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Webinar #12
State of the Business and
Do Not Mail
Presented byPat Donahoe and Wendy Hocking
Friday, January 30, 2009
®
2
Introduction
Service
Costs
General Updates
Do Not Mail
Agenda for Today’s Discussion
Agenda
®
3
Introduction
Service Performance
Costs
General Updates
Do Not Mail
Agenda for Today’s Discussion
Agenda
®
4
96.01
92.5
93.0
93.5
94.0
94.5
95.0
95.5
96.0
96.5
97.0
97.5
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
EXFC OVERNIGHT UCL LCL Target
NATIONAL EXFC OVERNIGHT
UCL & LCL set to 1 σ
EXFC Overnight
Control Limits are based on the 30 week trend
Performance
®
5
91.90
84.0
86.0
88.0
90.0
92.0
94.0
96.0
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
EXFC 2-DAY UCL LCL Target
NATIONAL EXFC 2-DAY
UCL & LCL set to 1 σ
EXFC Two-Day
Performance
®
6
89.16
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0
100.0
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
EXFC 3-DAY UCL LCL Target
NATIONAL EXFC 3-DAY
UCL & LCL set to 1 σ
EXFC Three-Day
Performance
®
7
90.70
0.0
20.0
40.0
60.0
80.0
100.0
120.0
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
PRIORITY AIR UCL LCL Target
NATIONAL PRIORITY AIR
UCL & LCL set to 1 σ
Priority Mail Air
Performance
®
8
94.61
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0
100.0
105.0
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
PRIORITY SURFACE UCL LCL Target
NATIONAL PRIORITY SURFACE
UCL & LCL set to 1 σ
Priority Mail Surface
Performance
®
9
96.65
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0
100.0
105.0
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
EXPRESS MAIL UCL LCL Target
NATIONAL EXPRESS MAIL
UCL & LCL set to 1 σ
Express Mail
Performance
®
10
86.88
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0
100.0
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
FCM PARCELS O/N UCL LCL Target
NATIONAL FCM PARCELS O/N
UCL & LCL set to 1 σ
FCM Parcels Overnight
Performance
®
11
78.49
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0
100.0
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
FCM PARCELS 2-D UCL LCL Target
NATIONAL FCM PARCELS 2-D
UCL & LCL set to 1 σ
FCM Parcels Two-Day
Performance
®
12
82.04
50.0
55.0
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
FCM PARCELS 3-D UCL LCL Target
NATIONAL FCM PARCELS 3-D
UCL & LCL set to 1 σ
FCM Parcels Three-Day
Performance
®
13
87.78
75.0
80.0
85.0
90.0
95.0
100.0
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
FCM PRESORT O/N UCL LCL Target
NATIONAL FCM PRESORT O/N
UCL & LCL set to 1 σ
FCM Presort Letters Overnight – BMEU Seeding
Performance
®
14
86.54
76.0
78.0
80.0
82.0
84.0
86.0
88.0
90.0
92.0
94.0
96.0
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
FCM PRESORT 2-D UCL LCL Target
NATIONAL FCM PRESORT 2-D
UCL & LCL set to 1 σ
FCM Presort Letters Two-Day – BMEU Seeding
Performance
®
15
84.79
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
FCM PRESORT 3-D UCL LCL Target
NATIONAL FCM PRESORT 3-D
UCL & LCL set to 1 σ
FCM Presort Letters Three-Day – BMEU Seeding
Performance
®
16
64.51
50.0
55.0
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
PACKAGE SERVICES %MTG STD UCL LCL Target
NATIONAL PACKAGE SERVICES %MTG STD
UCL & LCL set to 1 σ
Retail Del-Con Package Services %Meeting Standard
Performance
®
17
63.80
50.0
55.0
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
PERIODICALS UCL LCL Target
NATIONAL PERIODICALS
UCL & LCL set to 1 σ
Periodical Mail – BMEU Seeding
Performance
®
18
53.67
50.0
55.0
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
. H . . . H . H . . . H H
PERIODICALS UCL LCL Target
NATIONAL PERIODICALS
UCL & LCL set to 1 σ
RedTag and Del-Trak Periodical Mail – Validated by IBM
Performance
®
19
71.26
50.0
55.0
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0
9/27/2008
10/4/2008
10/11/2008
10/18/2008
10/25/2008
11/1/2008
11/8/2008
11/15/2008
11/22/2008
11/29/2008
12/6/2008
12/13/2008
12/20/2008
12/27/2008
1/3/2009
1/10/2009
. . H . . . H . H . . . H H . .
