Download - Mailers Webinar Feb 2012
-
8/3/2019 Mailers Webinar Feb 2012
1/16
1
USPS Financial FutureResponsibly Realigning Our Network
February 2012
-
8/3/2019 Mailers Webinar Feb 2012
2/16
2
VolumeVolume
PricePrice Labor CostsLabor Costs
Universal ServiceUniversal Service
ObligationObligation
Capped by inflation
Price elasticities are in flux
due to growing alternatives
Postal network driven by:
Delivery points
Retail locations
Sortation facilities
Six-day delivery
~80% of total costs
COLA increases
Benefits: pensions, retireehealth, health insurance
Limited flexibility
Retiree prefundingobligation, rising workerscompensation costs
These trends willThese trends will
continue to putcontinue to put
pressure onpressure on USPSUSPSssability to provideability to provide
affordable universalaffordable universal
serviceservice
DecliningDeclining
steadilysteadily Transactional volume
declining due to e-diversion Advertising mail is subject
to more substitution options
Mail volume highly sensitive
to economic changes
Mail mix changes lost profit contributions
Fixed CostFixed Cost
BaseBase
Rising butRising butcappedcapped
Rising CostRising Costper hourper hour
Situation Assessment: Mail
-
8/3/2019 Mailers Webinar Feb 2012
3/16
3
Mail Volume Shifting to Less Profitable Mix
Volume in Billions of Pieces
98
78
53
39
0
25
50
75
100
125
2006 2010 2016 2020
103
83 82 81
0
25
50
75
100
125
2006 2010 2016 2020
First-Class Mail Standard Mail
-
8/3/2019 Mailers Webinar Feb 2012
4/16
4
$20 Billion Cost Reduction By 2015
Note: Savings reflect early estimates/goals. Further updates business plan financials will be shared in the coming weeks
-
8/3/2019 Mailers Webinar Feb 2012
5/16
5
Realigning
Our NetworkReducing annual
operating costs
by $2.6 billion
-
8/3/2019 Mailers Webinar Feb 2012
6/16
6
Service Standards for:
- Priority Mail
- Express Mail
- Standard Mail
- Packages
BMEU locations, inthe near term
Destination SCFDiscounts (DSCF)
What is not Changing?
-
8/3/2019 Mailers Webinar Feb 2012
7/16
7
1Day1Day 2Day2Day 3Day3DayTodayTodays Delivery Distributions Delivery Distribution
1Day1Day
FirstFirst--Class Mail StandardsClass Mail Standards
*Dependent upon market adaptation
2Day2Day 3Day3DayLikely Future Distribution*Likely Future Distribution*
What is Changing?
-
8/3/2019 Mailers Webinar Feb 2012
8/16
8
24:00
06:00
12:00
18:00
04:00
08:00
OutgoingOutgoing
OperationsOperations
(5:00PM(5:00PM 12:30AM)12:30AM)ContinuousContinuous
DPS/SecondaryDPS/SecondaryOperationsOperations
(12:00PM(12:00PM 4:00AM)4:00AM)
IncomingIncoming
PrimaryPrimaryOperationsOperations
(8:00AM(8:00AM 12:00PM)12:00PM)BMEUBMEU(8:00AM(8:00AM 7:00PM)7:00PM)
Proposed 24-Hour Plant Operations
-
8/3/2019 Mailers Webinar Feb 2012
9/16
9
8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 0 1 2 3 4 5 6 7
Hour
Fed
8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 0 1 2 3 4 5 6 7
Hour
Fed
Non-steady flow of volumeConstrained Pick-up Windows
Steady flow of volumeExpanded Pick-up Windows
Constrained Window
Expanded Window
Option #1 Frequent pickups at future processing location
Option #2 Continue at current location or close proximity
ProposedExpanded Caller Service Solution
-
8/3/2019 Mailers Webinar Feb 2012
10/16
10
HubHub
ProcessingProcessing
PlantPlant
10
HubHub
HubHub
HubHub
HubHub
Proposed Area Hubs
-
8/3/2019 Mailers Webinar Feb 2012
11/16
11
No immediate change toacceptance locations or hours
120-day notice of future changes:
BMEU Moves/Consolidation
DSCF discounts continue
BMEU/DMU Hours of Operation
DMU Transportation
Labeling lists transition period
Customer support available
Svc Stds, CATs, CETs, Mail Prep Expand drop-ship appointments
at gaining facilities
Proposed Entry Unit Solutions
-
8/3/2019 Mailers Webinar Feb 2012
12/16
12
Proposed Service Standard Change- Publish Final Rule Mid-April
- Implementation After May 15
Proposed Network Realignment- AMP Decisions End of February
- Overall Realignment begins after May 15- No major changes during Fall mailing/peak season
Communication & Solutions- Dedicated micro-website Early March
- Local outreach/engagement Ongoing
- Industry solutions and planning Ongoing
Timing
-
8/3/2019 Mailers Webinar Feb 2012
13/16
13
Our Commitment
Robust site-specific project plans Deliberate timing of operational moves
Critical activities include:
- Employee moves- Equipment moves
- Transportation contracts
- Facility modifications
Labeling list changes six times a year Ongoing communications
Planning for Implementation
-
8/3/2019 Mailers Webinar Feb 2012
14/16
14
Committed to Keeping You Informed
-
8/3/2019 Mailers Webinar Feb 2012
15/16
15
We are doing our utmost to maintain the long-term
affordability of mail and high level of service
Network changes will be imperceptible to 150 millionresidential customers; seamless for businesscustomers
We are creating giant efficiency improvementsthroughout our network; take advantage by aligningyour logistical network with ours
We value your business and will provide responsiblesolutions throughout our transition
Concluding Thoughts
-
8/3/2019 Mailers Webinar Feb 2012
16/16
16
Questions?This presentation is posted online at:http://about.usps.com/news/facility-studies/welcome.htm