We are potentially subject to various state legislative proposals that could reduce our revenues, increase our costs, or otherwise place additional burdens on our operations.
States continued to introduce Do Not Mail legislation in 2008, with approximately 16 Do Not Mail bills being considered in 13 state legislatures nationwide. (This includes nine bills that were carried over from 2007.) These bills, modeled after the Do Not Call registry, are designed to limit or stop advertising mail from being mailed to households. Currently, none of the state bills have passed; however, a few of the state legislatures may still be in session.
The Postal Service opposes legislation that would limit mailing, or that would interfere with the availability of an affordable, universal postal system. The Postal Service will continue to communicate the value of the mail by building upon its strong environmental record and its work with mailers on offering consumers choice on how to manage their mail. By working aggressively with mailers, marketers, and advertisers, the Postal Service can continue to improve the quality and relevancy of advertising mail.
Should a state pass Do Not Mail legislation, it would result in lost revenue for the Postal Service. A financial analysis conducted by the Postal Service determined that a national implementation of Do Not Mail legislation would place approximately $6 billion of postal revenue at risk annually.
We rely extensively on technology to operate our systems. A significant failure in a material system could impair our reputation for reliable service and adversely affect our results of operations.
We rely extensively on technology to operate our systems for processing and delivering mail. Our intranet is one of the largest maintained by any organization in the world. Any significant failure of these systems could cause delays in the processing and delivering of mail, which could damage our reputation, result in loss of business, and increase costs of operation.
A failure on our part to protect the privacy of information we obtain from our customers could damage our reputation and result in a loss of business.
We receive a variety of private information from our customers, such as address change data. We have implemented a number of safeguards intended to protect the confidentiality of data that we obtain. Any significant violation of the privacy of this data could damage our reputation and result in loss of business.
We are subject to the risk of biohazards and other threats being placed in the mail.
Although we have implemented extensive emergency preparedness measures to keep the mail, postal employees, and postal customers safe from harm due to biohazards that could be introduced into the mailstream, there continues to be a risk of possible biohazard threats. If new biohazards were to arise and our measures were not sufficient to contain or mitigate the threat, our services could be disrupted. This could adversely affect our revenues, require substantial expenditures to address the threat, and could adversely affect our operations and financial condition.
In addition, the U.S. Transportation Security Administration (“TSA”) has adopted new rules enhancing many of the security requirements for air cargo, and has proposed additional requirements. Until the requirements of these programs and their application to us are finalized, we cannot determine the effect that these new rules may have on our costs or our results of operations. These rules or other future security requirements for air cargo could impose material new costs on us.
We are also subject to risks and uncertainties that affect many other businesses, including:
- Market acceptance of our new service and growth initiatives;
- Adverse weather conditions or natural disasters, such as hurricanes, which can damage our property and disrupt our operations;
- International conflicts or terrorist activities and the effects these events may have on our business or our results of operations; and
- Changes in interest rates and foreign currency exchange rates.