Postal News
FOR IMMEDIATE RELEASE
September 6, 2002
Contact: (202) 268-2155
Release No. 02-065
Transformation Plan Initiatives Produce Dramatic Service Improvements, Cost Savings In Fiscal Year 2002
WASHINGTON, DC - Despite a continuing weak economy and reduced mail volumes, sweeping organizational changes that focus on the core business of delivering the mail - and the dedication of postal employees nationwide - have achieved extraordinary service improvements and cost savings that are expected to trim this year's expected net loss of $1.2 billion, well below earlier projections that ranged as high as $4.5 billion.
In his report today before the monthly meeting of the Postal Service Board of Governors, Postmaster General John E. Potter said measures taken to minimize the loss included reducing the number of career employees by 23,000 this year through attrition, and that 77 million work hours will be cut compared to last year. In addition, realignment of field management structures, aggressive balancing of work hours against appropriate workloads, and postponing a number of program expenditures have combined to reduce costs by more than $2.5 billion this fiscal year.
These actions, and other Transformation Plan initiatives implemented earlier this year, have produced remarkable results in increased labor productivity and total factor productivity. By the end of this fiscal year, the Postal Service will have approximately the same number of career employees it had in 1995, yet it will be delivering 21 billion more pieces of mail to 12 million more addresses.
With the Postal Service focused on the core business and developing innovative solutions to move the mail, Potter reported delivery service performance across the country has rebounded, with the Postal Service posting records levels of performance for overnight, two-day, and three-day delivery of First-Class Mail and Priority Mail. Express Mail scores are at their highest levels in four years.
To sustain continued improvements in fiscal year 2003, Potter said the Postal Service is committed to continuing improvements in service performance; growing its business by generating new revenue streams; and, carefully managing finances to reduce costs.
"Short term success is in front of us, but that success should not distract anyone from the long-term requirement to transform the Postal Service to meet the continuing needs of our nation," he added, explaining that many in Congress and the administration recognize that legislative reform is necessary to ensure that postal products and services remain universally available and affordably priced.
In other action:
Automated Small Parcel and Bundle Sorters
The Postal Service moved forward with its efficiency-based strategy to improve package sorting productivity and sorting accuracy as part of its Transformation Plan by obtaining Board approval for the Automated Package Processing System (APPS). This technology will replace more than 100 of today's mechanized Small Parcel and Bundle Sorting (SPBS) machines at 70 postal facilities nationwide.
The APPS achieves significant productivity improvements with greatly reduced manual handling by:
- Automating the feeding process;
- Utilizing Optical Character Recognition (OCR) technology to read addresses;
- Utilizing a recirculating transport system that permits on-line video encoding of pieces that cannot be read by the Optical Character Reader; and,
- Expanding the size and weight of mail it can accommodate.
FY 2002 Borrowing Resolution
The Governors approved the fiscal year 2002 Borrowing Resolution presented by Chief Financial Officer and Executive Vice President Richard Strasser. The fiscal year 2002 plan developed last year projected a borrowing need of $1.6 billion. Through stringent cost controls and reduced capital spending, the borrowing requirement for fiscal year 2002 was reduced to $700 million, raising the outstanding debt to $12 billion.
Delivery and collection vehicles
The Board approved funding to purchase 3,234 Mixed Delivery and Collection vehicles. The two-ton trucks will replace aged vehicles that are part of a fleet of 7,100 used for mail collections, expedited delivery, and parcel post.
New General Ledger System
The Board approved funding to replace the Postal Service's outdated General Ledger Accounting System with a Commercial Off-The-Shelf (COTS) application. The existing system, as the core of the Postal Service's financial reporting activity, is comprised of various applications that are up to 25 years old and written in outdated programming languages. The new General Ledger COTS solution assures a system sized for Postal Service activity and provides a single source for integrated financial reporting. The new system leverages the Postal Service Data Warehouse capability by storing financial data in a single data repository making data access, data analysis, and data reporting faster and easier.
Office of Inspector General - office space additional funding request
The Board approved funding to complete a project approved last year that provides space in Arlington, VA, for the Office of the Inspector General.
New Governor joins the Board
Chairman Robert F. Rider welcomed former Postmaster General Albert V. Casey to the Board of Governors. Casey was appointed to the Board by President Bush through a recess appointment on Aug. 6, 2002. Following Senate confirmation, Governor Casey will serve for the remainder of a nine-year term that will expire Dec. 8, 2009.
Governor Casey has a strong private and public sector background. He is presently a Distinguished Executive in Residence at the Edwin L. Cox School of Business at Southern Methodist University. Prior to joining the Cox School of Business, Governor Casey was the President and Chief Executive Officer of the Resolution Trust Corporation.
From 1986 to 1988, he was the Ann Cox Distinguished Professor of Business Policy at Cox School of Business after serving as Postmaster General of the United States in 1986. Governor Casey was the chief executive of American Airlines from 1974 to 1985, and remained on the Board of Directors until 1991. He joined American Ailines after eight years as the President of the Times Mirror Company in Los Angeles.
Born in Boston, he received an undergraduate degree in economics from Harvard University in 1943. After serving four years in the U. S. Army during World War II, he received an MBA from the Harvard School of Business Administration in 1948.
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Since 1775, the U.S. Postal Service has connected friends, families, neighbors and businesses by mail. It is an independent federal agency that makes deliveries to 137 million addresses every day and is the only service provider to deliver to every address in the nation. The Postal Service receives no taxpayer dollars for routine operations, but derives its operating revenues solely from the sale of postage, products and services. With annual revenues of more than $65 billion, it is the world's leading provider of mail and delivery services, offering some of the most affordable postage rates in the world. The U.S. Postal Service delivers more than 43 percent of the world's mail volume - some 207 billion letters, advertisements, periodicals and packages a year - and serves 7 million customers each day at its 38,000 retail locations nationwide.
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