Postal Service Faces Rare Year of Red Ink

With a month left in the fiscal year, the Postal Service is facing its first money-losing performance since 1994. Postmaster General William Henderson said that the agency could be as much as $300 million in the red when the books are tallied at the end of September. Henderson said that there has been a decline in first-class cards and letters and that the agency has faced a series of unexpected costs. He said the decline was not a diversion to other forms of communication, such as the Internet or e-mail. On the plus side, however, he said advertising mail has increased 5%. It had dropped last year as enthusiasm grew for Internet sales, but that market has not expanded as fast as businesses had expected and they have returned to advertising mail, Henderson said.