USPS Reduces 2002 Loss Estimate to $676M
Potter's announcement represented the third time the USPS has slashed its projected loss for the 2002 fiscal year. The postal service also was able to reduce its debt by $200 million instead of the $1.6 billion increase initially projected for fiscal 2002.
Potter had told the board in September that the loss for the 2002 fiscal year, which ended that month, would be $1.2 billion. Later that month he told attendees of the National Postal Forum in Boston that the USPS would "finish the year with a loss well below $1 billion."
The USPS reduced losses despite a 4.6 billion-piece decline in volume and a 1.77 million-address rise in its delivery network during the fiscal year, postal officials said. The postal service cut 23,000 career employees through attrition, representing a decline of 78 million work hours, Potter said.
Potter also credited $1 billion in additional revenue gained by the settlement on an early implementation rate in the general rate case and a rallying of USPS employees by union leadership.
"In 2002, we finally dispelled the myth that the postal service could not manage in a declining volume period," Potter said. "We did."
The postal service seeks to slash costs by $5 billion by the end of 2006. Board of Governors chairman Robert F. Rider praised Potter and postal management for their work to raise productivity but said that much work lies ahead.
Rider cited the postal service's efforts to improve its flats automation program as exemplary of the USPS' work to increase efficiency. He renewed calls for a change in the service's contributions to the Civil Service Retirement System, which the USPS has argued should be lower.
The USPS owes $5 billion to the retirement system, rather than the $32 billion previously projected, but needs congressional approval to lower its payments. If approved, the postal service could delay a rate increase until 2006.
"Together, we have made significant progress toward transformation," Rider said. "But the next step must be taken by our legislators. The mailing community and the postal service must come together to urge legislation to change our CSRS funding formula and bring rate stability to the mailing industry."