USPS

November 20, 2009

WASHINGTON—The U.S. Postal Service today updated the list of retail stations and branches that remain under review for possible consolidation, with only 241 offices still under review.

Unlike most federal agencies, America’s national mail system receives no tax subsidy for operating expenses and relies on the sale of postage, products and services to fund its operations. The Postal Service reported a loss of $3.8 billion at the end of its 2009 fiscal year in October.

“To shore up its finances, the Postal Service is looking at every aspect of its business to economize. Reducing over-capacity in retail and delivery operations is a smart business move. Every effort is being made to maintain and improve customer access to postal services,” said Steven J. Forte, senior vice president, Operations.

Today’s announcement updates a review process begun earlier this summer that initially examined about 3,300 stations and branches in urban and suburban areas across the country, focusing on facilities in relatively close proximity to one another. The process is to determine where consolidations might be feasible without compromising customer access to postal services.

With over 36,000 Post Offices, stations, branches, contract and community post offices, the Postal Service has the largest retail network in the United States. An additional 56,000 locations such as supermarkets, drug stores, and other retailers sell postage and selected postal services. Nearly 18,000 ATMs dispense sheets of stamps. But customers do not have to visit a physical building to purchase products and services; postage can be bought at usps.com and printed on personal computers.

As part of this process, the Postal Service has filed periodic updates with the Postal Regulatory Commission, identifying the retail stations and branches that remain under consideration. The filing does not represent a final decision on consolidation. To date, no facility-specific final decisions have been made as a result of this initiative.

New initiatives also are being undertaken to build revenue, including Flat Rate Priority Mail pricing. If it fits in the box, it ships for one low price regardless of U.S. destination or weight. Another recent revenue building initiative introduced greeting cards to 500 select Post Offices.

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Click here for the list http://www.usps.com/communications/newsroom/stationbranchop.pdf

Source: USPS News

USPS

Postal Service Ends 2009 with $3.8 Billion Loss

2010 Financial Plan Predicts More Losses Next Year

WASHINGTON—The U.S. Postal Service (USPS) today filed its 2009 fiscal year-end financial results, showing a net loss of $3.8 billion for the year — despite cost-cutting efforts resulting in $6 billion in cost savings and a $4 billion reduction in required payments for retiree health benefits. Cost savings reflect a reduction of 40,000 career USPS employees as well as reductions in overtime hours, transportation and other costs. The $4 billion reduction in required retiree health benefit payments was passed into law for fiscal 2009 to allow USPS to maintain fiscal solvency while continuing to provide universal, affordable service to the nation.

Details of 2009 results include:

• Operating revenue of $68.1 billion, compared to $74.9 billion in 2008;

• Operating expenses of $71.8 billion, compared to $77.7 billion in 2008;

• Net loss of $ 3.8 billion, compared to $2.8 billion in 2008; and

• Total mail volume of 177.1 billion pieces, compared to 202.7 billion pieces in 2008, a decline of more than 25 billion pieces, or 12.7 percent.

“Our 2009 fiscal year proved to be one of the most challenging in the history of the Postal Service,” said Chief Financial Officer Joseph Corbett. “The deep economic recession, and to a lesser extent the ongoing migration of mail to electronic alternatives, significantly affected all mail products, creating a large imbalance between revenues and costs.”

Corbett said that USPS responded aggressively to unprecedented mail volume declines and the ongoing recession. “We undertook comprehensive cost-cutting measures across all areas of the organization,” he said. “Most notably, we reduced work hours by 115 million, or the equivalent of 65,000 full-time employees — a larger number than the entire workforce at more than 80 percent of Fortune 500 companies today.”

Several significant accruals in the year increased the 2009 net loss by $1.7 billion but did not affect current year cash flow:

• An increase in estimated Workers Compensation liability of $718 million, primarily to reflect lower interest rates;

• An increase in estimated deferred revenue recognition on prepaid postage of $756 million, primarily based on newly-available data on customer purchases and use of stamps; and

• Accrued retirement incentives of $197 million for 13,400 employees who applied for the incentive prior to Sept. 30, 2009.

In its report on the financial statements contained in the Postal Service’s 2009 report, independent auditor Ernst & Young issued an unqualified audit opinion, but emphasized that questions remain about the ability of the Postal Service to generate sufficient liquidity to make all of its payments, including the $5.5 billion retiree health benefits payment due on the last day of 2010. “There is significant uncertainty as to whether the United States Postal Service will have sufficient liquidity to make this payment on Sept. 30, 2010,” the opinion stated.

