2010 Comprehensive Statement on Postal Operations - USPS.com

Chapter 1: Mission and Strategy
time the Postal Service requested a price increase above the rate
of inflation, an action allowed under the Postal Act if exceptional or
extraordinary circumstances have made such an increase necessary.
The proposed price change, which would have been effective in
January 2011, would have improved the Postal Service’s bottom line
by about $2.3 billion in 2011.
However, the PRC denied the exigent price increase request on
September 30. In response, on October 22 the Postal Service
appealed the ruling to the United States Court of Appeals for the
District of Columbia Circuit. The appeal seeks a review of the PRC’s
interpretation of the law that governs how prices can be set under
extraordinary and exceptional circumstances. The Postal Service’s
position is that the PRC misread the statute and applied an incorrect
standard in evaluating the request.
Products and Services
As technology and customer needs change, so will the definition of
mail. The Postal Service seeks greater flexibility to innovate products
and better meet changing customer demands, while tapping into
new sources of revenue. The Postal Act split products and services
into two categories, market dominant (including monopoly products)
and competitive. In March, the Postal Service filed a request with
the PRC to change the designation of some Post Office Boxes from
market dominant to competitive to allow greater flexibility to meet the
needs of customers. In August, the Postal Service filed with the PRC
a request to transfer commercial Standard Mail Fulfillment Parcels
from the market dominant product list to the competitive product list.
The Postal Service is still restricted from nearly all of the revenue
diversification strategies that most foreign posts have implemented.
Greater flexibility to introduce more new products consistent with its
mission would allow the Postal Service to respond better to changing
customer needs and to compete more effectively.
Oversight
The world is rapidly changing, yet the current oversight model
constrains the flexibility and speed required to adapt and respond.
The Postal Service recognizes that the current financial crisis can
provide an historic opportunity to make changes that will lay the
foundation for a leaner, more market responsive Postal Service. It is
seeking a balanced suite of solutions that does the greatest possible
good for all stakeholders and the American public.
Future Business Model of the Postal Service
The Postal Act required the Government Accountability Office (GAO)
to prepare and submit to the President and Congress a report
providing in-depth evaluation of various options and strategies
for long term structural and operational Postal Service reform.
The Act required the GAO to consult during its preparation of the
report with the Postal Service, the PRC, postal employee unions
and associations, mailers, and others. The report, released in
April, well in advance of the 2011 deadline specified in the Act,
contained the GAO’s recommendations regarding how the Postal
Service’s business model could be maintained or transformed to
ensure the continuation of affordable, universal postal service to the
American public.
To help inform the GAO during the consultation process, in November
2009, the Postal Service gave GAO a report — Assessment of
U.S. Postal Service Future Business Model — which explained the
challenges of the current model, identified alternatives, and offered
recommendations for the future. Four papers by external authors
assessing the challenges and options were also provided. In March
the Postal Service provided it with the Ensuring a Viable Postal
Service for America plan. All of these documents can be found at
usps.com/postallaw/futurebusinessmodel.htm.
Governance and Oversight
Board of Governors
As the governing body of the Postal Service, the 11-member Board
of Governors has responsibilities comparable to the board of directors
of a publicly-held corporation. The Board includes nine Governors
appointed by the President of the United States with the advice and
consent of the Senate. The other two members are the Postmaster
General and the Deputy Postmaster General. The Governors appoint
the Postmaster General, who serves at the pleasure of the Board,
without a specific term of office. The Governors, together with the
Postmaster General, appoint the Deputy Postmaster General. The
Chairman and Vice Chairman are elected each calendar year, and
in November 2009, Louis J. Giuliano was elected Chairman, and
Thurgood Marshall, Jr. was elected Vice Chairman.
The Board directs and establishes policies, basic objectives, and
long-range goals for the Postal Service in accordance with Title 39 of
the United States Code. Except for those powers specifically vested
in the Governors, the Board may delegate the authority vested in it
by statute to the Postmaster General under such terms, conditions,
and limitations, including the power of re-delegation, as it deems
desirable.
The full Board held 11 meetings during the year. Meetings consist of
open and closed sessions in accordance with the provisions of the
Government in the Sunshine Act. Meetings were held in Washington,
DC, Potomac, MD, and Louisville, KY, and by teleconference. In
addition to full Board meetings, committee meetings were held, some
not coincident to the full Board meeting dates. The Board had four
committees: Audit and Finance, Compensation and Management
Resources, Governance and Strategic Planning, and Government
Relations and Regulatory, and one subcommittee — Operations.
The committees met to consider matters within their areas of
responsibility and referred items to the full Board for consideration.
Pursuant to its Bylaws, the Board considered and approved items
reserved for its decision. Key decisions included those approving
the audited 2009 financial statements and 2009 Annual Report
(November); the <strong>2010</strong> Integrated Financial Plan (November); the
<strong>2010</strong> <strong>Comprehensive</strong> <strong>Statement</strong> on Postal Operations | 3