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FEBRUARY 2010

FRONT PAGE WHAT'S UP INSIDE SCOOP
KEEPING POSTED SPOTLIGHT ON SUCCESS INFO@USPS

FRONT PAGE

USPS BEGINS 2010 WITH FIRST-QUARTER LOSS

OVERNIGHT DELIVERY PERFORMANCE AT 96 PERCENT

Letter carrier delivering mail.

The Postal Service ended the first quarter of this fiscal year with a net loss of $297 million, while posting continued high scores in quarterly delivery performance.

"In spite of the financial challenges we face today, Postal Service employees never lose sight that customer service is our top priority," said Postmaster General John Potter, noting that performance for First-Class Mail during the heaviest volume period of the year either maintained at record levels or improved across all measured categories.

"On-time delivery performance for single-piece overnight First-Class Mail held at 96 percent for the fifth straight quarter," Potter said. "It's a tremendous result and we are proud to provide the highest levels of service to our customers."

The 2010 first-quarter financial results reflect continued effects of the recent recession, as well as continued migration of mail to electronic alternatives.

"Unfortunately, economic drivers that significantly affect mail volumes, such as continuing high unemployment levels and lower investments, appear to be lagging general economic recovery and last quarter's growth in GDP (gross domestic product)," said Joseph Corbett, chief financial officer and executive vice president. "This situation, coupled with the growth in electronic alternatives to mail, creates a very challenging environment."

Some economic indicators point to the beginning of a slow recovery, but downward pressure on mail volumes is expected to continue throughout 2010. "Our volume for 2010 is projected to be approximately 167 billion pieces, a decline of approximately 10 billion pieces from last year's total," Corbett said.

The quarter ending Dec. 31 is typically the strongest quarter for the Postal Service due to seasonal business and holiday mailings. A first-quarter 2010 revenue decline of 3.9 percent and expense decline of 4.4 percent resulted in a net loss of $297 million, a slight improvement compared to the net loss of approximately $384 million for the same period in 2009. First-quarter volume was 45.7 billion pieces, compared to 50.2 billion in the same period last year, or 8.9 percent below 2009. Total operating revenue for the quarter was $18.4 billion, compared to $19.1 billion in the first quarter of 2009.

The first quarter loss is not unexpected, despite ongoing aggressive cost reduction initiatives. Fiscal year 2009 cost savings totaled $6 billion and efforts continue into 2010. USPS reduced work hours for the first quarter by more than 28 million, or the equivalent of 15,800 full-time employees - on top of a reduction of 115 million work hours, or the equivalent of 65,000 full-time employees last fiscal year. Work-hour reductions are achieved through continued efficiency improvements and matching workloads to lower mail volumes. In many categories, USPS has gone beyond savings attributable only to lower volumes. For example, while first quarter volumes declined 8.9 percent, mail processing hours were driven down by more than 14 percent.

With net losses reported for 2007, 2008 and 2009, the continued negative trend in fiscal 2010 raises significant uncertainty about the Postal Service's ability to generate sufficient cash flows to fund large cash payment obligations in September and October 2010.

The situation is compounded by the requirement established in postal reform legislation of 2006 that the organization pay $5.4 billion to $5.8 billion annually to prefund retiree health benefits - a requirement no other government or private sector organization faces. Last year, Congress enacted legislation to restructure the payment for 2009. However, there is no assurance that similar adjustments will be granted in 2010, or at all.

Complete first-quarter results are available in the Postal Service's Form 10-Q report at usps.com/financials (click Form 10-Q under Quarter Reports).

PVDS WEBINAR

LEARN ABOUT BULK MAIL AND DROP-SHIP ACCEPTANCE FOR 2010

The Postal Service continues to look at all areas of its business with an eye to becoming more efficient and cost effective. At the same time, our commitment to customer service remains a top priority.

With this in mind, over the past few weeks the Postal Service has invited customers to attend Plant Verified Drop Shipment (PVDS) webinars that touch on bulk mail and drop-ship acceptance for 2010.

For those of you who have not yet attended a PVDS webinar, we are offering you the chance to take part in one this Friday, Feb. 19, beginning at 12:30 p.m. (ET). Join Steve Kearney, senior vice president, Customer Relations, Vincent DeVito, vice president, controller and Pritha Mehra, vice president, Business Mail Entry and Payment Technologies, for a discussion of improvements coming this year, followed by a question and answer session.

Here's how to attend the 90-minute webinar:

Audio only:

  • Dial 1-877-512-0764, meeting ID: 2979650.

Web conference with audio:

  • Go to http://meetingplace5.usps.gov/join.asp?2979650.
  • After the MeetingPlace window opens, click the phone icon (under the participant list or in the upper right-hand corner).
  • Click connect me and validate your phone number, or update your phone number and click connect me again.
  • When the MeetingPlace system calls you on your phone, press #1 to join the webinar.

Contact Pete Allen, manager, Business Customer Relations, at 202-268-2165 or e-mail william.a.allenjr@usps.gov if you have any questions.

DELIVERING THE COUNT

U.S. CENSUS MAILINGS START THIS MONTH

The Postal Service has a crucial supporting role in the 2010 census, delivering forms and other mailpieces for the Census Bureau as it conducts its count of the nation's population.

As part of its public awareness campaign, the Census Bureau is telling Americans, "We can't move forward until you mail it back."

