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USPS Ends Year in Black

The U.S. Postal Service reported that that it concluded fiscal 2005 (September 2004 through October 2005) with a net income of $1.4 billion on record revenues of $70 billion and record volume of 212 billion pieces of mail.

“Financially, we are in the best position we’ve been since the 1970s,” said Postmaster General John E. Potter at the December meeting of the Board of Governors. “Despite the strong financial and productivity records of recent years, we are facing a modest increase in postage rates in January.”

The January 8, 2006 rate increase was compelled by legislation enacted in 2003 requiring the Postal Service to put aside over $3 billion each year into escrow beginning in 2006. Without the escrow requirement, postage rates most likely would have remained at current levels until 2007.

Postage rates have remained stable since June 2002, a direct result of three straight years of operating surpluses. The cash generated from the surpluses have been used to reduce the Postal Service’s once $11 billion in debt to zero.

revenues, record volumes, and positive customer satisfaction ratings.”

In 2005, mail volume increased 5.6 billion pieces to 212 billion. Standard Mail, which American businesses rely on to reach consumers, outpaced First-Class Mail for the first time in history with 101 billion pieces of Standard Mail compared to 98 billion in First-Class Mail. First-Class Mail grew slightly in 2005 after three years of decline. “The increase in mail volume demonstrates that American businesses recognize that hard copy mail works and has a bright future,” said Potter.

Although the postal financial news is positive, Potter cautioned that the forecast for 2006 projects a surplus from operations, but coupled with an anticipated escrow requirement of $3.1 billion, the Postal Service will likely have a net deficiency approaching $2 billion.

Since Potter became Postmaster General in 2001, the Postal Service has reduced costs by a cumulative $15 billion. “Our postal team is moving more mail, going to more places, and doing it with less people,” Potter said. In September, he unveiled plans to continue to reduce costs, pledging to take another $5 billion out of the Postal Service by 2010.

Mailers Companion — Your Source for Information for 10 Years

Mailers Companion was first published in January 1996. Initially launched as The Mailroom Companion to help convey the elements of Classification Reform, here we are 10 years later and still going strong. The Mailers Companion hasn’t always looked the way it does now; nor has it presented information in the same way it does now. It has undergone a series of changes in name, frequency, format, and much more.