Postal Service ends year $1.7 billion in the red; economy, competition blamed

WASHINGTON (AP) _ The Postal Service ended its fiscal year $1.7 billion in the red. <br><br>Chief financial officer Richard Strasser blamed the loss on the declining economy and increased competition.

Tuesday, December 4th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) _ The Postal Service ended its fiscal year $1.7 billion in the red.

Chief financial officer Richard Strasser blamed the loss on the declining economy and increased competition.

In addition, he noted Tuesday that the terrorists attacks of Sept. 11 had caused a reduction in mail volume.

The loss was for the 12 months that ended Sept. 30. The anthrax attacks through the mail began later and will result in additional costs to the agency, Strasser said.

He told the postal Board of Governors that the agency ended the fiscal year with revenues of $65.8 billion and expenses of $67.5 billion.

At one point during the year the post office had anticipated a loss of $2 billion or more and made cuts in hours worked and other costs in order to reduce the losses.

The postal service has applied for an increase in stamp prices to take effect next year, which would raise the price of a first-class stamp by 3 cents, to 37 cents.

Postal board chairman Robert Rider said the agency is exploring all options to meet the expected additional expenses without further increases in rates.

After making a profit for five straight years, the service recorded a $199 million loss in the fiscal year that ended Sept. 30, 2000. First-class postage rates were increased one cent in 1999 and one cent in 2001.

The post office has asked Congress for additional funds to help cover expenses from the terrorist attacks and is waiting for a response from the House and Senate.

Postmaster General John Potter said that without the sharp drop in mail volume that occurred after Sept. 11, the loss for the fiscal year would have been reduced by $200 million to $300 million.

The last several weeks ``have been the most difficult in our history,'' Potter said.