The Postal Service will file its 2010 Integrated Financial Plan later this week, outlining plans and goals for the coming year. While further revenue losses and mail volume declines are expected, Potter said USPS will continue to move aggressively to meet the challenges posed by the current economic downturn.

“We realize our customers are facing the same economic challenges,” said Potter. “That’s why we are not raising prices on First-Class Mail, Standard Mail and our other market-dominant products in 2010,” he said.

The 2010 plan, which estimates a revenue decline of $2.2 billion, a net loss of $7.8 billion, cost reductions of more than $3.5 billion and a reduction in mail volume of 11 billion pieces for the year, is based on the assumption that there will be no change in the number of delivery days per week, and no change in the current retiree health benefits payment schedule.

“We’re grateful to Congress and the Administration for the necessary 2009 adjustment to our retiree health payment,” said Postmaster General John Potter. “This was a welcome and much-needed change to assure that the Postal Service was able to meet all of its obligations at the end of the fiscal year and over the course of 2010.” Potter stated, however, that the Postal Service faces “a sobering reality” of the same problem in 2010 and every year in the near future. “As volume contracts and we struggle to match the costs of an expanding delivery network with revenues received, it’s clear that long-term success requires fundamental, legislative change,” he said.

Potter said that legislation must address “the impossible demands” of prefunding future retiree health benefits at current levels of more than $5 billion annually; the barriers to matching delivery frequency with declining mail volumes; and the ability to leverage the Postal Service’s logistics, distribution and retail networks to create new revenue streams.

“In 2010 we will engage our customer and business partner stakeholders, the Administration and Congress, and the American people in a dialogue to determine a more financially sustainable future,” said Potter. “The Postal Service remains a vital driver of the American economy and an integral part of every American community.”

Copies of the 2009 financial results are available on the Annual Reports page of the Postal Service website, usps.com, at: 

http://www.usps.com/financials/ar/welcome.htm#10k

2009 USPS Form 10K (PDF) may be found here:

http://www.usps.com/financials/_pdf/FY_2009_10K_Report_Final.pdf

Source: USPS

USPS Customer Satisfaction

November 13, 2009

Postal Customer Satisfaction Score Reaches Four-Year High
New Customer Experience Measurement System Debuts for 2010

WASHINGTON—Despite continuing economic challenges, the Postal Service (USPS) continues to deliver high levels of service, with 94 percent of customers surveyed rating USPS as “excellent, very good or good” in the period July 1 to Sept. 30, 2009.

“Customer service and satisfaction are always our priorities,” said Postmaster General John Potter. “The Postal Service remains focused on its mission to provide universal, affordable service to all Americans.” Potter said he is pleased with the 94 percent rating — the highest in four years — and USPS will build on the achievement to reach even higher levels. Prior to the 94 percent rating, USPS received a 93 percent rating of “excellent, very good or good” for five consecutive quarters.

“We will continue to improve service,” Potter pledged. “In fact, we have implemented an even more demanding service measurement system that will allow us to see more easily where we need to focus improvement efforts,” he said.

USPS is implementing the new Customer Experience Measurement (CEM) program, effective with the start of fiscal year 2010, replacing the Customer Satisfaction Measurement program that has been in place since 1991.

CEM is designed to evaluate the total customer experience, from the buying process through service quality. Insights and information from the new measurement system will allow the Postal Service to pinpoint areas of improvement as well as better adjust to changing customer needs. The new system will allow USPS to collect and analyze data from customer surveys and other sources for a more detailed view of customer feedback.

“CEM will help the Postal Service better understand our customers’ perspective,” said Vice President and Consumer Advocate Delores Killette. “By measuring customers’ experiences across all contact points, the Postal Service will build stronger customer relationships and become a more customer-focused organization.”

Killette introduced the new system at today’s Board of Governors meeting, along with the fourth-quarter national performance scores. In addition to the 94 percent customer satisfaction rating, other highlights of on-time mail delivery scores are:

•96 percent for Single-Piece First-Class Mail overnight delivery for the fourth consecutive quarter
•95 percent for two-day delivery, up 1 percentage point over last quarter
•94 percent for three-to-five-day delivery, up 1 percentage point over last quarter.

Other Board Matters

Also at today’s board meeting, Louis Giuliano was elected chairman and Thurgood Marshall, Jr., was elected vice chairman of the board. Giuliano previously served as vice chairman and was appointed a governor by President George W. Bush in 2004. He is former CEO and President of ITT Corp., where he was responsible for leading the creation of a strategic vision and an effective operating strategy for this Fortune 500 global-industrial company. Marshall, an attorney in Washington, DC, and former member of the Clinton Administration White House senior staff, was appointed a governor by President Bush in 2006.