STANDARD MAIL UCL LCL Target
NATIONAL STANDARD MAIL
UCL & LCL set to 1 σ
Standard Mail – BMEU Seeding
Performance
®
20
Introduction
Service
Costs
General Updates
Do Not Mail
Agenda for Today’s Discussion
Agenda
®
21
The GAP
Revenue and Cost Per Delivery
$450
$460
$470
$480
$490
$500
$510
$520
$530
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 E
Revenue Per Delivery Cost Per Delivery
®
22
Bend the Cost Line
Costs
$ 6 0
$ 6 5
$ 7 0
$ 7 5
$ 8 0
$ 8 5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Baseline Costs
Plant Reductions
Delivery Reductions
Non-Personel Reductions
®
23
Forecast FY2009 Revenue Waterfall Analysis
$75.3
$3.1$1.7
$0.5
$76.2
$70
$73
$76
$79
$82
$85
Billio
ns
Price Increases
VolumeDecline
Mail MixEffect
FY 2009Plan
FY 2008Estimate Note: Not Drawn From a Zero-Based Scale
®
24
FY 2009 Expense Waterfall Analysis
$82.0
$78.0 $1.4
$0.7$0.2 $0.5
$0.3$0.8
$0.1
$70
$73
$76
$79
$82
$85
Bill
ion
s
COLA
WageIncreases
HealthBenefits
OtherBenefits
Non-personnel
FY 2009Forecast
FY 2008Estimate
Note: Not Drawn From a Zero-Based Scale
TransportationInterest
FY 2009 Integrated Financial Plan
®
25
FY 2009 Expense Waterfall Analysis
$79.2
$78.0 $1.4
$0.7$0.2 $0.7
$0.3$0.8
$0.1
$70
$73
$76
$79
$82
$85
Bill
ion
s
COLA
WageIncreases
HealthBenefits
OtherBenefits
Non-personnel
FY 2009Plan
FY 2008Estimate
Note: Not Drawn From a Zero-Based Scale
Cost ReductionsTransportation Interest
$3.0
®
26
®
PQ1 Savings Captured
®
27
Specific Strategies to Close the Cost Gap
Aimed at Workload Loss and Productivity Improvements
Attack Fixed Costs Timeline by Function / Initiative /
Quarter Plant Network Delivery Customer Service / Retail
Roadmap to Closing the Gap
®
28
Area SavingsDeployed
PQI PlanCapture
PQI ActualCaptured
FY2009%Captured
Network: Plant $1.80 B $0.30 B $0.32 B 106.7% Transportation $0.30 B $0.06 B $0.14 B 233.3%
Delivery: City $1.20 B $0.31 B $0.20 B 64.5% Rural $0.20 B $0.06 B $0.08 B 133.3%
Customer Service $0.90 B $0.23 B $0.30 B 130.4%
Administration $0.10 B $0.03 B $0.02 B 66.7%
Other Non-Personnel $0.20 B $0.05 B $0.07 B 140.0%
Total Savings $4.70 B $1.04 B $1.13 B 108.7%
Total Savings Captured
®
29
FY2009 Field Budget
Volume Flex Adjustment
Negative $1.2B
Work Hour Reduction
Negative 31M
Workload Flex Adjustment
®
30
DollarsComplement
FTEWork Hours
Network: Plant $1.8 B 27,243 49.5 M Transportation $0.3 B
Delivery: City $1.2 B 16,578 32.1 M Rural $0.2 B 3,191 5.6 M
Customer Service $0.9 B 13,276 23.4 M
Administration $0.1 B 1,350 2.4 M
Other Non-Personnel $0.2 B
Initial Budget Reduction $4.7 B 61,638 113.0 MNegative Volume Flex Adjustment $1.2 B 17,987 31.5 M
$5.9 B 79,625 144.5 MTotal Savings Updated withNegative Volume Flex Adjustment
Total Savings Deployed
®
31
®
Complement Trends
®
32
December FY 2009 Career Employee On Rolls = 656,772
Total Career Employees
656,772
703,512
650,000
660,000
670,000
680,000
690,000
700,000
710,000
FY06
Oct
Dec
Feb
Apr
Jun
Aug
FY07
Oct
Dec
Feb
Apr
Jun
Aug
FY08
Oct
Dec
Feb
Apr
Jun
Aug
FY09
Oct
Dec
Empl
oyee
s O
n-Rol
l
USPS Complement Trends
®
33
December FY 2009 Career Clerks On Rolls = 191,943
Career Clerks
191,943
221,395
190,000
195,000
200,000
205,000
210,000
215,000
220,000
225,000
FY06
Oct
Dec
Feb
Apr
Jun
Aug
FY07
Oct
Dec
Feb
Apr
Jun
Aug
FY08
Oct
Dec
Feb
Apr
Jun
Aug
FY09
Oct
Dec
Empl
oyee
s O
n-Rol
l
USPS Complement Trends
®
34
December FY 2009 Career City Carriers On Rolls = 209,645
Career City Carriers
209,645
227,928
205,000
210,000
215,000
220,000
225,000
230,000
FY06
Oct
Dec
Feb
Apr
Jun
Aug
FY07
Oct
Dec
Feb
Apr
Jun
Aug
FY08
Oct
Dec
Feb
Apr
Jun
Aug
FY09
Oct
Dec
Empl
oyee
s O
n-Rol
l
USPS Complement Trends
®
35
December FY 2009 Career Rural Carriers On Rolls = 68,808
