The Postal Service’s mission is to provide the nation with reliable, affordable, universal mail service. The basic functions of the Postal Service were established in 39 U.S.C. § 101(a): “. . . to bind the Nation together through the personal, educational, literary, and business correspondence of the people. It [the Postal Service] shall provide prompt, reliable, and efficient services to patrons in all areas and shall render postal services to all communities.” The Postal Service delivers to more than 149 million addresses six days a week, and picks up pre-paid letters and packages at the time of delivery. It provides mailing and shipping services through more than 36,000 retail outlets and through its Web site, usps.com.
For stakeholders interested in the Postal Service, the annual Comprehensive Statement on Postal Operations and the Annual Report describe Postal Service actions and results. The Comprehensive Statement is a broad summary of customer, employee, and operations-focused developments from the past fiscal year. The Annual Report focuses on Postal Service finances and financial results. A third document, Vision 2013, is the Postal Service’s five-year strategic plan for 2009–2013. All three documents are available at usps.com/about.
The Postal Service has filed the annual Comprehensive Statement since 1976 in accordance with 39 U.S.C. 2401(e), which prescribes its contents. Chapter 1 addresses the postal mission and legislative developments. Chapter 2 focuses on customers and services. Chapter 3 discusses the postal workforce and employee-related programs. Chapter 4 describes operations. Chapter 5 contains the Postal Service’s performance report for 2008 and its plan for 2009, as required by the Government Performance and Results Act. All references to years, unless otherwise stated, refer to fiscal years beginning October 1 and ending September 30.
The Year in Review
2008 was a difficult year for both the U.S. economy and the Postal Service. Total mail volume was 202.7 billion pieces, a decline of 9.5 billion pieces, or 4.5 percent. The rate of decline accelerated throughout 2008 as the economy weakened. This result is largely a symptom of the ailing economy. The hard-hit financial sector of the economy led declines not just in the stock market, but in mail volume as well. Economic difficulties also contributed to reduced volumes from other mailers, including catalogue retailers, printing and publishing businesses, and the services sector.
First-Class Mail volume decreased by 4.6 billion pieces, or 4.8 percent. The largest volume decline occurred in single-piece First-Class letters, part of a long-term trend that reflects the impact on mail by Internet bill payment and other electronic alternatives. Presorted First-Class Mail also decreased, which is a reflection of the general curtailment of advertising spending. Reduced advertising primarily affected Standard Mail which experienced a volume decline of 4.4 billion pieces, or 4.3 percent. Because it is composed primarily of advertising, Standard Mail is especially sensitive to economic contractions.
As mail volume fell throughout the year, the Postal Service initiated a number of efforts to reduce workhours. Compared with 2007, approximately 50 million fewer workhours were used this year, the equivalent of 25,000 work years. These efforts partially offset rising costs for fuel, compensation, and benefits, and helped the Postal Service reduce its total costs by $2.2 billion.
Postal Service delivery performance continued to improve in 2008. Despite declining mail volumes and revenues, it achieved best-ever performance for all three categories of First-Class Mail. First-Class Mail with an overnight commitment was delivered 97 percent on-time. First-Class Mail with a 2-day commitment was delivered 94 percent on-time, and mail with a 3-day commitment, 93 percent on-time. Performance is measured independently by IBM Global Business Services. Other service categories showed continued improvement as well.
This year the Postal Service updated its service standards for market dominant mail classes, a step taken after extensive customer outreach and consultation with the Postal Regulatory Commission (PRC). Performance to the standards will primarily be measured using a hybrid system that combines internal scans with external data independently collected and verified by IBM Global Business Services. Reporting is set to begin in January 2009.
All operations continued to benefit from increased data on mail flows which, combined with new systems and management tools, are highlighting opportunities to improve service consistency and efficiency. Process standardization is helping integrate data across functions and plants, reducing variability, and providing more consistent and predicable end-to-end service performance. Use of Intelligent Mail® barcodes is being piloted by a number of customers, who are beginning to gain a wealth of new information about the status of their mail in transit.
The Postal Service began to exercise its new flexibility under the Postal Act of 2006 to introduce new products and adapt prices more quickly to customer needs and market conditions. Organizational changes brought together product development, product management, and commercial sales in a new Mailing and Shipping Services division. A revamped Customer Relations division now manages key consumer and business customer relationships and pricing. Customers can now take advantage of commercial volume pricing, online price discounts, and other price incentives for Priority Mail, Express Mail, ground, and international parcels.