How to Read
Our Annual Report
2000 Highlights
Letter from
the Postmaster General/CEO
2000 Year
in Review
Delivering
the Future
The Governors
of the Postal Service
Audit Committee
Financial
Section
How to Read
Our Financial Statements
Quick
Find index
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2000 Annual Report
- page 24 of 70
We have worked hard to increase our productivity while delivering
high-quality service. We've invested billions of dollars in automation,
and that investment has paid significant dividends for postal customers
in terms of reduced costs. For example, our strategy to automate
the way we process letters has produced significant cost savings.
Here's how we're doing this.
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When we introduced the ZIP+4 code and bar code, we also began to
install the automated equipment that would use these innovations
to move the mail. Using Optical Character Reader technology to read
the ZIP+4 code and delivery address, and apply the appropriate bar
code allows us to automatically sort the letter according to the
mail carrier who will deliver it. For example, when you mail a letter
in Seattle to your aunt in Chicago, our equipment will read the
ZIP code and street address on your letter and place a bar code
on the envelope. This bar code not only tells our automated equipment
which mail carrier in Chicago will deliver your letter but also
places it in the order in which it will be delivered on the carriers
route. Today, 89% of all letters are bar coded. Our goal, of course,
is to get bar codes on all the letters we handle.
In addition to helping us move the mail more efficiently and to
handle the growing volume of mail we must process each year, our
success in automating the way we process letters has produced real
cost savings. Since labor costs for distribution and sorting letters
account for about 50% of the costs for processing them, we have
focused on automating these functions. For example, from 1987 to
1999 we have accumulated cost savings equivalent to hundreds of
millions of work hours in processing letters. In other words, without
our progress in automating letter processing, we would have had
to hire thousands more workers to move this mail.
Our investment in letter automation has produced a cumulative cost
avoidance of $19 billion since 1987. In 2000 alone we had almost
$3 billion in cost avoidance from our past investments in automation.
And this trend will continue as our past investments pay increasing
dividends in the form of lower costs. We must continue to make significant
investments so that we will be able to control our costs in the
future. Cost control today began with the investments we made yesterday;
cost control tomorrow begins with the investments we make today.
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At first, letter automation was one letter at a time. Now it's 30,000
letters per hour.
Letter Automation saved us millions of work hours. That is a cost
avoidance of $19 billion since 1987.
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