The U.S. Postal Service could end its first fiscal year of the new millennium with a $200 million loss, M. Richard Porras, vice president finance, predicted recently.
Porras said his prediction is based on sluggish growth of both mail volume and revenue in fiscal 1999 and the postal service’s aggressive capital improvement program for fiscal 2000.
Porras’ statement comes in direct contrast to Postmaster General William J. Henderson’s prediction, given two months ago while testifying at a House postal subcommittee oversight hearing, that the USPS would post a surplus in fiscal 2000. He declined to indicate what that surplus would be.
While the cause of the slow growth is not immediately clear, Porras indicated that it was due in part to DMers spending more on Internet advertising and to a drop in mail volume from the direct mail sweepstakes industry in response to Congressional attempts to impose tighter controls upon it.
Over the last five years, the USPS has racked up a surplus in excess of $5 billion.
Porras added that early reports for the first of the service’s 13 accounting periods for fiscal 2000, which began Sept. 11, show a 3.7% increase in Standard A (advertising) mail volume over the year before.
He also reported that during the fourth quarter of fiscal 1999, total revenue increased 4.1% to $18.2 billion, from $17.5 billion, while mail volume increased slightly at 1.2%, to 58.4 billion pieces from 57.7 billion pieces.
Income from Standard A Mail for the period rose 4.5%, to $4.1 billion from $4 billion, with a volume increase of 1.8% to 24.7 billion pieces during the period from 24.3 billion a year earlier.
Revenue from Standard B Mail, which includes parcel post, bound printed matter, and library mail, dropped 0.7% to $502.2 million from $505.6 million a year earlier, while volume declined 3.1% to 305.9 million pieces from 315.8 million pieces in the previous year’s fourth quarter.
First class mail revenue rose 3.6% to $10.2 billion from $9.8 billion, while volume increased just 0.8% to 29.5 billion pieces from 29.3 billion pieces.
Income from periodicals and publications increased 4.2% to $627.7 million from $602.6 million, with volume increasing 0.8% to 3.048 billion pieces from 3.024 billion a year earlier.
International mail income rose 6.6% to $431.1 million from $404.5 million, with a 1.2% increase in volume, to 58.4 billion pieces from 57.7 billion pieces.
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