on Mar 3rd, 2010 in Strategy & Public Policy | 21 comments
 
On March 2, Postmaster General John E. Potter presented a 10-year “action plan” to meet the challenges faced by the Postal Service as it encounters declining mail volumes combined with increasing overhead costs. The plan comes as a product of a yearlong study by the Postal Service and a number of leading consultants to identify and analyze over 50 different actions that could help counter the changing marketplace. The Postmaster General warned that if the Postal Service continues to operate as it is, it will run a cumulative debt of $238 billion over the next 10 years. Even if the Postal Service institutes every conceivable control within management control – product and service actions, productivity improvements, workforce flexibility improvements and purchasing savings – it can only shrink the debt to $115 billion.

In order for the Postal Service to continue its primary mission of affordable and reliable delivery, it will need the kind of flexibility that only legislative changes can provide. The Postmaster General outlined key areas:

  • 1.Retiree Health Benefits Prefunding – The Postal Service currently would shift from prepaying its fund to paying premiums as they are billed, as other government agencies and private companies operate. 2.Delivery Frequency – The Postal Service would consider 5-day delivery and other adjustments that would allow it to operate more efficiently. 3.Expand Access – The retail network would be examined in order to close unproductive outlets and expand the postal presence in other retail channels, including online. 4. Workforce – In order to have greater workforce flexibility, the Postal Service would need to shift workers and better utilize part-time employees in the workforce. 5.Pricing – The prices for postal products need to reflect demand and market-dominant products should be limited by a single price cap. 6.Expand Postal Products and Services – Given the evolving needs coming from technological and consumer change, the Postal Service is looking to streamline the process involved with rolling out new products and services. 7.Oversight – The current oversight model has encumbered the Postal Service with a number of agencies and commission as with authority as well as Congress. The roles and processes of oversight need to be clarified to allow for efficient operations.

What do you think? Are the actions mentioned above enough for the Postal Service to remain viable in the future? Would you suggest further steps? This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).

Comments

Could someone explain what point #5 means?

"The prices for postal products need to reflect demand and market-dominant products should be limited by a single price cap."

This is pretty cryptic.

Here's what I think will help, not a cure-all, but a start:

-Overhaul the upper management structure. I know this has been beaten to death, but the PS is way too top heavy.

-Assess all of the programs that we have. Do we really need an EXFC score everyday? And how much money is being wasted just to chase down a number? Why keep SPMS when it is so easy to manipulate? Secret shopper- is it doing more harm than good by forbidding window clerks to cater to a customer's specific needs?

-5 day delivery is inevitable, but keep PO Box delivery for those that absolutely need Saturday mail. It can also bring in some revenue.

-Reinstate the rule that those living within a half mile of a non-delivery office to get a PO Box there for no charge. Even if you are not getting any revenue from it, it is still cheaper than delivering to a curbside mailbox. You will save $107 per delivery point (based on 2007 numbers). It will also increase productivity of the smaller offices.

-Another option, if the unions don't make a stink, is to place cluster boxes at many small non-delivery offices so that those who live within that half mile can get their mail there, also saving on delivery costs and improving productivity.

-Creating a Zumbox type system so that we have an electronic system to compliment the paper system. Also, maybe creating a secure online bill payment system that can be insured against identity theft. Gives customers peace of mind. I don't know how that would work, but it's a start.

-

As a current employee for the U.S.P.S., I witness a lot of wasted revenue. Since I have been employed, I have yet to be approached by anybody (other than local Management) who oversees the Postal revenue for any suggestions or ways to cut wasted revenue. It seems the employees who are in charge of the revenue spending are the ones who do the most wasted spending and they keep all the spending very secretive. I think the local budget should be available for review by everybody so the rest of us can make cut suggestions.

What the post office needs to do is trim the fat off the top! They should not be cutting service and closing post offices. We should NOT be going to 5 day delivery. We should have a blue collection on every major street, not removing them. It only takes a minute or less to collect those boxes, and the post office should fire the manager that believes cutting service and making the post office less accessible to the public is a good idea. Speaking of managers , can someone please tell me why (when after the carriers are on the street) do we have two managers(one supervisor and one postmaster) in our office watching 2-3 clerks each day??? WHY??? Not only that, but the carriers are held accountable for every minute of every day with msp scans, misc barcodes, and now GPS. Who holds the management accountable? If the carriers are on the street delivering mail, what are all these managers managing all day long (just curious). It is infuriating to me to see postal management dismantling the service brick by brick every day. It is very sad.

