The Path Forward: State & Future of the Postal Service
Dale KennedyConsumer & Industry Affairs
May 2, 2014
Cleveland Postal Customer Council
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158.4 billion pieces delivered to 153 million addresses
Postal Service is part of a $1.3 trillion mailing industry employing approximately 8.4 million people
A healthy, financially viable USPS is vital to U.S. economy
We Thank YOU for your business and contribution to the USPS and the mailing industry
Mailing Industry is Critical
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Stronger Together
The Postal Service recognizes and understands:
the value of the PCCs and its members
the value of the efforts you put into the PCCs to make them so successful
the expertise, guidance, and feedback you provide to your fellow PCC members and to the USPS
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Stronger Together
Our collective success depends on meeting our customers’ needs as:
expressed individually
through group forums such as the PCC
maximizing the long standing partnership between the PCC network and the USPS
Industry Associations
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Stronger Together
Customers and USPS have similar goals
Delivery of timely, actionable messages
Innovative, exciting mail offerings
Recognition of mail as a valued communication tool
A financially viable mailing system
• Liabilities exceed assets by approx. $40 billion
• The USPS has only 36 cents of assets to cover each dollar of its liabilities
Financial Hole
• Under multi-employer accounting rules, there are approximately $50B in obligations not shown on the balance sheet.
Significant profits over years and legislation are needed to recover.
Unrestricted Cash $ 3.8B Retiree Health Benefits $18.1B
Buildings & Equipment, $17.2B Workers' Compensation $15.9Bnet of depreciation
Debt $15.0BOther Assets $ 1.8B
Accrued Compensation, $ 4.9Bbenefits, and leave
Deferred Revenue $ 3.8B
Other $ 5.3B
Total Assets $22.8B Total Liabilities $63.0B
ASSETS LIABILITIES
Revenue & VolumeFY13 Feb YTD vs. FY14 Feb YTD
$ Millions
-2.0%
+12.2%
+1.9%
-0.1%
-5.7%
Volume: - 4.5%
Volume: + 9.5%
Volume: - 1.5%
+2.8%
+1.7%
®
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Disproportionate amount of Standard Mail is scheduled for delivery on Monday resulting in:
Service Variability
Operational Inefficiencies
Increased Cost
Load LevelingLoad Leveling
Load Leveling is a Business Imperative for Change
Impact on Delivery – Average % of Standard Mail Delivered by Day
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
SAT SUN MON TUE WED THU FRI
Del
iver
y D
ay V
olu
mes
DSCF Standard Flats DSCF Standard Letters
12.6%
Qtr 1, FY 2013
42.4%
13.0%
5.2%
16.3%
10.5%
35.4% Standard Letters
52.4% Standard Flats
Monday Delivered Volume
Load Leveling Load Leveling Current StateCurrent State
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Load Leveling Load Leveling 24 Hour Clock Impact24 Hour Clock Impact
Disproportionate Monday workload impacts critical 24 hour clock parameters resulting in:
Late processing
Late / missed transportation
Service failure
Additional processing / transportation costs
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Standard mail dropped at a DDU
Standard mail dropped at a NDC
EDDM - Retail
Periodical/Newspaper processing
First-Class Mail processing
Priority Mail processing
Load Leveling Expected Days of Delivery
Load Leveling Expected Days of Delivery
What stays the same:
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Current Proposed
Thursday Friday, Saturday, Monday Friday, Saturday, Monday
Friday Saturday, Monday Saturday, Monday, Tuesday
Saturday Monday, Tuesday Monday, Tuesday, Wednesday
Sunday Monday, Tuesday, Wednesday Monday, Tuesday, Wednesday
*The current Critical Entry Time (CET) for Standard mail is 4 pm
**For delivery in the continental United States
DSCF Standard Mail**Dropped Before 4pm* on
DELIVERY DAYS MEETING SERVICE STANDARD
Load Leveling Expected Days of Delivery
Load Leveling Expected Days of Delivery
Scope of Limited Change:
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Load Leveling Load Leveling South Jersey TestSouth Jersey Test
Test Location – South Jersey P&DC (First Lean Mail Processing Plant)
Test Period – Sep 12th through Sep 26th, 2013
Delivery Zones Participating: 110
Delivery Routes Participating: 1,190
Scope: Evaluated the impact of load leveling the Standard Mail volumes received at the South Jersey P&DC across the days of the week
Standard Mail Volume in Evaluation: 5.3M pieces
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Load Leveling Load Leveling Results SummaryResults Summary
Efficiency Reduced Total Weekly City Carrier Work Hours
Reduced Carrier Overtime and Penalty Overtime Usage
4.9% reduction vs Baseline Period
35.1% reduction vs Baseline Period
Employee Satisfaction Overwhelmingly positive feedback
Management and Craft
Customer Service Improved Carrier Return Times
74% reduction in Monday’s carriers returning after 1700
Improved On-Time Service Performance 96.00% on-time performance achieved
Load Leveling Load Leveling Next StepsNext Steps
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Review Comments to Proposed Rule – Feb 13, 2014
Publish Final Rule: February 28, 2014
Implement Change no Earlier Than March 27, 2014
Receive PRC Advisory Opinion
Add Additional Sites to Test Implementation Approach
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Full-Service Intelligent Mail Barcode (Imb) and Intelligent Mail Package Barcode (Impb)
April 2013 - USPS announcement letters/postcards/flats Full-Service IMb requirements by January 26, 2014 to qualify for automation rates
November 2013 - PRC ruled that the Postal Service’s IMb requirement constituted a rate increase and subject to a price cap
January 2014 - USPS filed request with US Court of Appeals for review of PRC decision
USPS remains committed to 100 percent Full-Service IMb adoption as an effective way to enhance the value of mail
Package IMpb implemented January 26, 2014 and becomes mandatory January 25, 2015
Status of IMb and IMpb
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Package Growth Initiatives
Improved tracking language on usps.com
More real time scanning equipment
Sunday delivery
Same Day Delivery
Package Services Initiatives
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March 16-19, 2014
Gaylord National Harbor
Washington DC
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Extensive Educational Opportunities - Over 150 workshops and Executive USPS led sessions.
Exhibit Hall - Connect with 88 suppliers and industry leaders and to learn about NEW products, applications and services.
Networking - the key to growing business and making things happen!
NPF Overview
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NPF Accomplishments
* Preliminary Data, April 2014
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Overall Rating
Workshops
PMG Keynotes
Key Sunday Session
NPF Accomplishments
* Preliminary Data, April 2014 21
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Inclined to expand business
Exhibit Hall
NPF Accomplishments
Receptions% found valuable
* Preliminary Data, April 2014
Reasons to attend
% very important
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NPF Current Status
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NPF Next Steps
May 17-20, 2015 Anaheim, California
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Questions?