Postal Service Outlines 10-Year Plan to Address Declining Revenue, Volume

/PRNewswire/ -- Facing unprecedented volume declines and a projected, cumulative $238 billion shortfall during the next decade, Postmaster General John E. Potter today outlined an aggressive plan of cost cutting, increased productivity, and an array of legislative and regulatory changes necessary to maintain a viable United States Postal Service.

"The crisis we're facing gives us an historic opportunity to make changes that will lay the foundation for a leaner, more market responsive Postal Service that can thrive far into the future," Potter said, stressing that there is no one single answer or quick fix to the crisis.

The Postal Service examined revenue, volume and consumer trends; analyzed revenue and product opportunities employed by foreign posts; and examined more than 50 possible actions to realistically address volume declines that will not return, increasing health care and delivery costs, and dramatic changes to consumer behavior.

"The future depends on a suite of solutions that takes a balanced and reasonable approach, one that cuts across every aspect of our industry but one that, in the end, does the greatest possible good for our stakeholders and the American public," Potter said.

Mail volume is projected to fall from 177 billion in 2009 to 150 billion in 2020. That represents a 37 percent decline in First-Class Mail alone. Revenue contributed by First-Class Mail will plummet from 51 percent today to about 35 percent in 2020.

"Ensuring a Viable Postal Service for America," the Postal Service business plan, addresses these challenges, and describes a flexible, agile Postal Service that can adapt to America's changing mailing habits and preferences.

If the Postal Service takes no action, it will face a cumulative shortfall of $238 billion by 2020. But Potter outlined a number of actions that could amount to as much as $123 billion in savings during that same time period. These actions build on the Postal Service's record of saving more than $1 billion every year since 2001 and include continuing to aggressively control costs and eliminating hundreds of millions of work hours.

Despite these efforts, an estimated $115 billion shortfall will remain. The business plan identifies actions to close that gap:

-- Restructure retiree health benefits payments to be consistent with
what is used by the rest of the federal government and the majority of
the private sector and address overpayments to the Postal Service
Civil Service Retirement System pension fund.
-- Adjust delivery days to better reflect current mail volumes and
customer habits.
-- Continue to modernize customer access by providing services at
locations that are more convenient to customers, such as grocery
stores, pharmacies, retail centers, and office supply stores. Increase
and enhance customer access through partnerships, self-service kiosks
and a world-class Website.
-- Establish a more flexible workforce that is better positioned to
respond to changing demand patterns, as more than 300,000 employees
become eligible to retire in the coming decade.
-- Ensure that prices of Market Dominant mailing products are based on
demand for each individual product and its costs, rather than capping
prices for every class at the rate of inflation.
-- A modest exigent price increase will be proposed, effective in 2011.
-- Permit the Postal Service to evaluate and introduce more new products
consistent with its mission, allowing it to better respond to changing
customer needs and compete more effectively in the marketplace.


"Lifestyles and ways of doing business have changed dramatically in the last 40 years, but some of the laws that govern the Postal Service have not. These laws need to be modernized to reflect today's economic and business challenges and the dramatic impact the Internet has had on American life," Potter said.

The business plan is a path to the future, the Postmaster General said, a future where the Postal Service remains a vital driver of the American economy, an integral part of every American community and continues to deliver the greatest value of any comparable post in the world.

"If given the flexibility to respond to an evolving marketplace, the Postal service will continue to be an integral part of the fabric of American life," Potter said.

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UPS Completes Deployment of 300 New “Green” Trucks

-(BUSINESS WIRE)--UPS (NYSE: UPS) yesterday announced it had deployed 300 new delivery trucks powered by Compressed Natural Gas (CNG) to seven cities in Colorado, Georgia, Oklahoma and California.

The CNG vehicles, part of an order placed last May, will allow UPS to further reduce its dependence on traditional fossil fuels like gasoline and diesel and lower its carbon footprint. UPS already operates the largest private fleet of alternative fuel vehicles in its industry – 1,819 in total with these additions.

The new CNG trucks have been deployed over the past month to Denver (43); Atlanta (46); Oklahoma City (100), and four cities in California: Sacramento (21), San Ramon (63), Los Angeles (9) and Ontario (18). All now are in service.

“Deploying alternative fuel vehicles dates back to the early days of UPS and this CNG deployment is one more step towards the greening of our fleet,” said Robert Hall, UPS’s director of vehicle engineering. “Continuing to add CNG delivery trucks to our fleet is a sustainable choice because natural gas is a cost effective, clean-burning and readily available fuel.”

UPS first began deploying trucks powered by CNG in the 1980s, purchasing traditional gas- or diesel-driven vehicles and then converting them to run on compressed gas. The 300 trucks deployed over the past month were built from scratch as CNG vehicles. They join more than 800 CNG vehicles already in use by UPS worldwide.

The CNG truck bodies are identical externally to the signature-brown trucks that comprise the UPS fleet. Marked with decals as CNG vehicles, the trucks are expected to yield a 20 percent emissions reduction over the cleanest diesel engines available in the market today.

For its alternative fuel fleet, UPS has deployed CNG, Liquefied Natural Gas, propane, electric and hybrid electric vehicles in the United States, Canada, Mexico, Germany, France, Brazil, Chile, Korea and the United Kingdom. The company recently announced the purchase of seven hydraulic hybrid delivery vehicles, a first in the industry, and has conducted research with hydrogen fuel cell vehicles.

UPS began deploying alternative fuel vehicles in the 1930s with a fleet of electric trucks that operated in New York City. Just since 2000, the company’s “green fleet” has traveled 144 million miles.

“Deploying eco-friendly delivery vehicles is one of the many ways UPS demonstrates its commitment to sustainable business practices,” added Hall. “The company plans to continue to expand its ‘green fleet’ and to focus deployments in areas with air quality challenges.”

UPS pursues a wide range of socially responsible and sustainable business practices designed to reduce its impact on the environment and improve communities around the world. UPS is included in the Dow Jones and FTSE4Good Sustainability Indexes, which evaluate corporations based on economic, environmental and social criteria. Learn more about UPS's responsible business practices at www.sustainability.ups.com.

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