The U.S. Postal Service ended the first quarter of fiscal 2008 with net released Jan. 30. Total revenue for the quarter ending Dec. 31 was up 3.5% over the same period last year primarily due to the May price change. The price increase masked weak volume for the quarter. Total mail volume declined 3 percent; First-Class Mail was particularly affected, declining by 3.9%.
The economic downturn was the main factor for the volume decline, as the hard-hit financial and housing sectors are heavy users of the mail, said Postmaster General John Potter. Im proud our managers and employees adjusted quickly to these changing market conditions, making a positive quarterly net income possible. Not only did they help us tighten our belt, but they provided record levels of service.
Total expenses were $19.7 billion, versus 22.7 billion for the same period last year. The $3.0 billion difference was due to the one-time expense of funding retiree health benefits required in quarter one 2007 by the Postal Accountability and Enhancement Act of 2006. Excluding the one-time cost, expenses remained constant, despite rising fuel and labor costs. This was accomplished while serving an additional 1.7 million new addresses versus the same period last year.
Because mail volume for the rest of the year is uncertain, well continue to streamline operations to manage expenses and improve on-time delivery to provide even greater value to the American people, said Potter. We also intend to take full advantage of the pricing flexibility afforded by the new law, work with customers to better meet their needs, and find new ways to grow revenue.