In his opening remarks, Postmaster General Potter noted that this was the first open session board meeting since legislation passed that lowered the Postal Service’s 2009 payment to the Retiree Health Benefit Trust Fund by $4 billion. Potter said the Postal Service is grateful to Congress and the Administration for the welcome adjustment. “However, we must recognize that the Postal Service faces the same problem again this year and every year in the near future as volume contracts and we struggle to match the costs of an expanding delivery network with revenue received,” he said. “It is clear as we move into 2010 that long-term success will require fundamental, legislative change.”

The USPS Integrated Financial Plan for 2010 will be released next week, as will the Postal Service’s 2009 end-of-year financial results.

The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations.

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Please Note: For broadcast quality video and audio, photo stills and other media resources, visit the USPS Newsroom at www.usps.com/communications/newsroom/welcome.htm.

A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation, 150 million residences, businesses and Post Office Boxes. The Postal Service receives no tax dollars. With 36,000 retail locations and the most frequently visited website in the federal government, the Postal Service relies on the sale of postage, products and services to pay for operating expenses. Named the Most Trusted Government Agency five consecutive years and the sixth Most Trusted Business in the nation by the Ponemon Institute, the Postal Service has annual revenue of more than $68 billion and delivers nearly half the world’s mail. If it were a private sector company, the U.S. Postal Service would rank 26th in the 2008 Fortune 500.

2010 USPS Pricing

November 13, 2009

USPS last week announced prices for Priority Mail service will change Jan. 4, 2010. Customers also can look forward to several Priority Mail innovations.

In a first for the shipping industry, the Postal Service is introducing cubic volume-based pricing for high-volume commercial Priority Mail shippers. Customers who ship small dense, space-efficient packages will receive a financial incentive through a new, tiered pricing option, encouraging more efficient and greener shipping.

Other benefits for Priority Mail customers effective in January include a decrease in the domestic Priority Mail Flat Rate Envelope retail price from $4.95 to $4.90. The popular Priority Mail Small Flat Rate Box will continue to be one of the best consumer values in the domestic shipping market at under $5. Its 2010 price will remain at $4.95.

Cubic volume-based pricing will not be the only first in January for customers who qualify to ship at Commercial Plus prices. A Priority Mail half-pound price, based on distance, will be added only in the Commercial Plus pricing category. And a new Priority Mail Flat Rate padded envelope measuring 9.5-by-12.5 inches will be available exclusively for Commercial Plus shippers.

In addition to an overall average price increase of 3.3 percent for Priority Mail, there will be new prices for Express Mail, Global Express Guaranteed, Express Mail International, Priority Mail International, Parcel Select and Parcel Return Service, also effective Jan. 4.

Prices for First-Class Mail, Standard Mail, Parcel Post and other mailing services products will not change in 2010. The cost of a First-Class Mail stamp will remain at 44 cents.

Customers who pay for their shipping services online will continue to save compared to retail prices. Online costs will be, on average, 5 percent less than retail for Express Mail and 5.7 percent less for Priority Mail services. Online savings for international shipping will be 10 percent less than retail for Global Express Guaranteed, 8 percent less for Express Mail International and 5 percent less for Priority Mail International.

USPS has submitted all new prices and products to the Postal Regulatory Commission for its review.

Click here for a complete listing of 2010 prices. And look for more information next month in Postal Bulletin.

Source: USPS.com

GAO Study

November 5, 2009

Why GAO Did This Study

The U.S. Postal Service’s (USPS) financial condition and outlook deteriorated significantly during fiscal year 2009. USPS was not able to cut costs fast enough to offset declining mail volume and revenues resulting from the economic downturn and changing mail use. Facing an unprecedented cash shortfall, USPS stated that it would have insufficient cash on hand to make its mandated $5.4 billion payment to prefund postal retiree health benefits that was due by the end of the fiscal year.

WHAT GAO FOUND

USPS’s financial condition for fiscal year 2009 and its financial outlook continue to be challenging:
• In fiscal year 2009, mail volume declined about 28 billion pieces, or about 14 percent, from the prior fiscal year, when volume was about 203 billion pieces; revenue declined from about $75 billion to about $68 billion.

• A looming cash shortfall necessitated last-minute congressional action to reduce USPS’s mandated payments to prefund retiree health benefits by $4 billion. In the absence of congressional action, USPS was on track to lose about $7 billion.

• USPS debt increased at the end of fiscal year 2009 by the annual statutory limit of $3 billion, bringing outstanding debt to $10.2 billion. At this rate, USPS will reach its total $15 billion statutory debt limit in fiscal year 2011.

• USPS projects annual deficits over $7 billion in fiscal years 2010 and 2011, and continuing large cash shortfalls.

Read This GAO Report (PDF)

October 10, 2009

To Postal Service Customers:

Many of you have expressed concerns regarding mailing costs for 2010.  The tough economic climate has presented significant challenges to all of us and pessimistic speculation has suggested that postal prices could increase by as much as 10 percent.

As we begin a new fiscal year and as many of you, our business clients, are preparing your 2010 operating budgets, we want to end all speculation.

The Postal Service will not increase prices for market dominant products in calendar year 2010.

Simply stated, there will not be a price increase for market dominant products including First-Class Mail, Standard Mail, periodicals, single-piece Parcel Post.  There will be no exigent price increase for these products.

This is the right decision at the right time for the right reason.  Promoting the value of mail and encouraging its continued use is essential for jobs, the economy, and the future of both the Postal Service and the mailing industry.

While increasing prices might have generated revenue for the Postal Service in the short term, the long term effect could drive additional mail out of the system.  We want mailers to continue to invest in mail to grow their business, communicate with valued customers, and maintain a strong presence in the marketplace.  Changes in pricing for our competitive products—Priority Mail, Express Mail, Parcel Select, and most international products—are under consideration.  We expect to announce a decision in November.

We are committed to working with customers to find ways to grow the mail through innovative incentives like the Summer Sale and contract pricing.  Mail is the most effective means of communication and advertising and we will continue to work together to increase the value of the mail.  Mail is a smart investment for the future.

National League of Postmasters

 [Letter to members of the National League of Postmasters]

Dear Leaguers,

Recently your National Board met and decided that the League would no longer support the VOE survey. While the intent behind the survey may be good, the fact of the matter is that the work situation for Postmasters continues to deteriorate. In so many districts dignity and respect for PMs have ceased to exist. The Postal Service deliberately does not staff in order to pile workhours on to Postmasters. Reports and logs continue to proliferate, thereby stretching a long day into a longer day. Discipline for trivial reasons continues and micromanagement reduces Postmasters to mindless robots. You may not be suffering personally from any of these situations, but thousands of Postmasters nationwide are. I urge you, in support of Postmasters everywhere, to simply not fill out the survey. This is one report that you are not required to complete. Please spread the word; the more of us who refuse to participate, the louder our voice of the employee will be.

Respectfully,

Charley Mapa
President
National League of Postmasters

USPS

In many ways, fiscal year 2009 will be remembered as one of the most challenging we’ve ever faced. At the same time, it will be seen as one of the most successful.

That success is because of you. You did a tremendous job. Service has never been better — during a year when the service standards have been raised. You helped us reduce costs by over $6 billion, more than anyone could have expected. You stayed focused on the things that matter most. People are noticing.

Your customers heard a lot about the Postal Service in the news — volume was down, revenue was down, and deficits were up. But thanks to you, that didn’t get in the way of their positive experience with the mail. They reacted to what they saw, not what they heard. Customer satisfaction scores started strong and finished the year at record levels. And they rated the Postal Service one of the three most-trusted companies in America — the only delivery company in the top 10.

As we struggle with a harsh economy, we’re taking advantage of new tools to help keep customers in the mail and bring in new business. For larger mailers, we’re offering sales, with encouraging results. For consumers and smaller businesses, Priority Mail Flat Rate Boxes meet a real need, and we’re supporting that with strong advertising. But it was your support — talking it up, selling it, and backing it up with great service — that made the difference.

You’ll be hearing more about other growth initiatives during the coming year. As we roll them out, tell your customers about them and ask them to give them a try.

In a changing marketplace and an economy that’s defied predictions, the only thing we can count on is change. That’s nothing new for the Postal Service. For more than 230 years, we’ve been changing to meet the needs of our customers and the economy. We can do it again — and we will.

I can’t promise that things will get easier in 2010. We’ve been battling the economy for two years. We can’t expect things to turn around overnight.

Our turnaround will take patience and a commitment to the things that make a difference: service, efficiency and knowledge and support of our products and services. And it will take confidence in ourselves and each other. I know we’re up to the task. As you focus on the task at hand, I’ll continue my work with Congress, the Administration, and every postal stakeholder to make the changes we need to make that task easier.

Thank you for all you do to serve the American public.

Jack Potter

USPS ELM

Source: USPS Postal Bulletin – August 27, 2009

Effective immediately, the revision to Employee and Labor Relations Manual (ELM) 546.2, Collective Bargaining Agree­ments; 546.21, Compliance; and 546.23, Types of Appointments, in the article “ELM Revision: Limited Duty and Rehabilita­tion Assignments” published in Postal Bulletin 22213 (8-16-07, pages 7–8) is rescinded.

