Class Mail volume decreased by 1.8 billion pieces and Standard Mail volume was down 3.0 billion pieces in the first quarter.
If current revenue and volume trends continue, the Postal Service could experience a year-end net loss significantly higher than last year’s $2.8 billion loss. The Postal Service is a reflection of the economy in general. Retail sales, employment and investment spending are all significant indicators of mail demand. All three of these indicators are projected to decrease significantly in 2009.
“We are taking bold steps to cut costs immediately. At the same time, we are examining, realigning and streamlining our business to address longer-term financial pressures while continuing to provide high levels of service to the America public,” Postmaster General John Potter told the Governors. These steps include: