2. DOMESTIC TRANSPORTATION
a. Air Transportation

Air transportation costs in 2002 totaled $1.9 billion, an increase of 3.6 percent over the prior year. These costs include the use of commercial airlines (passenger and freight) and dedicated networks. The Postal Service contracted to move more than 2.54 billion pounds of domestic mail last year. Since the attack on America, the Postal Service has not been able to transport mail pieces 16 ounces or greater on commercial airlines. This resulted in dramatically lower volumes flown on commercial airlines and higher volume on the FedEx network. The alliance with FedEx has addressed transportation requirements for significant portions of Express Mail and Priority Mail and lesser amounts of First-Class Mail. Also, additional dedicated air taxis to domestic, off-shore destinations such as Hawaii, Alaska and Puerto Rico were required.


b. Rail Transportation

Postal Service expenses for all rail transportation were $228 million for 2002. This represents a 4.9 percent decrease from 2001. In 2002 the Postal Service paid Amtrak $85 million for rail transportation service. The majority of service provided by the Amtrak transportation network is for Periodicals mail. Additionally, the Postal Service spent $141 million with eight other railroads that perform service on rail segments throughout the country.


c. Highway Transportation

The Postal Service expended approximately $2.4 billion for highway mail transportation in 2002. This 2.7 percent increase over 2001 was caused by the realignment of two- and three-day service, which resulted in mail being diverted from air carriers to service-responsive surface transportation.


e. Domestic Water Transportation

In 2002, the cost of transporting mail to domestic offshore destinations was $25 million, a 2.7 percent decrease over 2001.