2010 Comprehensive Statement on Postal Operations - USPS.com

Chapter 1: Mission and Strategy
The Postal Service’s mission is to provide the nation with reliable,
affordable, universal mail service. By law, its basic function is “. . . 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.” 1
The Postal Service delivers to 151 million addresses six days a week,
and collects outgoing mail and packages at the time of delivery. It
provides mailing and shipping services through tens of thousands of
postal and non-postal retail outlets as well as usps.com.
Document Purpose and Structure
The annual <strong>Comprehensive</strong> <strong>Statement</strong> on Postal Operations and the
Annual Report describe Postal Service activities and results. The
<strong>Comprehensive</strong> <strong>Statement</strong> offers a summary of customer, employee,
and operational developments, with more detailed reporting on key
corporate goals and strategic initiatives. The Annual Report focuses
on finances and financial results.
The Postal Service has filed a <strong>Comprehensive</strong> <strong>Statement</strong> since
1976, as required by law. 2 Chapter 1 addresses the Postal Service’s
mission. Chapter 2 focuses on products and services. Chapter 3
discusses operations. Chapter 4 describes customer programs.
Chapter 5 covers the workforce and employee-related programs.
This document also contains the Postal Service’s <strong>2010</strong> Annual
Performance Report and 2011 Annual Performance Plan, which are
required by the Government Performance and Results Act.
Action Plan Overview / Assessment
For 235 years, the Postal Service has fulfilled its mission to deliver
trusted, affordable service to the nation. Its business model
worked well because mail volume grew steadily with the nation,
and postage provided sufficient revenue to cover all operating and
overhead costs. Today, the Postal Service is by far the world’s most
efficient post. A U.S. First-Class Mail stamp costs 44 cents, while
other major posts average 78 cents for their equivalent service.
Service levels and customer satisfaction have reached the highest
levels ever reported. And for six years in a row, the Postal Service
has also been named the “Most Trusted Government Agency” for
protecting customer privacy and rates in the Top 10 of all public and
commercial entities.
Despite these accomplishments, the Postal Service’s ability to
remain financially self-sufficient is in jeopardy. Mail volume has
fallen nearly 20 percent in just three years, the result of the worst
recession since the 1930s, which has been particularly damaging
to many of the Postal Service’s largest customers, the housing,
1 39 U.S.C. § 101(a)
2 39 U.S.C. § 2401(e)
financial, and retail industries. New technologies continue to rapidly
reshape how Americans communicate and transact business, further
reducing volume.
The Postal Service responded with aggressive cost reductions,
producing $6.0 billion savings in 2009 and another $3 billion this
year. It used 75 million fewer work hours in <strong>2010</strong>, 6.0 percent fewer
than last year. However, the savings were insufficient to counter
continuing declines in mail volume combined with the obligation
to pay $5.5 billion to prefund future retiree health benefits and a
$2.5 billion charge that resulted from discount rate and actuarial
changes on the Postal Service’s workers’ compensation liability.
The Postal Service has communicated to Congress and all
stakeholders that it expects current trends to continue. Without
fundamental changes to its
existing business model,
cumulative losses could reach
$238 billion by 2020. To help
prevent this outcome, in March
the Postal Service published
Ensuring a Viable Postal Service
for America, a 10-year plan that
provides a conceptual framework
to address its financial viability
issues for the longer term. The
plan was the product of more than
a year of dialogue with members
of Congress, the Administration,
the business community,
employee groups, and the general public. Supporting the effort were
three consultants — Accenture, The Boston Consulting Group, and
McKinsey & Company — whose analyses were incorporated in the
action plan.
The plan proposes changes in two areas. First, it outlines a series
of actions within management’s control — in product and service
initiatives, productivity, workforce improvements, and purchasing
savings. These will reduce projected net losses by a cumulative
$123 billion. To eliminate the remaining $115 billion in projected
losses through 2020, the plan identifies seven areas where legal
changes are needed — in retiree health benefits prefunding, delivery
frequency, access, workforce flexibility, pricing, product offerings,
and oversight.
Since the plan was introduced in March, Congress has held several
hearings and the Government Accountability Office (GAO) issued a
report containing recommendations on the postal business model.
Progress has been made in several public policy areas outlined in
the plan, most of which is included in draft legislation sponsored
by Senator Thomas Carper. Descriptions and updates of necessary
legislative and regulatory changes follow:
<strong>2010</strong> <strong>Comprehensive</strong> <strong>Statement</strong> on Postal Operations | 1