I think service reductions would have a dire effect not only for the USPS but also for many other companies providing services and goods to and through the postal service.
They need to look at what thier own over-regulation and demands on mailers to conform to ITS technology, instead of making decisions based on what the "customers" needs are. By "customers" I refer to the larger mailers, not the home residence. Many mailers are now looking to get out of the mail business faced with unrealistic updates and USPS management decisions that cost them not only in regular costs, but the steep fines they face.
Like the recent "droop" requirments that a flat mailpiece placed on the edge of a table cannot be allowed to droop more than a certain percent. How would something like that effect YOUR business if you were a large mailer? How about a couple of other decisions management put out concerning "static" and the amount of allowable static mailers envelopes and catalogs were allowed. Seriously!
The idea that windowed envelopes not be used too. That is insane.
The idea to require mailers to make these expensive changes just to insure that the billions spent on new sorters could be justified, is backwards thinking. Pushing the mail away will NEVER justify that expense, and what will the USPS do with all that equipment when the last of the flats get run?
Potter needs to be fired along with his mass troop of VP's and half of the Area and District personnel that never touch the mail.

First, Congress, the PRC and the American public should look very carefully at some of the assertions PMG Potter and the Board of Governors have made. The PMG has consistently been wrong in his projections over the years. He has pushed a business model that is clearly unsustainable and he has failed to address some of the most serious management abuses.
The USPS is much more than simply a "mailing business" and it's time that those managing the institution recognized that. Our network is a critical national asset and as the PMG eviscerates he does more than simply damage the Postal Service. The PMG and the BOG have had blinders on for the last twenty years. It's time for a new management model and more important, it is time for a real national conversation about the value of the mails and the critical place this institution holds in our society.

PK, my understanding of what point 5 means is that instead of capping market-dominant products (mailing products) by inflation at the class level, market-dominant products as a whole would be capped by inflation.

Right now, the overall price increase for First-Class Mail and each of the other classes is capped by inflation. The price increases for each of the individual products (such as post cards, single-piece one ounce letters, etc.) are averaged together using a weighted average based on the volume. Instead of this, the Postal Service is proposing having a single cap that works for all market-dominant products. One class's price increases could be above the cap while another class's prices were below the cap as long as the average was under the cap. The price increases would be based on demand, so that the least volume were lost when the price were increased. Anyway, that's my interpretation.

Here's the link to the Postal Service's presentation for more information and the Postal Service's explanation of its proposals: http://www.usps.com/strategicplanning/futurepostalservice.htm

I have been collecting postage stamps and stationery for over 50 years. In 2009 the USPS created over 200 different stamps and postal items. In the past, the number of new stamps was in the 20 to 40 range - way back, only 5 to 10. I think that with the high postal rates, the number of stamps needs to be reduced. Also, the "peel and put" stamps cost more to produce than the old "lick and stick". Going back to the old water activated stamps would cut the production costs. Also, outsourcing stamp production costs more that keeping the printing in-house. Non-collectors don't realize that producing huge numbers of different stamps is not a positive revenue producer. We used to have 1 Christmas stamp, in 2009 we had at least 12 - why?? Also, a rate change should not mean we need 200+ more stamps printed to cover the increase - just overprint the old ones.
I also feel that most people would not mind having 5 days of delivery. To be fair, the employes should not loose income or benifits if this happens.

The top managers need to start talking directly to the workers on the floor not by using VOE.

Interesting use of $4.7 to $5.2 million, or whatever the amount identified was, for the 2010 studies, by "consulting groups".

This identifies an interesting, and commonly discussed highlight, within backdrop of the USPS's fiscal problems.

Assuming the senior management, and the Executive
offices, are qualified to execute the duties of the USPS; why was it necessary to hire an outside consultant? Was this a congressional requirement?

After all, the GAO has already provides this service for congress, and the taxpayer pays for it.

It appears to this "casual" observer, the regional and district USPS management is incapable, or unwilling, to execute the day to day USPS business plan, as provided for by Washington. And, interpreted or applied by each unique district as applicable.

Furthermore, "universal service" would suggest the
same business plan applies to each jurisdiction, as
the district Postmaster General interprets, and executes.

Why would an organization hire an outside consultant,
who knows nothing about the unique business circumstances, that apply to each Postmaster General
jurisdiction? At a significant cost to the USPS I might add...

It's not like the districts don't have the management personnel in place already to provide the same duties?

"Something's rotton in the state of Denmark?"

Or the "The Path Forward", whichever applies......

As a current postal letter carrier, what I say will get some people angry. I think the 5 day delivery is the way to go. My union will not support it, but over 90% of the carriers in my office support this idea. The other 10% includes union officials and the replacement carriers.
Secondly, they need to combine offices. We don't need one Post master in every town and two or more supervisors to watch small number of workers. The Postal Service is the only organization which employs more people to watch then those who work. Make the workers independant contractors and give the the power to make decisions and pay the consequeses of my actions.

I used to care tremendously about the USPS and its future but after my most recent experience I could care less. From now on I will use FedEx.

I sent a package from New Orleans (containing a king cake, superbowl gifts, cash, and our nephew's birthday card) on Feb 19th. I bought insurance, delivery confirmation and sent it priority mail.

