USPS' Most Recent Financials Are Below Plan

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WASHINGTON -- The U.S. Postal Service's financial outlook continues to be bleak.


Richard J. Strasser, the agency's executive vice president and chief financial officer, told the Board of Governors at its monthly meeting yesterday that as of March 23, the net loss for fiscal 2001 is $291 million, compared with an expected surplus of $291 million, a difference of $582 million.


Revenue of $36.4 billion is $538 million behind plan. Growth is 1.9 percent higher than the same period last year, and expenses are $36.7 billion, or $44 million more than plan.


The board also received an update on the status of Remote Encoding Center closings and the Remote Bar Coding System program.


The RBCS program was developed in the early 1990s to shift mail from labor-intensive manual processing to efficient and cost-effective automated processing. The program was planned as a result of advancements in address recognition technology.


The use of postal sorting technology to read handwritten and poorly machine-printed addresses has increased from just 2 percent in 1997 to nearly 75 percent today. Sorting mail by automation offers a tenfold savings over manual processing. It costs more than $55 to sort 1,000 letters manually compared with about $5 to sort the same number through automation.


Of the original 55 RECs, 25 of the 30 targeted for closure have shut down.


The remaining five are scheduled to close by the end of this year. Closing all 30 RECs will result in annual savings of $46 million.


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