The U.S. Postal Service made a $363 million profit in fiscal 1999, the fifth consecutive year that the post office has finished in the black, officials announced yesterday.
Postal Service employees also handled a record volume of mail--201.6 billion pieces, up 2.4 percent over the previous year.
The financial results were especially encouraging to senior postal managers, since they came in a year when the agency absorbed about $150 million in unanticipated premium increases for employee health insurance benefits and about $300 million in spending to fix computers for the Year 2000 glitch.
Overall, in fiscal 1999, the Postal Service tallied revenue of $62.7 billion and expenses of $62.4 billion.
At one point earlier this year, officials worried about reporting a loss. But a cost-cutting program, started in October 1998, saved $1 billion, and the agency increased its productivity by 2.3 percent, said M. Richard Porras, the Postal Service's chief financial officer.
Porras and John H. Ward, the Postal Service's controller, said the savings of $1 billion were achieved by cutting $400 million in overhead costs at headquarters, reducing headquarters employment by 400 jobs, cutting advertising budgets and slowing initiatives in major programs.
Field offices contributed $350 million in savings, and transportation planners came up with another $50 million by switching some mail to trucks from planes without sacrificing delivery standards, they said.
Although mail volume continues to rise, Porras said, it has not grown as fast as officials had hoped. That factor, combined with increased labor costs and other expenses, means the Postal Service will seek to raise the price of a stamp in 2001, officials said. Industry lobbyists expect the service to file for the rate increase early next year.
For the fiscal year that ended in September, the agency actually carried a $3.5 billion deficit on its books, accumulated during the years when it regularly operated in the red.
Postal officials also disclosed that Norman E. Lorentz, the Postal Service's chief technology officer and Y2K troubleshooter, will leave next month to join an Internet company based in Manhattan that provides services to information technology professionals. He moved into the technology job in 1998 after four years as a vice president for quality management.