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The Path Forward: State & Future of the Postal Service. Cleveland Postal Customer Council. Dale Kennedy Consumer & Industry Affairs May 2, 2014. 158.4 billion pieces delivered to 153 million addresses
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The Path Forward: State & Future of the Postal Service Cleveland Postal Customer Council Dale Kennedy Consumer & Industry Affairs May 2, 2014
158.4 billion pieces delivered to 153 million addresses Postal Service is part of a $1.3 trillion mailing industry employing approximately 8.4 million people A healthy, financially viable USPS is vital to U.S. economy We Thank YOU for your business and contribution to the USPS and the mailing industry Mailing Industry is Critical
Stronger Together The Postal Service recognizes and understands: the value of the PCCs and its members the value of the efforts you put into the PCCs to make them so successful the expertise, guidance, and feedback you provide to your fellow PCC members and to the USPS
Stronger Together Our collective success depends on meeting our customers’ needs as: expressed individually through group forums such as the PCC maximizing the long standing partnership between the PCC network and the USPS Industry Associations
Stronger Together Customers and USPS have similar goals • Delivery of timely, actionable messages • Innovative, exciting mail offerings • Recognition of mail as a valued communication tool • A financially viable mailing system
Financial Hole • Liabilities exceed assets by approx. $40 billion • The USPS has only 36 cents of assets to cover each dollar of its liabilities • Under multi-employer accounting rules, there are approximately $50B in obligations not shown on the balance sheet. • Significant profits over years and legislation are needed to recover.
Revenue & Volume FY13 Feb YTD vs. FY14 Feb YTD $ Millions +1.9% +2.8% -0.1% +12.2% Volume: + 9.5% -5.7% Volume: - 1.5% -2.0% Volume: - 4.5% +1.7%
Load Leveling Load Leveling is a Business Imperative for Change Disproportionate amount of Standard Mail is scheduled for delivery on Monday resulting in: • Service Variability • Operational Inefficiencies • Increased Cost 8
Load Leveling Current State Impact on Delivery – Average % of Standard Mail Delivered by Day 1,800 42.4% Monday Delivered Volume 1,600 35.4% Standard Letters 1,400 52.4% Standard Flats 1,200 1,000 Delivery Day Volumes 800 16.3% 600 13.0% 12.6% 10.5% 400 5.2% 200 0 SAT SUN MON TUE WED THU FRI Qtr 1, FY 2013 DSCF Standard Flats DSCF Standard Letters 9
Load Leveling 24 Hour Clock Impact Disproportionate Monday workload impacts critical 24 hour clock parameters resulting in: PROCESS INDUCT • Late processing DELIVER • Late / missed transportation • Additional processing / transportation costs • Service failure
Load Leveling Expected Days of Delivery What stays the same: • Standard mail dropped at a DDU • Standard mail dropped at a NDC • EDDM - Retail • Periodical/Newspaper processing • First-Class Mail processing • Priority Mail processing 11
Load Leveling Expected Days of Delivery Scope of Limited Change: DELIVERY DAYS MEETING SERVICE STANDARD Thursday Friday, Saturday, Monday Friday, Saturday, Monday DSCF Standard Mail** Dropped Before 4pm* on Current Proposed Friday Saturday, Monday Saturday, Monday, Tuesday Saturday Monday, Tuesday Monday, Tuesday, Wednesday Sunday Monday, Tuesday, Wednesday Monday, Tuesday, Wednesday *The current Critical Entry Time (CET) for Standard mail is 4 pm **For delivery in the continental United States 12
Load Leveling South Jersey Test Scope: Evaluated the impact of load leveling the Standard Mail volumes received at the South Jersey P&DC across the days of the week Test Location – South Jersey P&DC (First Lean Mail Processing Plant) Test Period – Sep 12th through Sep 26th, 2013 Delivery Zones Participating: 110 Delivery Routes Participating: 1,190 Standard Mail Volume in Evaluation: 5.3M pieces
Load Leveling Results Summary • Efficiency • Reduced Total Weekly City Carrier Work Hours • 4.9% reduction vs Baseline Period • Reduced Carrier Overtime and Penalty Overtime Usage • 35.1% reduction vs Baseline Period • Customer Service • Improved Carrier Return Times • 74% reduction in Monday’s carriers returning after 1700 • Improved On-Time Service Performance • 96.00% on-time performance achieved • Employee Satisfaction • Overwhelmingly positive feedback • Management and Craft
Load Leveling Next Steps • Add Additional Sites to Test Implementation Approach • Review Comments to Proposed Rule – Feb 13, 2014 • Publish Final Rule: February 28, 2014 • Receive PRC Advisory Opinion • Implement Change no Earlier Than March 27, 2014 15
Full-Service Intelligent Mail Barcode (Imb) and Intelligent Mail Package Barcode (Impb) April 2013 - USPS announcement letters/postcards/flats Full-Service IMb requirements by January 26, 2014 to qualify for automation rates November 2013 - PRC ruled that the Postal Service’s IMb requirement constituted a rate increase and subject to a price cap January 2014 - USPS filed request with US Court of Appeals for review of PRC decision USPS remains committed to 100 percent Full-Service IMb adoption as an effective way to enhance the value of mail Package IMpb implemented January 26, 2014 and becomes mandatory January 25, 2015 Status of IMb and IMpb
Package Growth Initiatives Improved tracking language on usps.com More real time scanning equipment Sunday delivery Same Day Delivery Package Services Initiatives
March 16-19, 2014 Gaylord National Harbor Washington DC
NPF Overview Extensive Educational Opportunities - Over 150 workshops and Executive USPS led sessions. Networking - the key to growing business and making things happen! Exhibit Hall - Connect with 88 suppliers and industry leaders and to learn about NEW products, applications and services. 19
NPF Accomplishments * Preliminary Data, April 2014
NPF Accomplishments Overall Rating Workshops PMGKeynotes Key Sunday Session * Preliminary Data, April 2014
NPF Accomplishments Inclined to expand business Reasons to attend % very important Exhibit Hall Receptions % found valuable * Preliminary Data, April 2014
NPF Next Steps May 17-20, 2015 Anaheim, California