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30 | 2008 Annual Report United States Postal Service
Revenue and Volume
On December 20, 2006, the President signed P.L.109-435. In
accordance with that law, the categorization of our products
has been updated to reflect the new Mailing Services and
Shipping Services groupings. For example, First-Class Mail
now also includes First-Class Mail International and is part of
Mailing Services. Shipping Services include Express Mail and
Priority Mail as well as certain services formerly included with
international mail and package services. We have identified
changes in categories in the discussion that follows.
2008 was an extremely difficult year for both the U.S.
economy and the Postal Service. Declining mail volume is a
symptom of the ailing economy. The hard-hit financial sec-
tor of the U.S. economy led decliners not just in the stock
market, but in the mailing arena as well. Operating revenue
for 2008 was $74,932 million, an increase of $154 million
from last year, while volume of 202.7 billion pieces declined
by 9.5 billion pieces, or 4.5%. The volume decline accel-
erated as we progressed through 2008, reaching a peak
decline of 3.2 billion pieces in the fourth quarter.
Revenue for the first seven and a half months of 2008 was
affected by the May 2007 price increase of 5.4%. The re-
mainder of the year was affected by the May 2008 price
increase of 2.9%. Although the volume decrease in 2008
was significant, the price increase held revenue flat com-
pared to 2007.
Operating Revenue 2008 2007 2006
(Dollars in millions)
First-Class Mail $ 38,179 $ 38,405 $ 37,605
Standard Mail 20,586 20,779 19,876
Periodicals 2,295 2,188 2,215
Package Services 1,845 1,812 1,751
Other Mailing Services* 3,645 3,720 3,715
Total Mailing Services 66,550 66,904 65,162
Total Shipping Services 8,382 7,874 7,488
Total Operating Revenue $ 74,932 $ 74,778 $ 72,650
* Special services revenue and other income included in “Other” category.
2008 Mail Revenue
27%
52%
11%
10%
First-Class Mail 52%
Shipping Services 11%
Standard Mail 27%
Other Mailing Services 10%
2008 Mail Volume
45%
49%
5%
1%
First-Class Mail 45%
Shipping Services 1%
Standard Mail 49%
Other Mailing Services 5%
The current recession has had an adverse effect on adver-
tising mail, particularly with regard to credit card, mortgage,
and home equity solicitations. While the trouble in the fi-
nancial services sector is routinely making headlines, we
have also experienced noteworthy declines from mail order
catalogue retailers, printing and publishing businesses, and
the services sector.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations