strategic-management

140 FRED AND FOREST DAVID
spanned the continent. By the turn of the nineteenth century, the Post Office Department
had purchased a number of stagecoaches for operation on the nation’s better post roads—a
post road was any road on which the mail traveled—and continued to encourage new
designs to improve passenger comfort and carry mail more safely.
The Postal Service Act of 1969 transformed the Post Office Department into the
United States Postal Service, an independent establishment of the executive branch of the
government of the United States. The Postal Reorganization Act of 1970 stated:
The United States Postal Service shall be operated as a basic and fundamental service
provided by the government of the United States, authorized by the Constitution,
created by an Act of Congress, and supported by the people. The Postal Service shall
have as its basic function the obligation to provide postal services to bind the nation
together through the personal, educational, literary, and business correspondence of
the people. It shall provide prompt, reliable, and efficient services to patrons in all
areas and shall render postal services to all communities. (Source: USPS Annual
Report, 2002 p. 3.)
The Postal Reorganization Act required that the government agency be self-supporting.
This was achieved in 1982, and the postal services have been free from taxpayer support since
then. This achievement was one of the first and most important results sought by the Postal
Reorganization Act. Financial self-sufficiency is a major goal in strategic planning for the
postal service.
In April 2003, the Postal Service delivered its Transformation Plan to Congress
defining the short- and long-term strategies that will enable the Postal Service to successfully
carry out its long-standing mission of providing affordable, universal service. In
August 2003, Public Law 107–210 was signed by the president and allows the Customs
Service to open outbound international mail weighing more than 16 ounces.
The Postal Reorganization Act, as specified by Congress, was to ensure that residents
of both urban and rural communities have access to an effective postal service. The
Postal Service has established a nationwide network of facilities, centralized delivery
units, and rural and highway contract delivery routes. A change in community postal needs
or the loss of suitable facilities may lead to the closing of a post office, but customers who
may lose a postal service are still provided benefits.
Internal Issues
Business Structure
Public Law 109–435 (P.L.109–435), signed by President Bush in December 2006, divided
postal services into two broad categories or divisions: market-dominant services and competitive
services. Market-dominant services include, but are not limited to, First Class
Mail, Standard Mail, Periodicals, and Package Services. Price increases for these services
are subject to a price cap based on the Consumer Price Index—All Urban Consumers
(CPI-U). Competitive Services, such as Priority Mail, Express Mail, Bulk Parcel Post, and
Bulk International Mail, have greater pricing flexibility.
The USPS board of governors is similar to a corporate board of directors. The board of
nine governors are appointed by the president and approved by the Senate. The governors are
chosen to represent the public interest, and no more than five can come from the same political
party. The nine governors select the postmaster general, who becomes a member of the
board. The postmaster general serves for an indefinite term as well as the deputy postmaster,
who is also selected by the board. The postmaster general and the deputy postmaster general
participate with the governors on all matters except for voting on rate or classification adjustments,
adjustments to the budget of the Postal Rate Commission, or election of the chairman
of the board. They work together on approval of rate and class changes.
Employees
The USPS has nine collective bargaining agreements with seven unions covering approximately
726,000 employees. As of September 30, 2008, there were 663,238 career USPS