AUSPL CONFERENCE 2015 Tom Samra Vice President, USPS Facilities - PowerPoint PPT Presentation

AUSPL CONFERENCE 2015 Tom Samra Vice President, USPS Facilities April 2015

AGENDA  USPS – STATE OF THE UNION  USPS – FACILITIES REORGANIZATION  Leasing  New - Conflict of Interest Forms  Maintenance (EMCOR)  Purchase Existing Building (PEB) considerations  REAL ESTATE TAX ABATEMENT PROGRAM  AUSPL/USPS COOPERATIVE OPPORTUNITIES  QUESTIONS AND ANSWERS 2

STATE of the UNION USPS STATE of the UNION 3

HELPING BUSINESSES CONNECT & GROW CONNECTING & INFORMING CONVENIENT, AFFORDABLE CITIZENS & COMMUNITIES UNIVERSAL SERVICE PROMPT, TRUSTED, SECURE, RELIABLE SERVICES RESPECTED BRAND USPS MISSION:

The Unrivaled Network 5

USPS Global Footprint 31,000 300+ 8,500 POST PROCESSING PROCESSING OFFICES CENTERS EQUIPMENT 210,000 600,000 153M VEHICLES EMPLOYEES DELIVERY POINTS Delivering 40% of the World’s Mail

Business Platforms First Mile Physical Network Last Mile Digital  Retail  Mail Processing  Carrier delivery  Secure digital Centers communication  Collection boxes  Home and  Carrier pick-up  Post Offices  Identity business customer authentication  usps.com  Transportation interaction  Sales assets  Post Offices  Business mail acceptance  Self-serve 7

Challenges Volume Universal Service Declining Fixed cost  Transactional volume steadily base Obligation declining due to e-diversion  Advertising mail is subject Postal network driven by: to more substitution options  Delivery points  Mail volume highly sensitive  Retail locations These trends will to economic changes  Sortation facilities  Mail mix changes –  Six-day delivery continue to put lost profit contributions pressure on USPS ability to provide Price Labor Costs affordable universal  ~80% of total costs  Limited pricing flexibility service  COLA increases  Benefits: pensions, retiree health, health insurance  Limited flexibility Rising cost  Retiree prefunding Rising but per hour obligation, rising workers’ capped compensation costs 8

Projected Mail Volume By Major Classes of Mail 90 80 Std. Mail grows 2% 70 Volume (billions) 60 50 FCM declines 22% 40 30 20 Packages grow 49% 10 0 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 First Class Standard Packages 9

Continuous Efficiency $16 Billion of Annualized Savings in the past eight fiscal years with workhours reduced by 24% 1,500 $18.0 1,459 $16.1 $15.6 $16.0 $14.9 1,423 $13.9 1,400 $14.0 $12.8 1,373 Total Work Hours $11.4 $12.0 ($ billions) 1,300 Savings (millions) 1,258 $10.0 Cumulative Savings $8.3 $8.0 1,183 1,200 1,149 $6.0 1,122 1,110 1,107 1,102 $4.0 $3.5 1,100 $1.5 $2.0 1,000 $0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 IFP Total Work Hours

Business Imperative  Financial losses of $26 Billion over last 3 years  Continued decline of First-Class Mail volume  Increasing wage inflation and operating costs  Debt pressures  Uncertainty regarding legislative reform  Review of postal prices in courts  Needed capital investments to acquire package sorting equipment and replace aging delivery vehicle fleet 11

USPS Business Plan  Closing the Gap  Legislative Initiatives  Operational Initiatives  Transforming Infrastructure  Continuous Improvement  Workforce  Increased Flexibility

Closing the Gap Infrastructure  Network  350 Processing Facilities Eliminated  320 Processing Facilities Remain  Retail  POST Pan – 50% of Post Offices Moved to Part-Time  Consolidated 2,413 Delivery Units  Delivery Streamline Governance Model  Eliminated 24,000 Delivery Routes since 2006  60% of New Delivery is Centralized 13

TECHNOLOGY “Leveraging INNOVATION and to drive CUSTOMER AND BUSINESS VALUE” 14

Visibility Provides Business Intelligence

Visibility Provides Business Intelligence Apply an intelligent and trackable barcode to every mail product STRATEGY  IMb for letters and flats  IMPb for packages  IMtb for trays and sacks  IMcb for pallets and containers

Visibility Provides Business Intelligence Scan all mail products for all events across the USPS network STRATEGY  Expand the number of events provided  Ensure all postal sites have scanning capability for all events  Move to real-time delivery information

Our Customers Expectations Consumers’ busy lifestyles demand more delivery convenience These changes Growing set new consumer expectations Consumer Expectations New businesses take notice of these demands and offer more expedient deliveries Existing players improve their offerings to meet demand 18

QUESTIONS QUESTIONS 19