Wednesday, May 25, 2011

Could a July 2012 Shut-down Date for the USPS Be Optimistic?

The Wall Street Journal has reported that a number of private sector economic forecasters are toning down their economic forecast for the rest of 2011.   Slower economic growth is not good for the USPS as it means less revenue across all mail classes.  Slower economic growth is one of the factors that CFO Joe Corbett noted which could cause a July 2012 shut down date to happen sooner when he spoke at MTAC today.

The April 2011 preliminary financial report shows losses before dealing with workers compensation or retiree healthcare payments.   First Class volumes are down at high single-digit levels, which likely means that single-piece volumes continue to drop at well above 10% year-to-year.   Even Standard Mail volumes and revenue seems to have stalled.   The data also shows significant increases in transportation expenses, mostly driven by rising fuel costs and increased vehicle maintenance caused by a delivery vehicle fleet that has long passed its sell by date.

Postal Stakeholders need to stay on top of economic factors that drive either postal costs or revenue.  They need to determine on their own how changing economic forecasts move the shut down date forward or back.


Anonymous said...

Least expensive postal rates in the WORLD!!
(Maybe, GOD FORBID, raise the rates-they'll still be least expensive)

Anonymous said...

If the post office were to charge for holding mail and charge for change of address,this could take the post office out of the red.This might not be popular but charging for luggage as the airlines did is keeping them in business.The post office is a business and needs to charge for services offered.