The effects of the Sept. 11 attacks, the anthrax mailings and a sluggish economy caused the biggest drop in mail volume in more than 30 years, Richard J. Strasser, the U.S. Postal Service's chief financial officer and executive vice president, told the USPS' Board of Governors at its annual meeting yesterday.
Overall mail volume for the postal service's first quarter, which ran from Sept. 8 to Nov. 30, dropped 2.8 billion pieces, or 5.5 percent, from the same period in 2000. Net income, Strasser said, was $108 million, or $521 million less than expected. Total revenue for the quarter was $15.4 billion.
Standard Mail volume led the decline, with 2.2 billion fewer pieces mailed than last year. First-Class Mail dropped 550 million pieces below last year's volume, while Priority Mail volume dipped 47 million pieces.
The USPS did hold down costs, Strasser said, with total expenses of $15.3 billion for the quarter falling $355 million below plan, and just 0.5 percent above the same period last year.
He attributed success in controlling expenses to aggressive work-hour cuts, including management and staff reductions. During the past 15 months, he said, the USPS has reduced its staff by 16,300 full-time employees.
Meanwhile, Robert Rider, the board's chairman, said the rate case settlement deal, which would raise rates an average of 8.7 percent June 30, will likely be approved.
He said he thinks mailers that have not yet accepted the deal will either agree to it or not formally oppose the new rates.
So far, 34 of the 60 parties involved in the settlement talks have agreed to the proposal.
Five parties have submitted a motion that ask to cross-examine USPS witnesses. Those parties are: American Postal Workers Union, Amazon.com, The Coalition of Religious Press, The Newspaper Association of America and Val-Pak. The five have until Jan. 18 to file a formal notice of opposition to the proposal.
In other board activity, Rider was re-elected chairman and S. David Fineman was re-elected vice chairman.
