U.S. Postal Service to Trim $1.1 Billion From 2007 Budget

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iting strong competition from package carriers UPS and FedEx, as well as the advancement of e-mail and instant messaging, the U.S. Postal Service said it will trim $1.1 billion from its 2007 budget, the Associated Press reported Wednesday.

The cuts include a reduction of more than 40 million work-hours and a 0.5% reduction in overall mail volume, AP said.

The postal service anticipates a loss of $1.6 billion in 2007 after a $3.3-billion escrow requirement mandated by a 2003 federal law, AP said.

Before the escrow requirement, the Postal Service expects a net income of $1.7 billion, resulting from increases in revenue and expenses of 3.2% and 2.6%, respectively, AP reported.

H. Glen Walker, the Postal Service’s chief financial officer, said a pending rate change, labor negotiations and economic uncertainties including fuel prices make the 2007 targets riskier than previous plans, AP said.