The Postal Service revenue only comes from the customers that use the postal services. So, this is just a business like all the other businesses.
Unfortunately this will also force the Postal Service to frequently raise the current postage rates in order to cover the unexpected increases in the costs and to sustain the high quality level of the postal service. As Postal Service officials say, the company managed to save about $8.3 billion over last three years and new current postage rates increase in price are not expected until year 2006.
Their strategy is to focus only on productivity. In this way, they have managed to reduce the total work hours by a cumulative 728 million since year 1999.
As the official statistics say, the career postal employment now is virtually at the same level it was in 1984, just over 700,000, while mail volume has increased by 65 billion more pieces to an additional 48 million new addresses. This seems to be quite an effort and reveals true concerns to higher efficiency and productivity and keep current postage rates current.
Current postage rates, this year the postal service will not increase any price. Instead it is planning to obtain a special reduction of 23 million work hours that will allow cost savings of almost $1.4 billion.
The numbers are very impressive as long as industry analysts predict some major decline in first-class mail volumes and higher fuel costs.
Despite these economical threats the postal service will continue to operate solely from revenue generated from current postage rates, and it’s own products and services.