In 2003, volume declined slightly from 202.8 to 202.2 billion pieces, as volume increases in some categories of mail were more than offset by volume decreases in other categories. Growth was concentrated in low-margin Standard Mail volume. High margin First-Class Mail and Priority Mail volumes declined. This year, largely because the effects of September 11, 2001 and the anthrax attacks had dissipated, volume declined less than in 2002, when it dropped by 4.7 billion pieces. The state of the economy and uncertainty surrounding the war with Iraq acted as a continued brake on growth, however.

First-Class Mail volume fell 2.4 percent in 2003, following a decline of 1.2 percent in the previous year. The continuation of a long term decline in First-Class Mail single-piece volume underlies this decline. E-commerce and e-mail are being substituted for personal correspondence and hard copy commercial transactions that formerly traveled as First- Class Mail single pieces. In 2003, the Postal Service also experienced the first ever annual decline in workshared First-Class Mail volume (see Graph 2-1).

     Some of the current decline in workshare mail relates to the weakness of the economy, but the decline was also related to the absence of new hard-copy billing and statement applications and electronic diversion of bills and statements. In 2004, total First- Class Mail volume is projected to decline 1.6 percent, continuing the slide it experienced in 2003. The decline will slow toward the end of the year, largely due to economic recovery, but any volume growth should be transitory,