The U.S. Postal Service still expects to hold rates steady through 2006 after a positive third-quarter performance, chief financial officer Richard J. Strasser Jr. said in a quarterly fiscal update to the Board of Governors yesterday.
The USPS had a net income of $259 million during the period, Strasser told governors at their meeting in San Francisco. Postmaster general John E. Potter has promised mailers that the postal service won't implement another rate case until at least calendar year 2006.
The third quarter, which ended June 30, also saw an increase in energy costs of $80 million compared to the third quarter of fiscal 2003, Strasser said. Nevertheless, expense growth was held to 2.8 percent. Estimated mail volume increased 2 percent.
In other business, the board approved two capital investment projects, including:
· $19.2 million to extend the lease on the Priority Mail Processing Center in Springfield, MA, buy a neighboring 9.5-acre parcel and convert the site into a Logistics and Distribution Center so two other facilities can be consolidated.
· $32.5 million to buy a 70-acre site in Pontiac, MI, and design a Northeast Metro Michigan Processing and Distribution Center, a proposed project that the USPS will submit for approval next year that would consolidate work currently being done at more than a half-dozen sites.