It is now March 11 and after weeks of listening to rude USPS reps tell me they had no idea where the package was I finally saw an update today that it made it to a post office 30 minutes from its destination but is now being sent back to me...for no reason!

1. Thanks for ruining my nephew's bday
2. Thanks for raising my blood pressure
and...
3. Thanks for making me aware of the USPS' horrible customer service and, well, service.

I plan to tweet about this and share on facebook and tumblr. And I'll be sure to let others know that if they ever need to mail something of importance they need to use FEDEX OR UPS or some other source.

Thanks for nothing but disappointment.

Marcie - When you do all the blogging and posting that your gonna do make sure you tell them about all the other stuff you've sent and didn't have a problem with. Or make sure you tell them that you are now paying 3x's the price to use Fed ex...and make sure you tell them then the USPS delivers MILLIONS of items every day without problem. It sucks and is unfortunate, but the % of lost or damaged or late mail from the USPS is minimal in comparison to the total amount the handle each day. OH, and I'm sure one late package didn't ruin your Nephew's birthday, stop stop using your nephew to prove your point.

I agree with Skippy and Ben - I am a supervisor and am so sick of being treated like i am an idiot from the MPOOs and SR MPOO's - do we really need so many of the MPOO's breathing down my neck. I have tons and tons of reports to do daily - why not just let me do my job? Those idiots uptop forgot where they came from - they use to be clerks and carriers - so what makes them so special now? Forget all the stupid reports and lets get down to business of delivering the mail and helping our customers.
And the mystery shop program - do away with it - why not hire within to do the job. Train our rehab employees to go around and do this job. And instead of getting a report telling everyone how bad you did (and notice that not many get 100% - its because the mystery shopper does not want us to get 100% all the time - they would be out of a job- duh)
And after a secret shopper is done - have them go back to the manager and pull that employee asside and help them understand what they did wrong. Stop paying outside help and keep the money inhouse.

What the post office needs to do is start putting out limited edition stamps with a limited number printed so collectors start buying them up and holding on to them. This gets cash flow in. When I lived in Las Vegas the casino's would put out limited edition gaming tokens and then the collectors would have them saved up. Or make a limited stamp at a small discount (kind of like the forever stamp but opposite) and have the stamp expire after so long (say 6 month period) and after that time they would be no good except to a collector. Keep up the good work at USPS. I sell on eBay and use your service most of all.

I'd like to propose that the USPS save a few bucks by not harassing its employees.If we let go several hundred Postal lawyers, we'd save some real money. What a time and money waster- besides, it's Federal Law signed in 2002 that the employees be protected from this.What a shame, locally, it isn't stopping in spite of these facts- could save more than a job- someone's sanity! We shouldn't be losing sleep and living in constant fear from management, often retaliatory, over getting a letter from point A to Point B! It needs to be stopped!

It's true that supervisors doing to much work.Is that a reason why they hire too much supervisors. Mismanagement.
5 days delivery is suck because other company will get that opportunity to get our job for that particular day. So i suggest just keep offering early retirement and just give them their TSP so they will have enough retirement money. Or another solution is to have a little salary cut.Lastly, some supervisor needs to step down to be a carrier to eliminate overtime.

I work for the Postal Service as a carrier. I want you all to know you are wasting your time. The Postal Service is a dinosaur that will fail within the next 5 years. It is an outdated service. Vinyl records, pay phones and now the USPS. Let's face it; it is over. You have managers doing special assignments standing in offices WATCHING people work and doing reports on them. These new flat machines should do away with thousands of management jobs. It won't. I am not a brainwashed union idiot either. The place is up for grabs and the powers that be are trying to justify their pathetic excuses for jobs. GO FED EX AND UPS! Fed Ex business is up 150%.. hmmm.. A monopoly that cannot make money.. How sad but very funny also..

1.) Go to a five day work week.

2.) If there are labor holes to fill, hire, NO overtime at ALL! Companies in the private sector have on call employees, so can you.

3.) Offer early retirement, and let newer workers come in at lower pay.

4.) Postal workers should pay the same percentage of health care insurance as other federal employees- why are they special?

5.) Eliminate junk mail. I don't want it. If you only had to deliver real mail that I want or I need you would not have to come to my house 2/3 of the time.

6.) Charge everyone first class rate, especially those junk mail companies - heck, charge them double.

To balance post office budget:

Hello, some comments are as follows:
1) Institute a tiered delivery charge so rural and suburban customers with "end of driveway" delivery are in a higher cost tier. Many newer suburban customers have community mailboxes which is much more efficient. Low income rural customer delivery could be subsidized.
2) Break up post office into regional carriers like AT&T was broken up, to foster competition.
3) Stop residential delivery on Weds instead of Saturday - this avoids 2 day delay in mail over the weekend should Sat. be stopped.

What a debt! Nice post, thank you.

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