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“As the postal service reaches the final quarter of its fiscal year, it’s clear that weakness in the overall economy is continuing to have a profound negative effect on our finances,” said Postmaster General Jack Potter at a press conference Wednesday morning (August 5, 2009).  He predicted the USPS could lose as much as $7 billion this year.


The USPS posted operating revenue of $16.3 billion for the quarter ended June 30, a 9% decrease from $17.9 billion in the prior year. Postal management attributed this in part to an $807 million increase in workers’ compensation expenses. Standard mail volume for the quarter was 18.8 billion pieces, a decrease from 23.2 billion pieces in the prior year. Standard mail revenue for the quarter was $3.96 billion, down from $4.8 billion in the prior year.  


“Virtually every element of the mailing industry has been experiencing the effects of reduced employment, reduced spending and reduced consumer confidence. We are seeing that reflected in mail volume and revenue with the third quarter adjusted net loss of $2.4 billion.”


The postal service also attributed a significant portion of its losses to a nearly 20-billion-piece decline in mail volume so far this year.  Third quarter mail volume totaled 41.6 billion pieces, down 7 billion pieces, (14.3%, compared to a year ago) — the largest consecutive three-quarter drop in total volume since 1971, according to the USPS.


The movement toward electronic alternatives will also cause continued downward pressure on mail volume into coming years, according to the postal service.


PMG Potter reiterated his calls for help in dealing with the USPS’s yearly obligation to pre-pay $5.4 billion to cover retiree healthcare benefits as well as possibly reducing mail delivery to five days down from six.

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  1. Former Member
    What is the message here? Is this an SAP customer where some SAP solution is helping them to come out of their troubles? I could not understand what the message is here.

    or are you just giving the readers some general info on the state of the industry? I also read earlier in the year that DHL is in trouble too.


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