Despite a drop in mail volume in FY 2002, USPS cut a budgeted loss of $1.35 billion in half.

USPS losses for Fiscal Year 2002 were only half of what was budgeted, thanks to aggressive cost management. PMG Jack Potter told the USPS Board of Governors at December’s monthly meeting that the budgeted deficit of $1.35 billion was cut in half, to $676 million.

Chief Financial Officer Richard Strasser told the board, “This aggressive expense management came despite the fact that our delivery network grew by 1.77 million addresses.” Strasser presented final FY 2002 finances as independently audited by Ernst & Young, LLP. He also noted that USPS achieved cost reductions of $1.45 billion, with total expenses of $67.4 billion, which was $185 million below FY 2001 expenses.

PMG Potter cited workhour reductions as the key to cost containment. “Workhours were reduced 78 million, or 23,000 career employees,” he said, “and we accomplished this through attrition. Today we have about the same number of employees we had in 1995, even though we’re delivering 22 billion more pieces of mail and have added 12 million more delivery addresses.”