strategic-management

14
The United States Postal
Service (USPS) — 2009
Fred and Forest David
Francis Marion University
www.usps.com
Postal prices went up in January 2009 for Express Mail, Priority Mail, Parcel Select, Parcel
Return Service, and some international shipping products. Express Mail prices now start at
$13.05. That was the first time the United States Postal Service (USPS) had separate price
adjustment and implementation dates for their shipping and packaging business versus
their mailing services and products business. For the latter, which includes first class mailings,
postal prices increased in May 2009. A first class stamp is now 44 cents. More and
more consumers are bypassing the USPS by using e-mail. This fact, coupled with the
global recession, has placed the Postal Service in a precarious position going forward.
USPS needs a clear strategic plan.
USPS is an independent federal agency that makes deliveries to more than 140 million
addresses every day. USPS is the only service provider to deliver to every address in the
nation. USPS is the world’s leading provider of mail and delivery services, offering some of
the most affordable postage rates in the world. However, the USPS completed fiscal year
2008 ending September 30 with a net loss of $2.8 billion as indicated in Exhibit 1. The loss
occurred despite more than $2 billion in cost-cutting measures that included the use of
50 million fewer work hours than fiscal 2007. On a positive note, on-time delivery of first
class mail reached record levels in 2008. Mail volume in 2008 totaled 202.7 billion pieces, a
decline of 9.5 billion pieces, or 4.5 percent, from 2007.
USPS’s total revenue in 2008 was $75 billion, unchanged from 2007. Expenses
totaled $77.8 billion, including the $5.6 billion payment required by the Postal Act of 2006
to prefund retiree health benefits. 1
Mission and Vision
The Postal Reorganization Act of 1970 defines the mission of the Postal Service as follows:
The Postal Service is to bind the nation together through the correspondence of the
people, to provide access in all communities, and to offer prompt, reliable postal
services at uniform prices.
In the early 1990s, the USPS management reviewed the mission and developed a
Statement of Purpose:
To provide every household and business across the United States with the ability to
communicate and conduct business with each other and the world through prompt, reliable,
secure and economical services for the collection, transmission, and delivery of
messages and merchandise.
The Postal Service receives no taxpayer dollars for routine operations but derives its
operating revenues solely from the sale of postage, products, and services. Vision 2013 is a
term that refers to the Postal Service’s five-year strategic plan. The organization’s vision as
stated in that document is as follows:
Our vision of the future begins with a strong foundation. We will continue to
strengthen our core operations and services, balancing an immediate and urgent