Beginning this month through mid-April, there will be a series of mailings expected to total approximately 426 million pieces. It will be the single largest use of Intelligent Mail barcodes on any mailing to date, enabling speedier processing of this important mail and providing tracking and address correction information for both the Postal Service and the Census Bureau.

"We have been working to make sure our acceptance, transportation, operations and delivery functions are ready to handle it," says Steve Kearney, senior vice president, Customer Relations. "All of our efforts will ensure that the census mail volume will not affect, in any way, service performance for our customers."

WHAT'S UP

BUILDING RELATIONSHIPS THROUGH DIRECT MAIL

Mailing industry observers and consumers are noting an increase in direct mail in their mailboxes, including credit card offerings, catalogs and initiatives by retailers and restaurants designed to drive store traffic. And that makes a series of new sessions at the National Postal Forum (NPF) especially timely. "Direct mail is the workhorse of any marketing plan," says Steve Kearney, senior vice president, Customer Relations, noting that the upcoming NPF, April 11-14 in Nashville, TN, will feature workshops on customer acquisition and loyalty, including building relationships, ROI and value.

"There is no greater opportunity than the National Postal Forum to connect with businesses, organizations and people who shape the mailing industry," says Kearney. "From people in the know to people you need to know, NPF offers leading-edge strategies to navigate and succeed in today's business world."

More than 4,000 mailing industry professionals are expected to attend the NPF, the industry's premier event and tradeshow. In addition to direct mail, there will be sessions on Intelligent Mail, future business model of USPS, exploring five-day delivery and a discussion about the current state of the industry.

And, as always, NPF will start off with the PCC Leadership Conference. This year the PCC track will feature seven workshops, including the opening session April 11. Make plans now to attend. PCC members get a discount on NPF registration. For more information and to register, go to npf.org or call 703-218-5015.

READ, RESPOND, RECYCLE

Read, Respond, Recycle.

More than 200,000 tons, and counting. That's how much paper, plastics and other waste the Postal Service recycled in 2009, representing a decrease in its greenhouse gas emissions of approximately 1.67 million barrels of oil.

An integral part of that undertaking is the Post Office Box Lobby Recycling program which is expanding to include an additional 2,435 Post Offices, including those in a number of U.S. national parks. That brings the total number of participating sites to more than 8,064, an increase of 150 percent from 2005, when the Post Office Lobby recycling effort started. This program is based on the success of similar mail recycling programs in the northeastern part of the United States, which began more than 10 years ago.

Postal customers are being encouraged to "read, respond, recycle" their PO Box mail in Post Office lobbies as a convenient and environmentally responsible alternative to taking it home to discard.

TOTAL PACKAGE

The Postal Service this fiscal year introduced a new method of measuring the quality of service it provides to customers. The new system - Customer Experience Measurement (CEM) - replaces Customer Satisfaction Measurement and focuses on customers' end-to-end experiences in doing business with USPS.

This CEM system measures all aspects of the customers' experience - including their motivation, buying processes and perceived service quality across all channels - and will help USPS identify areas where customer expectations are not being met.

"CEM will help the Postal Service better understand our customers' perspective," said Vice President and Consumer Advocate Delores Killette. "By measuring customers' experiences across all contact points, the Postal Service will build stronger relationships with customers and become a more customer-focused organization."

FYI

The latest issue of PCC Management Insights is now available online at usps.com/nationalpcc/resources.htm. It features an article on how the Postal Service is keeping Americans informed about its green activities.

Inside Scoop. Americans have selected USPS as the most trusted government agency for five years in a row.

KEEPING POSTED

2010

  • National Postal Forum, April 11-14, Nashville, TN. For information, go to npf.org.

INFO@USPS

YOUR LINKS TO MAILING RESOURCES

U.S. Postal Service: usps.com
National PCC Network: usps.com/pcc
RIBBS: ribbs.usps.gov
Questions? Comments? Send an e-mail to pccinsider@usps.gov
Sign up for PCC Insider at usps.com/pcc, select “PCC Insider Registration”
Back issues: PCC Insider online archive

SPOTLIGHT ON SUCCESS

MARKETING THE HALLS OF KNOWLEDGE

More colleges and universities are using direct mail to attract students, reports The New York Times.

Last fall, more than 100 colleges and universities paid a marketing company to send out "fast-track" applications, a five-fold increase since 2006. Some institutions have spent more than $1 million on their campaigns, which feature simplified application forms, fee waivers or free baseball caps.

The results? Applications at some schools have tripled in the last two years.

© 2010 United States Postal Service. The following are among the many trademarks owned by the United States Postal Service: USPS®, U.S. Postal Service®, United States Postal Service®, Postal Service™, Post Office™, Priority Mail®, Express Mail®, Standard Mail™, First-Class Mail®, Registered Mail™, Certified Mail™, RIBBS™, Delivery Confirmation™, Signature Confirmation™, ZIP Code™, Click-N-Ship®, FOREVER®, NetPost®, Intelligent Mail®, PCC Insider® and The Postal Store®. This list is not a comprehensive list of all Postal Service marks. See our privacy policies at usps.com. If you prefer not to receive future e-mail communications from the Postal Service, contact PCC Insider to stop future e-mails. Write us at: PCC Insider, U.S. Postal Service, 475 L’Enfant Plaza Rm 2P546, Washington DC 20260-0546



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