U.S. Postal Service is more focused, efficient than ever

A recent column by John Nash regarding the state of the U.S. Postal Service is a reminder that many people are unaware of the improvements in service and cost-cutting efforts performed by the postal service.

The postal service has maintained a high level of customer service while facing continuing economic challenges. Third quarter service scores for overnight single-piece first-class mail remained at 96 percent on time, while the score for two-day, single-piece first-class mail improved 1 percentage point to 94 percent.

Much like every other corporation in America, The U.S. Postal Service has been hit hard by the current economic recession. Unlike most companies, and alone among all federal agencies, the postal service faces unique financial obligations - strains and constraints that would have a devastating and insurmountable impact if the postal service hadn't begun taking costs out of the system and embracing technology 10 years ago.

Two new technologies are moving us forward - the Intelligent Mail barcode and the Flats Sequencing System (FSS). FSS is new technology that will speed the sorting and delivery of large envelopes, catalogs and magazines, quadrupling productivity. FSS machines also will be able to read the Intelligent Mail barcode, allowing mailers and the postal service to track mail throughout the sorting process, improving service and reducing costs to mailers and consumers.

In addition to technological advances, the U.S. Postal Service negotiated an agreement with two of its employee unions to offer select employees a financial incentive to retire or resign before the end of the fiscal year - a decision that could save hundreds of millions of dollars in labor-related costs.

Also on the labor front, which Mr. Nash cites as a problem, it's important to note that in the last 10 years employee complement at the postal service has been reduced from 797,795 to 641,000, all done through attrition and not resulting in layoffs. We are delivering mail to 15 million more addresses with 150,000 fewer employees than 10 years ago!

In his annual state of the business address to the mailing industry on Sept. 16, Postmaster General John E. Potter outlined a roadmap for recovery and reaffirmed the postal service's focus on adapting to changing customer needs and a changing marketplace.

Despite what Potter called, "one of the most difficult economic climates any of us have ever experienced," the postal service managed to cut spending by $6 billion in 2009, while maintaining record levels of customer service and trust.

The postal service -- already the "Most Trusted Government Agency" for the past five years -- was ranked the third "Most Trusted Company for Privacy" for 2009, according to Ponemon Institute consumer survey results. The postal service moved up three positions from last year, and only eBay and Verizon ranked higher in levels of customer trust.

One of the ways the postal service is increasing customer value is by pursuing aggressive marketing strategies and pricing and product innovations. Earlier this year, the postal service launched one of its largest and most integrated advertising campaigns promoting ways businesses and consumers can simplify shipping with flat-rate boxes, one of the best bargains in the marketplace.

In addition, recent "Summer Sale" and "Saturation Mail" incentive programs have made it easier for businesses to continue results-driven direct marketing campaigns in a down economy.

The postal service also has been working closely with Congress and the Obama administration on legislative actions that would help it manage huge statutorily imposed cost mandates, provide greater flexibility and allow the postal service to operate more like a business.

"The simple fact is that the status quo is unacceptable," said Potter. "The postal service must have the ability to manage its business, to adapt quickly to the needs of our customers and the marketplace. And our business model must change to reflect the reality of a volatile economy and a communications marketplace that has been undergoing a transformation as profound as anything that has ever come before."

Potter cited three key areas in which the postal service is seeking legislation:

Changes to the accelerated payment schedule to pre-fund retiree health benefits statutorily mandated by the Postal Accountability and Enhancement Act of 2006. Under current law, the postal service is required to make an annual payment of more than $5 billion into a trust fund. Legislation currently under consideration in Congress would ease the financial pressure while the postal service pursues the long-term actions necessary to cut fixed costs.

Ability to adjust the capacity of the postal dervice's network to bring it in line with reduced mail use. Eliminating Saturday delivery could save the postal service as much as $3.5 billion a year.

Flexibility to expand product offerings into new areas that leverage the postal service's unmatched scope, reach and presence of its distribution, transportation and retail networks to achieve their full revenue potential. The postal service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.

In the meantime, Potter said the postal service remains focused on, as it has for 230 years, providing universal, affordable service to all Americans.

Mr. Nash, I look forward to your updated premise regarding the United States Postal Service.