USPS' Finances Are Solid, CFO SaysThe U.S. Postal Service's finances remain solid, with impressive gains in volume and revenue, its chief financial officer said this week.
Richard Porras, who was speaking before the USPS' board of governors at its monthly meeting in Harrisburg, PA, said that as of May 22, the agency's net income reached $1.4 billion through its first nine accounting periods of its fiscal year. It had budgeted for $804 million. Nevertheless, he said, through accounting period 11, which ended July 17, net income fell to $1.1 billion.
The agency "lost $177 million in AP 10, and in AP 11 experienced a loss of $147 million," said Bill Taymen, manager of budget and financial analysis. Taymen cited the Postal Service's seasonal business for the decline.
"The majority of our revenue is earned in the fall mailing season and the Christmas season, which take place in the first two quarters of our fiscal year," he said.
During its first quarter, which ran Sept. 13 to Dec. 5, the USPS had a net income of $976 million. By the end of the second quarter, from Dec. 6 to Feb. 27, its net income was up to $1.23 billion.
"The summer is always slow and mail volume always drops," Taymen said. "As a result, we are projecting that by the end the fiscal year, which is September 30th, we expect income to decline to $800 million."
Last year's fourth quarter was greatly helped by the UPS strike.
Also at the meeting, the board approved money for capital investments that the Postal Service says will improve mail delivery for many direct mailers. Its capital funding budget is $17 billion, to be spent over a five-year period. Part of the money will go toward modernizing the USPS Computerized Forwarding Service (CFS), which is responsible for forwarding all classes of mail and generating the address correction service notifications that build its National Change of Address (NCOA) database.
The money will allow the USPS to "replace the old CFS system, which is mainframe-based, with a more state-of-the art system that is based on a network LAN server," said systems analyst Lloyd Dixon. "The [new] system is very flexible, allowing for more interactions with other USPS systems."
National deployment of the system will begin in October.
According to Bill Dowling, vice president of engineering, "The new equipment will improve mail forwarding to the 43 million American families and businesses who move each year."
Funding for 54 additional Small Parcel and Bundle Sorters that automate the sorting of an extra 3 million small parcels and bundles a day also was appropriated. When fully deployed, the Postal Service will have 332 sorters in operation.
In addition, the board approved money for 5,000 all-electronic vending machines. The machines will accept the new currency introduced by the Treasury Department as well as debit, credit and future smart card technology applications.
Because of contractual procedures, the USPS does not release the actual dollar amounts that are being spent on each project.