Roadmap to the Future

The Postal Service’s self-described “roadmap to the future” is spelled out in its update to its Strategic Transformation Plan (2006-2010), which the USPS has just released.

The sixty-two page document reaffirms many of the same goals that were embraced in the original Transformation Plan published by the Postal Service five years ago.

While the fundamental goal of universal service has remained, some of the major routes the Postal Service will use to get to that goal have changed. Here's a run-down of the major themes of the updated Transformation Plan:

Pricing and Product Flexibility. Under the new law, the Postal Service will be able to generate a profit and plow those earnings back into the business. To generate sufficient revenue, the Service also will have greater flexibility to create new products and more easily set prices. This will demand a whole new understanding of mail and shipping market segments and their costs and profitability. The dynamics and adaptability of pricing will require creative thinking and agility in ways to which the Postal Service has not entirely been accustomed in the past.

Intelligent Mail. The introduction of intelligent mail barcodes for mailpieces and containers will take the Postal Service into a new era. “Total Mail Visibility” is the USPS vision for the IM-based world. The new IM barcode contains triple the information of previous barcodes, permitting tracking of individual mailpieces at all steps in the process, from creation by the mailer, to its deposit with the Postal Service, through transportation and processing, right up to delivery. This provides tremendous value to USPS and its customers.

Service Standards and Measurement. As required by the PAEA, the Postal Service has embarked on a path to measure service performance for all classes of mail according to defined standards. The journey began last year with USPS revisions to standards for all mailing service, and its pending proposal to the PRC to create a new, hybrid measurement system, expanding EXFC to all 3-digit areas and blending EXFC data and Product Tracking System data with IM-based data.

Cost Containment through Process and Network Improvements. The USPS anticipates that two-thirds of the $1 billion in savings it seeks in 2008 will come from process improvements, especially through the new Flats Sequencing System. Additional savings will be captured through other initiatives, including changes to the postal network and more effective use of part-time and temporary employees, supported by the new labor contracts. Noticeably, the Transformation Plan does not refer to the contracting-out of delivery routes, but this remains a potential route that USPS officials believe will drive down labor costs.

Enhanced Sustainability. Aiming to create a “conservation culture”, the Postal Service – as well as its high-volume customers – are increasingly recognizing that enhancement of the value of mail means include greater attention to recycling, reducing waste and trimming energy use. “Going green” means integrating conservation into every phase of day-to-day operations and engaging all employees to take ownership and responsibility.