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Air Transportation Air transportation expenses for 2005 were $2,445 million, an increase of $260 million over 2004. This increase is primarily due to increased fuel charges as well as increased mail volume and contractual rate increases for our dedicated air transporter. During 2005, the index by which jet fuel costs are adjusted for our dedicated air carrier increased 50.1%, resulting in an increase in fuel costs of approximately $83 million. Increased mail volume added an additional $26 million in fuel costs. Air transportation expenses decreased by $68 million in 2004, in spite of increased fuel charges as well as increased mail volume and contractual rate increases for our dedicated air transporter. We were able to offset these increases in two ways. During our peak holiday season, we significantly reduced the number of dedicated airplanes formerly used to move mail. This saved us approximately $54 million. We also moved more mail through the dedicated air network reducing charges from other commercial air carriers by $92 million. During 2004, the index by which jet fuel costs are adjusted for our dedicated air carrier increased 6.34%, resulting in an increase in fuel costs of approximately $10 million. Increased mail volume added an additional $7 million in fuel costs. Highway Transportation Highway transportation expenses increased by $235 million in 2005 as fuel prices and volumes increased. Diesel fuel used by our highway contract routes rose $102 million, while increased volumes and usage of highway transportation added another $137 million in expense over 2004 totals. Highway transportation expenses increased by $30 million in 2004. This was primarily due to increasing prices for diesel fuel used by our highway contract routes which increased $31 million. Other Transportation Other transportation expenses decreased by $27 million in 2005 primarily as a result of our decision to reduce the use of rail to transport mail and shift this mail onto highway routes. This was done as a result of the higher service performance scores that our highway contractors were achieving. For 2004 Other transportation expenses increased $18 million. This was due to increases in international terminal dues of $21 million. |
(Dollars in millions) % Change
Aviation Security On October 18, 2005, the President signed into law the 2006 Homeland Security Appropriations Act (P.L.109-90) which includes language directing the Department of Homeland Security (DHS) to triple the amount of cargo that is screened before being placed on commercial airlines, a requirement which had previously been included in the 2005 version of the appropriations bill. The law also requires DHS to strengthen the Transportation Security Administration’s (TSA) known shipper program, which targets cargo from shippers unknown to the carrier. P.L.109-90 also directs TSA to utilize existing technology for checking passenger baggage for explosives to screen cargo "to the greatest extent practicable." The Postal Service will continue to monitor and communicate with TSA as it implements these legislative mandates. Lawmakers continue to be concerned about cargo and aviation security. Additional legislation in the 109th Congress has been introduced to establish an air cargo security inspection program, which would be required to use equipment, technology, and personnel to inspect cargo that, at a minimum, meet the same standards established to inspect passenger baggage. This would require all cargo to be screened, a stricter requirement than P.L.109-90. Mail is considered air cargo for these purposes. Issues surrounding air cargo security legislation include the requiring of proper equipment for effective screening, and the increased time and expenses associated with cargo inspections. |