State of the Postal Service Part 1

Information provided by the US Postal Service:

This recession has been particularly cruel to the postal service, already battered by the popularity of e-mail. Total mail volume is declining and just Last year we saw the biggest decline in mail since the Depression: volume fell by 4.5%, or about 9 billion pieces.

The postal service continues to loose volume in it’s largest, most profitable segment: First class mail. The postal service ended the 2008 fiscal year with a $2.8 billion loss, and the next two years may well be worse.

In response to the continuing decline in mail volume and revenue, the Postal Service has taken unprecedented steps over the past decade to reduce cost in areas within its control, including cost reductions totaling $12 billion in the past four fiscal years. The Postal Service has already identified and is pursuing a number of needed legislative changes that would help to return it to solvency.

Actions have been taken across the board to address the financial situation including: Work hour reductions, distribution compression, national distribution center realignment, facility optimization, equipment optimization and restructuring efforts.

The Postal Service is also undertaking, or has proposed, a number of additional steps to help it achieve the cost savings necessary to restore financial solvency. With respect to its delivery network, the Postal Service has and continues to aggressively pursue an optimization initiative that has led to fewer delivery routes, despite the growth in delivery points, along with more efficient usage of vehicles and fuel. In addition, the Postal service has urged Congress to allow 5-day delivery, an essential step in right-sizing the delivery network to reflect the fact that the Postal Service is now delivering a decreasing amount of mail to an ever-expanding number of delivery points.

The Postal Service is also closely examining its retail network, to identify opportunities where postal-operated facilities can be consolidated or replaced with alternate access channels that are both more cost-effective and provide greater access and more convenience for customers. The first step in this process was recently taken by the identification of approximately 3,700 retail facilities that will be studied for possible closure or conversion to contract postal services.
The Postal Service is also moving forward with efforts to streamline its mail processing network.

Currently, the Postal Service has over 500 facilities where mail is processed. Because of the decline in mail volume, referenced above, and the change in mail mix that has led to fewer pieces of mail requiring end-to-end processing, efforts are underway to continue to optimize this network using Area Mail Processing studies and other consolidation initiatives. We anticipate reducing transportation miles and costs and reducing the number of processing facilities to below 200.

Continue to State of the Postal Service Part 2

This entry was posted in Direct Mailing, US Mail Tracking and tagged , , , , , , , . Bookmark the permalink.

2 Responses to State of the Postal Service Part 1

  1. Great overview thus far looking forward to part 2.

    This is an interesting debate going on in Washington.

    Outside of work, I send, maybe, 100 first class pieces of mail a year 70% Christmas cards, 25% thank you notes and birthday cards, and 5% pretty well exclusive to one household that doesn’t have email.

    It seems that there are several options here:

    1. Bail them out (possibly temporary fix)
    2. Give USPS the authority to make these changes that you said that they want to make
    3. Socialize package delivery (I would think this would increase their profitability)
    4. Dissolve the postal office or otherwise severely limit it’s role

    I’m not too ideological here, whatever works. My only concern with #4 is that we should the put resources into ensuring that people who can’t afford internet access can still get it, essentially, substituting mail for email.

  2. Pingback: State of the Postal Service Part 2 | CSG Direct Mail

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>