By Leigh Strope
Associated Press Writer
Wednesday, Jan. 24, 2001; 3:21 p.m. EST

WASHINGTON –– Postmaster General William Henderson announced Wednesday he is retiring after three years on the job and nearly three decades working for the Postal Service.

Henderson, whose last day is May 31, cited improved customer service and technological advances as among his chief accomplishments.

Henderson, 53, said he wants to pursue work in the private sector, though he is uncertain what he will be doing.

The Postal Service is a semi-independent part of the government overseen by a nine-member board of governors, which appoints the postmaster general. It is not subsidized by tax money but is regulated and must provide universal service to every home at a flat rate.

Henderson is a 29-year agency veteran whose father was a career postal clerk.

During Henderson's tenure as postmaster general and chief executive officer, the Postal Service achieved record productivity and customer service levels. The agency also has implemented a comprehensive technology strategy, which includes a plan to let customers track their mail.

But the Internet represents "a mixed blessing" to the Postal Service, Henderson said.

It can offer a new level of efficiency in communicating, marketing and retail. But bills and payments eventually will go electronic, taking a sizable chunk of the agency's revenue.

"The fiscal health of the Postal Service is good, but it's challenged," he said. "We've had record net incomes over the last few years and record productivity levels, but the slowing economy presents a challenge to everybody."

The agency finished fiscal 2000 with a $199 million loss. The cost to mail a letter went up a penny this month to 34 cents, but some rates were cut, despite the Postal Service's request for increases.

The post office had made money for several years, but the request for a rate increase came in anticipation of a small loss in 2000 and a larger one in 2001.

Also this month, the Postal Service and rival FedEx announced an agreement to work together. FedEx will haul Express Mail, Priority Mail and some first-class mail for the post office, and the Postal Service will allow FedEx to place its collection boxes at post offices. The agreement has been criticized by competitors.

"It's not anticompetitive at all," Henderson said. "We've used an outside transportation network for years."

Also, the agreement allowing FedEx boxes at post offices is not exclusive, and the Postal Service would negotiate with any other carriers for a similar arrangement, he said.

Postal officials have long sought more freedom to introduce new services and products and to have flexible rates like private businesses. Henderson said his biggest disappointment was failure to get postal reform through Congress.

"We really desperately need pricing flexibility to remain competitive," he said. "What business would design a model that doesn't have any control over its prices?"