	U.S. I will also discuss other major postal oversight issues related to work that we have completed during the past year. Overview of Financial and Service Delivery Performance

The Service has continued to report improvements in the areas of financial and service delivery performance and has undertaken a number of initiatives to respond to the four major challenges that we identified. And, although the Service has made progress and is continuing to make significant changes, time appears to be growing short for the Service to successfully address these challenges so that it can sustain and improve current performance levels and remain competitive into the 21st century. The Service and other stakeholders agree that growth in the Service’s core business of delivering First-Class Mail has already been affected by the rapid growth of the Internet, electronic communications, and electronic commerce. appears to be on track for achieving record delivery service performance for this year. Challenges Facing the Service

We have identified four major challenges facing the Postal Service as the 21st century quickly approaches:  (1) maximizing performance in the face of increasing customer demands and choices, (2) managing employees— the Service’s most valuable asset—to maximize attainment of agency goals and continuous improvement of employee performance, (3) maintaining financial viability by controlling costs and enhancing revenues, and (4) adapting to a rapidly changing communications and delivery environment with a growing number of competitors. Therefore, we are recommending that the Postmaster General report to the congressional oversight subcommittees on the actions taken and planned to improve the quality of data used in ratemaking.
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed the U.S. Postal Service's (USPS) financial position and delivery performance.

What GAO Found

GAO noted that: (1) USPS may be nearing the end of an era; (2) during the past 5 years, USPS has made notable improvements in its financial position and delivery performance; (3) USPS has recorded positive net income and has maintained or improved the overall delivery of certain specific classes of mail; (4) however, USPS expects declines in its core business in the coming years; (5) the growth of the Internet, electronic communications, and electronic commerce has the potential to substantially affect USPS' mail volume; (6) as a result, USPS may experience growing difficulty in maintaining its position in a dynamic communications and delivery environment; (7) these developments make it imperative for USPS to resolve four long-standing performance challenges which include: (a) maximizing performance; (b) managing employees; (c) maintaining financial viability; and (d) adapting to competition; (8) GAO is highlighting the need for USPS to take action to address long-standing issues related to the quality of data used in ratemaking and recommending that the Postmaster General report to congressional oversight subcommittees on the actions taken and planned in this area; (9) in recent years, USPS has progressed in addressing various challenges and is continuing to initiate significant changes that respond to the challenges; and (10) however, as long as USPS stands on the brink of the twenty first century, time appears to be growing short for USPS to successfully address its challenges so that it can sustain and improve current performance levels and remain competitive in a rapidly changing communications environment.