Chapter III Financial Highlights

go to the 2001 Comprehensive Statement on Postal Operations front page

B. Productivity

2. TFP: 2001 and the Future Plan
In 2001, the Postal Service achieved a TFP growth of 1.3 percent, the second consecutive year of positive TFP. Output Per Workhour growth in 2001 was 1.7 percent. The growth in TFP in 2001 equated to $870 million in expense reductions. Combining TFP growth for 2000 and 2001 yields TFP growth of 3.7 percent, equivalent to taking $2.5 billion in expenses out of the system.

When compared to other years with strong positive TFP growth, the achievement of 2001 is significant. In previous years, strong TFP growth was driven largely by workload growth. During the 1990's TFP grew at an average rate of 0.2 percent, while workload grew 1.9 percent annually, on average. In 2001, the strong productivity growth of 1.3 percent was achieved through substantial reductions in the use of resources. As workload declined by 0.6 percent, the Postal Service effectively managed its resources to achieve a 1.9 percent decline in total resource use. Labor and materials use declined by 2.3 percent and 3.6 percent, respectively. This achievement followed the significant reductions of 2000, when labor use was reduced by 0.2 percent and materials use by 5.1 percent.

The Postal Service plans to continue to improve TFP over time while meeting the need for continuing service improvements to increase customer satisfaction and remain competitive in the marketplace.

Greetings from Rhode Island

TABLE 3.8 HISTORICAL AND PRESENT-YEAR IMPACT OF CONGRESSIONAL APPROPRIATIONS ON MAIL REVENUE 1971, 1976, 1986, 2001

(dollars in millions)

Year	Total Mail Revenue	Mail Revenue Without Appropriations	Appropriation Category	Income from Appropriation	Appropriation as a percent of Total Mail Revenue


			Deficiency in rates and fees;
1971*	$ 8,752	$ 6,665	and Public Service	$ 2,087	23.8%

1976	$ 12,844	$ 11,199		$ 1,645	**12.8%
			Free and Reduced Rate Mail	725
			Reconciliation for Prior Years	none
			Public Service	920

1986	$ 30,818	$ 30,102		$ 716	2.3%
			Free and Reduced Mail Rate	750
			Reconciliation for Prior years	(34)
			Public Service	none

2001	$ 65,834	$ 65,767		$ 67	0.1%
			Free Mail for the Blind and
			Overseas Voting Material	71
			Reconciliation for Prior years	(4)
			Public Service	none

	* The figures for 1971 are from the old Post Office Department prior to the creation of the Postal Service on July 1, 1971. ** This figure does not include the appropriation for Post Office Department Transitional Costs.

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