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Archive for Wednesday, December 5, 2001

Postal Service ends year $1.68 billion in the red

December 5, 2001

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— Battered by the terrorist attacks and a declining economy, the Postal Service saw its first drop in volume in a decade and finished the fiscal year with a $1.68 billion loss.

Managers are scrambling to cut expenses, seeking help from Congress and discussing the possibility of speeding up a rate increase.

"The economic recession, the Sept. 11 attacks and the anthrax attacks tossed our financial situation up in the air," Postmaster General John Potter said Tuesday.

Figures for the year that ended Sept. 30 show the agency with income of $65.8 billion and expenses of $67.5 billion. It was the second consecutive year the agency finished in the red, after making profits for five years.

Mail volume for the year totaled 207 billion items, down about 400 million from the year before. In the first two months of this fiscal year, volume remains sharply lower.

The faltering economy and increased competition were the primary causes of the losses, along with the September terror attacks, said postal Chief Financial Officer Richard Strasser.

Two postal workers have died of anthrax, and others have been sickened. The agency faces massive costs for medical care, decontaminating buildings, sanitizing the mail and planning future ways to protect the mail.

President Bush has released $175 million in emergency money, and postal officials have gone before Congress requesting additional aid.

The post office has applied to the independent Postal Rate Commission for an increase next year that would add 3 cents to the current 34-cent first class stamp. Stamp prices last went up in January, by a penny.

The next increase had been expected to take effect in late September or early October of next year, but officials said it could be moved up to as early as June.

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