The U.S. Postal Service expects revenue growth from standard and first class mail but foresees a first-class volume decline in fiscal 2003, according to its just-released annual performance plan.
For the fiscal year which began Sept. 1, the USPS admits that much of this revenue growth projection is based on the postal rate hikes that took effect June 30, raising rates an average 7.7% across the board.
In standard mail, the USPS is projecting that revenue will grow from $15.9 billion for the fiscal year 2000, which ended Sept. 1, to $17.4 billion in fiscal 2003.
Despite large advertiser expenditure reductions over the last two years the USPS felt that new technologies that support one-to-one marketing strategies will help the standard mail category hold its overall market position.
While first class mail volume is not expected to grow during the next year, revenue will increase from an estimated $36.3 billion in fiscal 2002 to a projected $38.2 billion the following year, thanks to the postal rate hikes.
In fact, the USPS, which now moves an estimated 101.7 billion pieces of first class mail a year, expects to move 4 billion fewer in fiscal year 2003, losing out to electronic bill payment, e-mail, and facsimile. In addition, credit card mailers are likely going to reduce their volumes as response rates to credit card offers continues to decline and consumer debt mounts.
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