Greater New Jersey Greater New Jersey Executive Board Members - PowerPoint PPT Presentation

Greater New Jersey Greater New Jersey Executive Board Members Executive Board Members  Steve Hernandez, District Manager Northern New Jersey and Postal Co-Chair  James Mullan, Industry Co-Chair  Lauran Solvik, Vice Industry Co-Chair  Evan Kest, Treasurer  Catherine Behr, Secretary  Robert Spadaro, Industry Co-Chair Emeritus 2

Value in the PCC Network Value in the PCC Network Two Way Communication USPS Managers Responsible Network of Mailing and for the Collection, Processing Business Professionals and Delivery of Your Mail  Share Best Practices  Informational Webinars  Provide Feedback  Educational Workshops  Offer Solutions  eMail Alerts/Newsletters  PCC Website 3

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National PCC Week 2014 National PCC Week 2014 Patrick R. Donahoe Postmaster General and CEO  Competitive  Functional  Actionable  Creative  Personally Relevant 5

National PCC Week 2014 National PCC Week 2014 Nagisa Manabe CM&SO & EVP  Better Innovation  Greater Visibility  New Technology  Priority Mail Enhancements and Growth 6

National PCC Week 2014 National PCC Week 2014 Ronald Stroman Deputy Postmaster General  Transforming the Customer Experience  Accountability  Responsiveness Across All Channels  Exceeding Expectations 7

National PCC Week 2014 National PCC Week 2014 Megan J. Brennan COO & Executive VP  Service Improvement  Transform the Infrastructure  More Efficient, Technology Enriched Delivery Network  Innovate Across the Business Platforms 8

National PCC Week 2014 National PCC Week 2014 Delivery and Delivery and Retail Ops Retail Ops Post Office Post Office Operations Operations Facilities Facilities Network Network Operations Operations 9

Management Actions Management Actions  Network  More than 350 Processing Facilities Eliminated  Reduced over 75 Million Miles  Delivery  Eliminated 24,000 Delivery Routes  Consolidated 2,513 Delivery Units  Retail  POStPlan – 50% of Post Offices Realigned to Match Community Needs  Facilities  Eliminated over 6.7 million Square Feet Service has remained at predictable levels 10

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Major Optimization Initiative Major Optimization Initiative Units   2,513 Delivery Unit Consolidated Routes   24,000 City Routes Reduced Deliveries   Efficient Mode of Delivery 12

Delivery Mode Conversions Delivery Mode Conversions Current Policy/Strategies are Driving Migration to More Efficient Delivery Mode Fiscal Year 2013 FY 2013 Growth % Total DOOR CENTRAL Door Door (61.2K) (61.2K) (6%) (6%) 37.8M 40.5M Curbline Curbline 490.9K 490.9K 47% 47% 31% 28% Centralized Centralized 607.6K 607.6K 59% 59% CURBLINE 55.0M Total Growth Total Growth 1.04M 1.04M - - - - 41.0% 13

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USPS Retail Network USPS Retail Network 15

Retail Strategy Retail Strategy  Grow Revenue  Reduce the Cost to Serve  Transform Customer Experience in High Traffic Post Offices  Enhance Customer Convenience Through Expanded Retail Partnerships  Preserve Retail Services in Rural America  50% of Post Offices realigned to match community needs 16

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Facilities Optimization Facilities Optimization New Jersey Network Distribution Center – 1.4M Sq Ft 18 Ochopee FL Post Office – 62 Sq Ft

Facilities Optimization Facilities Optimization  Generate Revenue and Reduce Expenses by:  Selling owned buildings  Terminating leases  Re-purposing space Over 6.7M Sq. Ft. Over 6.7M Sq. Ft. Eliminated Eliminated 19

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Business Imperative Business Imperative  Financial losses of $26 Billion over last 3 years  Continued decline of First-Class Mail volume & revenue  Increasing wage inflation and operating costs  Increasing 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 21

Volume Decline Volume Decline Single Piece - First Class Letters 45 16.4% decline 40 since AMP 35 packages developed 30 Pieces (millions) 25 20 15 10 5 0 2007 2008 2009 2010 2011 2012 2013 2014 (est) Source: RPW, FY2007 – FY2013 22

Projected Mail Volume Projected Mail Volume By Major Classes of Mail By Major Classes of Mail Std. Mail declines 6% 23

