Rate Hike Postponement Hurts USPS' IncomeThe U.S. Postal Service reported its FY98 results on target at its board of governors meeting last week in Washington, with total revenue at $60.1 billion, a 3.2 percent increase over last year. Net income was $550 million.
The results show the expected revenue shortfall, which Richard Porras, chief financial officer and senior vice president, attributed to the postponement of the rate hikes. The new postal increases will go into effect Jan. 10.
Total operating expenses for FY98 was $57.8 billion, or a $2.9 billion increase over last year. This increase, Porras said, resulted from added program spending for infrastructure improvements in service, efficiency, customer satisfaction and added work load. The USPS' revenue growth of $1.9 billion primarily came from First-Class mail, Priority Mail and Standard-A mail.
First-Class mail revenue of $34 billion grew $585 million, or 1.8 percent over 1997. Priority Mail grew $293 million, or 7.6 percent over last year. And, exceeding this growth, Standard-A mail increased $877 million over last year, which is $67 million more than expected. The USPS' total volume of 198 billion pieces grew 3.7 percent over last year.
Other increases included:
* First-Class volume, 1.5 percent between FY97 and FY98.
* Standard-A volume, 7.3 percent.
* Priority Mail volume, 9 percent
* Standard-B (parcel), 12.5 percent.
Porras also revealed the results of a Roper Starch Report that focused on favorability ratings among federal departments. The report said people give high marks to the USPS. More than three in four Americans -- 78 percent -- have a "highly" or "moderately favorable" opinion of the USPS, ranking it first when compared to 15 federal departments. Other rankings: Agriculture Department, 65 percent; Defense Department, 64 percent; and State Department, 60 percent.