USPS Will Cut Costs $5B by 2006, Potter Says

The U.S. Postal Service will cut $5 billion in expenses by 2006, postmaster general John E. Potter told the USPS Board of Governors yesterday at its monthly meeting in Memphis, TN.

“We believe we have turned the corner on many of the initiatives in the Transformation Plan,” Potter said. “We not only reduced costs by $2.9 billion, but we also provided record levels of service to our customers, the American people.”

Potter identified four objectives of the Transformation Plan that will let the USPS continue to provide mail service to every American.

“First, we will continue our commitment to improve service performance,” he said. “As part of that commitment, we will continue to focus on making improvements to reduce the risk our systems face against another bioterrorism attack.

“Second, we are committed to exploring with the Postal Rate Commission alternatives to the ratemaking process within the current law. Those alternatives include negotiated service agreements and phased rates.

“Third, we will use our Transformation strategy to grow our business by enhancing existing products and services and by expanding access and convenience to postal services.

“Finally, we will continue to manage our finances and reduce costs. Fiscal year 2003 will be the second year in our five-year commitment to take $5 billion out of our costs by 2006.”

Also at the meeting, Paul Vogel, vice president, network operations management, briefed the board on the agency's partnership with FedEx. The board, which typically meets at postal headquarters in Washington, met in Memphis to tour FedEx facilities. Vogel said FedEx was vital to keeping the mail moving following the federal air security restrictions put in place immediately after last Sept. 11.

“The biggest help that we had in addressing the events of September 11 and the network disruptions,” he said, “was the help extended by our logistics partners, Federal Express.”

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