Postal Profit Picture

Postal Profit Picture

September 11, 1996
THE DAILY FED

Postal Profit Picture

Postal Service officials said yesterday that they anticipate to have their third straight profitable year in fiscal 1997. USPS estimates its 1996 profit will be between $1.2 billion and $1.5 billion, and in 1995 the service finished $1.8 billion in the black.

Projected profit for 1997, though, is only $55 million. While overall postal revenue is projected to rise 4.6 percent during the year, to $58.9 billion, USPS expenses are expected to go up by 6.8 percent.

Growing mail volume, rate increases, and agency cost-cutting efforts have all played a role in recent USPS profit gains. However, agency oficials say rising labor costs are threatening profitability in the next few years.

The Postal Service's relationship with its employee unions has grown increasingly uneasy as Postmaster General Marvin Runyon cut overtime last year, trimmed programs, and announced his intention to contract out more work. Productivity has been down at the Postal Service for three consecutive years, and USPS officials see productivity gains as critical to a healthy future bottom line.

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