Career Rural Carriers
68,808
64,450
64,000
65,000
66,000
67,000
68,000
69,000
70,000
FY06
Oct
Dec
Feb
Apr
Jun
Aug
FY07
Oct
Dec
Feb
Apr
Jun
Aug
FY08
Oct
Dec
Feb
Apr
Jun
Aug
FY09
Oct
Dec
Empl
oyee
s O
n-Rol
l
USPS Complement Trends
®
36
December FY 2009 Mail Handlers On Rolls = 54,998
Career Mail Handlers
54,99856,070
54,500
55,000
55,500
56,000
56,500
57,000
57,500
58,000
58,500
FY06
Oct
Dec
Feb
Apr
Jun
Aug
FY07
Oct
Dec
Feb
Apr
Jun
Aug
FY08
Oct
Dec
Feb
Apr
Jun
Aug
FY09
Oct
Dec
Empl
oyee
s O
n-Rol
l
USPS Complement Trends
®
37
December FY 2009 Supervisors, Managers On Rolls = 24,284
Line Supervisors: Processing / Customer Services / Delivery
24,284
25,394
24,000
24,200
24,400
24,600
24,800
25,000
25,200
25,400
25,600
25,800
FY06
Oct
Dec
Feb
Apr
Jun
Aug
FY07
Oct
Dec
Feb
Apr
Jun
Aug
FY08
Oct
Dec
Feb
Apr
Jun
Aug
FY09
Oct
Dec
Empl
oyee
s O
n-Rol
l
USPS Complement Trends
®
38
Casual and Transitional Employees
38,699
28,694
0
10,000
20,000
30,000
40,000
50,000
60,000
FY06
Oct
Dec
Feb
Apr
Jun
Aug
FY07
Oct
Dec
Feb
Apr
Jun
Aug
FY08
Oct
Dec
Feb
Apr
Jun
Aug
FY09
Oct
Dec
Empl
oyee
s O
n-Rol
l
December FY 2009 Casual & Transitional Employees = 38,699 Current Casual & Transitional Employees as of January 20th = 27,587
Christmas
USPS Complement Trends
®
39
FY2009Opportunity
PQICaptured
Attrition 25,000 11,331
VERA 5,000 0
OT Reduction 13,820 7,000
Casual/TE Reduction 11,541 2,150
Complement Reduction Opportunity 55,361 20,481
Budget Reduction Complement Impact 79,625
Remaining Impact 24,264
Complement Reduction Impacts
®
40
Introduction
Service
Costs
General Updates
Do Not Mail
Agenda for Today’s Discussion
Agenda
®
41
Do Not Mail
Value of the Mail: “Do Not Mail” Issues for Field
Stakeholders
®
42
Do Not Mail
“Do Not Mail” LegislationState level Federal level
Underlying issuesPublic opinion
Environmental impact Consumer displeasure Identity theft
®
43
Do Not Mail
What we educate legislators about:
Valuing the Mail
Managing the Mail
Greening the Mail
Protecting the Mail
®
44
Do Not Mail
Current State Legislation
Connecticut: Two bills introduced last week New York: Bill introduced this week
Threats California: SF Board of Supervisors Resolution Wisconsin: Possible re-introduction of bill
Hold-Overs Illinois Pennsylvania Michigan New York
®
45
Do Not Mail
Why your involvement is critical:
Existing relationships with state legislators
Focus on consequences to constituents
Get the story out
Educate with facts
®
46
Do Not Mail
Economic impact • USPS 2nd largest employer• Mail is 1/3rd of GDP• Specific Direct Mail & USPS data for each state
Environmental impact• USPS environmental leader• Life Cycle Inventory & Greenhouse Gas study
findings• Mail small percentage of landfill• New and ongoing programs
®
47
Do Not Mail
Consumer interests • Enhanced mail preference services and
other industry efforts • Reduction of UAA mail • Critical differences between “Do Not Call” and
“Do Not Mail”
Identity theft/security • FTC study: 2% of ID theft involves mail• Inspection Service & federal laws provide
protection
®
48
Do Not Mail
Next Steps Schedule training as soon as possible for DMs
and others in the states with pending legislation or strong threat
Schedule training for those in other states
Provide information and tools for you to familiarize state elected officials with consequences of DNM legislation
Provide you updates on the status of DNM legislation
Be available to answer questions and provide additional information
®
49
ANY QUESTIONS?
REMEMBER:If you have questions or comments after
the presentation, you can send them to [email protected]
®
Webinar #13
Friday, February 6, 2009
“Budget Overview”
Presented by Tony Morrow
Manager, Budget & Financial Analysis
