Tough economic times hurt post office

ST. LOUIS (AP) - August 25, 2008 Potter told the National Association of Postmasters of the United States at their convention in St. Louis that the postal service is grappling with issues that many businesses are facing - like how to handle high fuel prices.

"We simply cannot control it," he said. But, he pointed to the postal service's large fleet of alternative-fuel vehicles as a positive step.

Potter praised postmasters and postal workers for their commitment to service and reliability, but said more needs to be done to reduce bureaucracy, cut costs and embrace technology.

"We're probably going to lose somewhere in the neighborhood of $2 billion this year," he said. "If we don't act, we'll lose $2 billion or more the following year."

Earlier this month, the Postal Service reported it lost $1.1 billion in its third quarter ended June 30. Operating revenue was $17.9 billion, down $437 million, or 2.4 percent, compared with the same period last year. Operating expenses totaled $19.0 billion, an increase of $178 million from the third quarter last year.

Total mail volume was 48.5 billion pieces, a 5.5 percent drop from the same period last year.

For the first nine months of its fiscal year, then agency said it lost $1.13 billion.

Postage rates rose a penny in May to the current 42-cent price. Another increase is expected next May, with the amount to be announced in February. Any increase is limited to the rate of inflation.

Potter said Monday improvements to the postal service's Web site and better bar-code technology for mail should yield improved results. He said there are also opportunities to increase the amount of advertising that's done through the mail, and said working with small and mid-sized businesses was the postal service's biggest opportunity for growth.

The keynote speaker, U.S. Rep. Jo Ann Emerson, R-Mo., expressed concern that financial concerns could threaten rural post offices. She said they should remain open, as they often serve as a community's communication hub and help towns preserve their identities.

"I believe very strongly that our rural communities are a whole lot more than a 5-digit or 9-digit zip code," she said.

Larry Jacobs, the retired postmaster of Bloomington, Ind., said there are safeguards in place to make it hard to close a post office because they are so often integral to keeping small towns thriving.


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