US Postal Service 2008 Annual Report Download - page 16

Download and view the complete annual report

Please find page 16 of the 2008 US Postal Service annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 76

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76

16 | 2008 Annual Report United States Postal Service
What a difference a year
makes. At the start of
the fiscal year, the Postal
Service set ambitious goals to cut
spending by $1 billion, raise service
to new record levels, improve
customer satisfaction, and deliver
solid business performance that
would improve our bottom line
by nearly $5 billion from the prior
year while essentially matching
last year’s record mail volume. By
year’s end, we met or exceeded
all of the goals directly within, our
control but saw customer demand
and postal revenues decline at an
unprecedented rate as the U.S.
and global economies experienced
serious deterioration.
While I believe it is necessary to focus
this message on the Postal Service’s
immediate, extraordinary challenges,
it is only appropriate to first recognize
the achievements of postal managers
and employees in fiscal year 2008.
Service is the cornerstone of the
postal franchise, and employees
delivered better service across the
board, including our best First-
Class Mail service ever. We set new
performance records in three-day,
two-day, and overnight committed
First-Class Mail service, including a
record 97 percent of local First-Class
Mail delivered overnight in Quarter 3.
Customer satisfaction also increased,
with 93 percent of customers rating
overall Postal Service performance
as good to excellent in Quarter 4, the
highest such score in three years.
The first decade of the 21st century
has been marked by unusual
economic and business volatility
worldwide, which resulted in rapid
swings in Postal Service mail volume,
including the worst mail decline in our
history. Mail volume fell by 9.5 billion
pieces in FY 2008, reflecting
weakness first in the housing and
financial sectors and then spread
throughout our domestic service
portfolio, which comprises more than
99 percent of our total mail volume.
To put this in perspective, this
one-year volume loss is 60 percent
larger than the combined mail losses
recorded from 2000 through 2003,
during economic recession, the
terrorist attacks of 2001 and the
deposit of anthrax-laced letters into
the mail system. It is, in fact, the
single largest volume drop in our
history, exceeding even the record
8 billion-piece loss recorded from
1929 to 1933 during the Great
Depression. It also is troubling that
the mail decline accelerated during
the year, falling by a combined
3.4 billion pieces in Quarters 1 and
2, and by 6.1 billon pieces in the
second half, a nearly 77 percent
increase from the first two quarters.
At the same time that revenues
were flattening, key costs were
rising. During the course of the
year, diesel fuel prices ranged from
$3.04 per gallon to $4.76 per gallon.
This increased costs by more than
$500 million. Fuel prices were not our
Message from the Chief
Financial Officer and
Executive Vice President