United States Postal Service (USPS) CFO Richard Strasser told the service's Board of Governors yesterday that he expects flat revenue growth in the next fiscal year. Strasser made those remarks while unveiling USPS's 2004 financial plan, which includes savings through reduction of operational costs and expedited debt repayment.
The plan requires continuing cost reductions of $1.4 billion along with a fifth straight year of productivity gains, even while the delivery network is expected to grow another 1.8 million addresses to 143 million.
Though Strasser said forecasts point to another decline of some 1.3 billion pieces of first-class mail, he said he expects standard mail to increase by nearly 4.2 billion pieces. Overall mail volume growth should be up 2.7 million pieces, which is a 1.3% growth rate.
The Postal Service's revenue for 2003 were $1.5 billion lower than expected and its expenses of $64.6 billion were $1.8 billion less than predicted, Strasser said. Most of the savings is due to recently passed legislation that allowed USPS to reduce retirement fund payments by $3.3 billion.
Strasser said USPS had been on course to over-fund its pension fund by $71 billion largely because of a higher-than-expected yield on the fund's investments.
Strasser said the plan is to reduce debt from $11.1 billion to $7.3 billion and hopes to cut it further thanks to a predicted net income of $2.1 billion in fiscal 2004, which begins Oct. 1.