Continuous Efficiency Improvements Have Continuous Efficiency Improvements Have Helped Mitigate Effects of Business Threats Helped Mitigate Effects of Business Threats $16 Billion of Annualized Savings in the past seven fiscal years with workhours reduced by 24% 1,500 $18 1,459 $15.8 $16 1,423 Total Workhours (Millions) $14.8 1,400 $13.7 $14 1,373 Savings (Billions) $12.3 $12 1,300 $9.3 $10 1,258 $8 1,183 1,200 1,149 $6 1,122 1,110 $4 $3.2 1,100 1,074 $2 $1.2 1,000 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 IFP Career Employees – Reduced by 205K since Postal Service is More Efficient Than Ever 2006, without layoffs 800 30 696 685 24.2 663 Annual Growth 1.2% [2000 – 2013] TFP Cumulative Trend 623 25 584 557 20 528 491 15 10 5 Annual Growth 0.3% [1972 – 1999] 0 '06 '07 '08 '09 '10 '11 '12 13 1972 1980 1990 2000 2013 24

A Deep Financial Hole A Deep Financial Hole Through FY14 Q3 Through FY14 Q3 • Liabilities exceed assets by approximately $44 billion • The USPS has only 35 cents of assets to cover each dollar of its liabilities ASSETS LIABILITIES Unrestricted Cash $ 5.0B Retiree Health Benefits $21.0B Buildings & Equipment, $16.5B Workers' Compensation $17.8B net of depreciation Debt $15.0B Other Assets $ 1.7B Accrued Compensation, $ 4.2B benefits, and leave Deferred Revenue $ 3.8B Other $ 5.3B Total Assets $23.2B Total Liabilities $67.1B • Under multi-employer accounting rules, there are approximately $47B in obligations not shown on the balance sheet  Significant profits over years and legislation are needed to recover 25

USPS Modeled Processing USPS Modeled Processing Network Phase II Network Phase II Total by Facility Type Annexes 2 Customer Service Facilities 16 DDC's 1 P&DC/P&DF's 63 Total 82 26

Plant Consolidation Plant Consolidation Decrease in Processing Locations Through 2016 800 673 623 614 599 600 528 487 461 417 400 320 319 239 200 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 At start of FY 27

Driving Efficiency Driving Efficiency PHASE II BENEFITS  Reduce Excess Capacity  More Efficient Transportation Network  Fully Utilized Workforce  Up to $750 Million Cost Reduction  Reduced Equipment  Reduced Footprint  Revised Entry Times  Preserves Approx. 66% of Overnight Delivery Volume 28

Concept of 24-Hour Plant Operations Concept of 24-Hour Plant Operations Continuous Outgoing DPS/ Secondary Operations Operations (5:00 PM – 12:30 AM ) 24:00 (12:00 PM – 6:00 AM ) Continuous Remittance/ 18:00 06:00 Caller Service 08:00 Processing 0800-0600 Incoming 12:00 Primary BM EU Operations (8:00 AM – 7:00 PM ) (8:00 AM – 12:00 PM ) 29

Employees Employees Methodical, measured transition Placement Options Available Proven track record of working with Union and Management Associations 30

Proposed Entry Unit Solutions Proposed Entry Unit Solutions  No immediate change to acceptance locations or hours  120-day notice for following changes:  BMEU Moves/Consolidation  BMEU/DMU Hours of Operation  DMU Transportation  Expand drop-ship appointments at gaining facilities  Effective Jan. 2015 to qualify for DSCF pricing mailers will be required to enter mail at the SCF defined in Labeling List (Federal Register Dec.18, 2013)  BMEU/PVDS Mailers should prepare mail according to effective labeling lists  Grace Periods Built into Labeling Lists  To assist in the transition the Postal Service has an exception process for BMEU mailers currently claiming SCF discounts at facilities scheduled for consolidation 31

High Levels of High Levels of Service Performance Expected Service Performance Expected Flawless Execution Early Warning System Recovery “Tiger Teams”  Early Warning System well established  Mail move plan updated and posted on RIBBS Tools &  Continued communication with the mailing industry Processes in  place to Site Intervention based on Early Warning System ensure High  Feedback system in place to address customer Level of issues: Service • CustomerFirst! System Performance • BSN eService • Local postal officials 32