Postal Service’s Net Income Falls in Fiscal 2005

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he U.S. Postal Service's net income fell 55% in fiscal year 2005 due to rising costs, but it paid off all its debts, Bloomberg reported.

The USPS is now debt-free for the first time since its reorganization in 1971. It is raising its rates 5.4% starting Jan. 8 to cover a retirement fund account and other costs, Bloomberg said.

The postal service’s net income fell to $1.4 billion for the year ended Sept. 30, from $3.1 billion a year earlier. Operating revenue rose 1.3% to $69.9 billion.

Overall costs for fuel, health and retirement benefits and cost-of-living adjustments helped push costs up 5% in the year, the postal service said.

It made deliveries to 2 million new addresses in the year, which also added to costs.

The coming year will be "challenging,"Chief Financial Officer Richard Strasser told reporters in Washington, Bloomberg reported.