Postal TrendWatch — Q4 2007

As of September 30, 2007, the Postal Service completed its first full quarter operating under its new rate structure, which was implemented on May 14, 2007. In a continuation of previous trends, First Class Mail volume declined, while Standard Mail volume increased.

Meanwhile, USPS’s year-end reports revealed significant financial setbacks, which the Service attributed to benefit-funding requirements of the Postal Accountability and Enhancement Act. Given the 10-year duration of those funding requirements, this problem is likely to continue. As a result, the Postal Service will need to continue increasing productivity and cutting costs to meet this requirement under the law’s new rate-cap provisions.

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