Despite an increase in overall mail volume, the $611 million surplus the U.S. Postal Service posted for the first quarter of Fiscal 1999 was $159 million less than expected, said Postmaster General William J. Henderson, prompting some industry watchers to renew the call for postal reform.
This less-than-projected first quarter surplus means that “the postal service’s ability to adhere to its budget plan is probably in question,” said Gene Del Polito, Advertising Mail Marketing Association president.
Agreeing with other industry association officials, Del Polito said the postal service’s inability to meet or exceed its financial projections, “clearly illustrates the need for postal reform because if the system is allowed to run on automatic pilot under the current rules, the USPS will probably go through the usual moves of raising rates again, losing customers, and raising rates again to cover the resulting losses.”
Postal officials planned for a $770 million first quarter surplus last summer as part of their $60 billion budget for the new fiscal year which began on Oct. 1.
In a preliminary report on first quarter activity to the postal service’s Board of Governors dealing largely with first class and holiday mail, but without actual volume and income amounts, Henderson said Standard A (formerly third class) mail volume rose 8.1%; parcel volume increased 5.4% and first class volume went up by 1.5%.
Although the actual numbers won’t be available for several weeks yet, the PMG added that the USPS delivered “a record 16.7 billion pieces of mail during the [holiday] season, up 3% over last year.” Neither he nor CFO M. Richard Porras was able at deadline to provide a detailed class-by class volume and income breakdown.
Both cautioned the BOG not to expect similar results for the second quarter, which it was noted, is traditionally a slow mailing season, especially for direct marketers.
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