No Postal Rate Increase Until 'Well Into 2004,' Potter Tells Forum Attendees

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BOSTON -- The U.S. Postal Service won't raise rates "until well into 2004," postmaster general John E. Potter told a packed audience at the Fall 2002 National Postal Forum here yesterday.

When Potter promised earlier this year not to increase rates until 2004, many in the industry thought that meant January 2004, but because of the agency's improving financial situation, they now don't expect a request to be filed with the Postal Rate Commission until April 2003 or even a little later. Potter, however, was not specific.

The postmaster general also told the attendees that the USPS' deficit for fiscal year 2002 will be even less than the revised numbers that were announced a few weeks ago.

"What an amazing six weeks it has been," he said. "I'm very pleased to tell you that as a result of the increased volume from you, our customers, and cost reductions on our end, it now appears that we will finish the year with a loss well below $1 billion."

The comment brought applause from the audience.

Potter also mentioned the negotiated service agreement the USPS filed last week with the PRC. The case seeks a three-year test between the postal service and Capital One Services Inc., its largest end-user of First-Class mail. The agreement, he said, will "give them an incentive to grow their business and ours."

Potter said the USPS will file another proposal this week offering small-circulation periodicals a way of achieving work-sharing discounts that are common with larger, mass-circulation periodical mailers.

"We listened to customers and took advantage of what we can do under the existing laws by increasing the size of presorted flats bundles," he said.

Potter also mentioned that the Confirm service has been implemented on a subscription basis. Confirm uses Web-based data technology to enable users of the mail to know the status of their mailings as they go through our processing systems.

"You've told us that this service adds real value and integrity for everyone," he said. "I am convinced customers will find a number of new and dynamic uses we have haven't even thought about. Just as important for you, postal operations managers use Confirm as a diagnostic tool to isolate operational problems and take corrective action to improve service and delivery predictability."

Starting in January, Potter said, Priority Mail, Express Mail and other postal products will be available in select Hallmark Gold Crown stores across the country.

Looking to 2003, Potter said the USPS is poised to accomplish four objectives:

· Continue its commitment to improve service performance.

· Explore with the PRC alternatives to the ratemaking process within the current legislation.

· Use the transformation strategy to grow the USPS' business by enhancing existing products and services.

· Continue to manage finances and reduce costs.

"Fiscal year 2003 will be the second year in our five-year commitment to take $5 billion out of our costs by 2006," he said.


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