PEN Editor: Below is a copy of PB 22213 – Pages 7-8 dated 8.16.07 which has now been rescinded. Use your own judgement as to what effects this may have on you or your coworkers.

[Quote from PB 22213 ]

ELM Revision: Limited Duty and Rehabilitation Assignments
Effective August 16, 2007, Employee and Labor Relations Manual (ELM) 546.21, Compliance, and 546.23, Types of Appointments, are revised to incorporate the requirement to comply with the collective bargaining
agreement for the craft to which the employee who was injured on duty is being reassigned or reemployed.

546.2 Collective Bargaining Agreements
546.21 Compliance
[Revise 546.21 to read as follows:]
Reassignment or reemployment under this section must be in compliance with applicable collective bargaining agreements and applicable law. Individuals so reassigned or reemployed must receive all appropriate rights and protection under the National Agreement of the craft to which the
employee is being reassigned or reemployed. Any such assignment or reemployment must be accomplished through Article 13 of the National Agreement applicable to the craft to which the employee is being reassigned or reemployed.

546.23 Types of Appointments
[Revise 546.23 to read as follows:]
Types of appointments available include the following:
a. A current full-time career employee may be reassigned to a full-time career position through Article 13 of the National Agreement applicable to the craft to which the employee is being reassigned or reemployed, if his or her job-related medical condition permits.

b. A current or former part-time flexible career employee may be reassigned or reemployed to a part-time flexible career position through Article 13 of the National Agreement applicable to the craft to which the employee is being reassigned or reemployed.

c. A current or former noncareer employee may be reassigned or reemployed to the position held previously or, upon satisfactory demonstration of the ability to meet the job requirements and in accordance with the appropriate collective bargaining agreement, may be reassigned or reemployed to another noncareer position or, noncompetitively converted to a career position (NOA 501). Approval for conversion actions from noncareer to career must be approved by the manager of Health and Resource Management at Headquarters prior to any PS Form 50 action.

[End Quote of PB 22213]

See PB 22213

USPS

August 25, 2009

A LETTER TO ALL EMPLOYEES FROM PMG JACK POTTER

While the Postal Service has had its share of challenges since the beginning of the current economic recession, I want to let you all know what an outstanding job you have done to meet those challenges. We have been very successful in implementing unprecedented cost-cutting and efficiency improvements in a relatively short time frame. We have also maintained high levels of end-to-end service performance and customer satisfaction during this period. You should take great pride in these achievements.

We have relied on natural attrition and the use of voluntary early retirement (VER) to reduce the size of our bargaining unit workforce. Unfortunately, we are projecting additional declines in mail volumes next year and therefore need to accelerate the pace of operational change to bring our costs in line with revenues.

We have an opportunity to improve efficiency in mail processing operations in plants and Post Offices around the country while maintaining very high levels of service. We met with the leadership of the American Postal Workers Union (APWU) and National Postal Mail Handlers Union (NPMHU) to discuss alternatives to achieve operational changes with the least amount of disruption to impacted employees. We concluded that a one-time cash retirement incentive was the best first step in the operational transition. The subsequent negotiated agreement creates an opportunity for select full-time employees to receive a $15,000 incentive to retire or resign. The $15,000 incentive will be paid in two installments, depending on retirement or separation date. Most employees will receive $10,000 in November 2009 and $5,000 approximately one year later.

With some exceptions, all full-time, part-time regular, and part-time flexible career employees who are represented by the APWU and the NPMHU, and who are eligible for optional or early retirement as of Oct. 31, 2009, will begin receiving annuity information at their home over the next few days. We hope as many of you as possible will take advantage of this opportunity. Although we don’t have the deep pockets to make a more generous offer, we believe this one-time incentive is a good value for those who are considering retirement.

Employees who receive this incentive offer will want to take the opportunity to consider their financial security and life beyond the Postal Service and consult with their family and friends. Those who accept the offer should know, as we all do, that even in retirement they will remain valued members of our extended Postal Service family.

This incentive offer is also an important step among the many we have been making recently as we seek to make structural changes in the way we do business. As an organization, we must continue to improve efficiencies and be responsive to a changing marketplace. Every employee plays a vital role. Your continued hard work and dedication to the Postal Service help inspire the confidence of our customers to choose the Postal Service as their preferred business partner and means of communication.

Thank you again for your continued dedication.

Jack Potter

Click here for more information on this one-time incentive.

Click here to view PMG letter.