Link Extra

USPS restructured

In an effort to operate in a more efficient and effective manner and better serve customers, Postmaster General Louis DeJoy today announced a modified organizational structure for the U.S. Postal Service.

The new organizational structure is focused on three operating units and their core missions:

• Retail and Delivery Operations — Accept and deliver mail and packages efficiently with a high level of customer satisfaction. This organization will be led by Kristin Seaver.
• Logistics and Processing Operations — Process and move mail and packages efficiently to the delivery units, meeting determined standards. This organization will be led by David Williams.
• Commerce and Business Solutions — Leverage infrastructure to enable growth. This organization will be led by Jakki Krage Strako.

“This organizational change will capture operating efficiencies by providing clarity and economies of scale that will allow us to reduce our cost base and capture new revenue,” said DeJoy. “It is crucial that we do what is within our control to help us successfully complete our mission to serve the American people and, through the universal service obligation, bind our nation together by maintaining and operating our unique, vital and resilient infrastructure.”

As part of the modified structure, logistics and mail processing operations will report into the new Logistics and Processing Operations organization separate from existing area and district reporting structures. This includes all mail processing facilities and local transportation networks offices. Splitting operations into the two organizations of Retail and Delivery Operations, and Logistics and Processing Operations, is designed to allow for improved focus and clear communication channels. The transition to this new organizational structure will take place over the next several weeks. Transition coordinators have been identified to assist in the process.

These organizational changes do not initiate a reduction in force, and there are no immediate impacts to USPS employees. However, to prepare for future changes, the Postal Service has implemented a management hiring freeze and will be requesting future Voluntary Early Retirement Authority from the Office of Personnel Management for non-bargaining employees.

An organization chart reflecting the new USPS structure is available at about.usps.com/who/leadership/officers/.

Link Extra

Transformative process

In remarks at his first open session Board of Governors meeting today, Postmaster General Louis DeJoy outlined his strategy for a “transformative process” for the Postal Service.

“Our goal is to change and improve the Postal Service to better serve the American public, and I am excited about the opportunities ahead,” said DeJoy. “I am enthusiastic and energized about the prospects for our future and our untapped promise.”

DeJoy praised the USPS workforce for employees’ dedication and commitment to serving the American people, and “the fantastic competencies” of the organization. “I believe that there are tremendous opportunities available to us, and I am very confident that we can turn our business around and become financially healthy, while remaining a vital part of the nation’s critical infrastructure,” he said.

Addressing the challenges facing USPS, DeJoy said the organization’s financial position is “dire,” stemming from “substantial declines in mail volume, a broken business model and a management strategy that has not adequately addressed these issues.” DeJoy noted that Congress and the Postal Regulatory Commission “have long delayed much needed legislative and regulatory reforms to help address the situation,” but that the Postal Service “will not and cannot wait for the legislative and regulatory process to save us.”

DeJoy said it is “absolutely imperative” for the Postal Service to operate efficiently and effectively, while continuing to provide service that fulfills the universal service mandate and meets customer needs.

“We have begun by vigorously focusing on the ingrained inefficiencies in our operations,” said DeJoy. “To start with, we have taken immediate steps to better adhere to our existing operating plans, which were developed precisely to ensure that we meet our present service standards in an efficient and effective manner. By running our operations on time and on schedule, and by not incurring unnecessary overtime or other costs, we will enhance our ability to be sustainable and to be able to continue to provide high-quality, affordable service.”

DeJoy said, “As we implement our operating plans, we will aggressively monitor and quickly address service issues.”  DeJoy said customers and employees can rest assured that operational practices will be continually reviewed and adjustments made as required “to ensure that we operate in an efficient and effective manner.”

The Postmaster General also took the opportunity to clear up misconceptions that have been raised in the media and social media:

“First, while I certainly have a good relationship with the president of the United States, the notion that I would ever make decisions concerning the Postal Service at the direction of the president, or anyone else in the administration, is wholly off-base,” said DeJoy. “I serve at the pleasure of the Governors of the Postal Service, a group that is bipartisan by statute and that will evaluate my performance in a nonpartisan fashion. The Postal Service itself has a proud tradition of being a nonpartisan organization, which I believe is one reason why the Postal Service is consistently rated by the public as the most trusted federal entity. I intend to uphold the trust that has been placed in me by the Governors, and to fulfill my responsibilities to this organization and to the public interest, by trying to make good decisions through the exercise of my best judgment and business acumen gained through 35 years of commercial experience, and not based upon any partisanship.

“Second, let me be clear that with regard to Election Mail, the Postal Service and I are fully committed to fulfilling our role in the electoral process. If public policy makers choose to utilize the mail as a part of their election system, we will do everything we can to deliver Election Mail in a timely manner consistent with our operational standards. We do ask election officials and voters to be mindful of the time that it takes for us to deliver ballots, whether it is a blank ballot going to a voter or a completed ballot going back to election officials. We have delivery standards that have been in place for many years. These standards have not changed, and despite any assertions to the contrary, we are not slowing down Election Mail or any other mail. Instead, we continue to employ a robust and proven process to ensure proper handling of all Election Mail.”

DeJoy outlined how the Postal Service has been working closely with election officials throughout the country to ensure that they are well educated about the mailing process and can use the mail effectively to administer elections. “Ensuring that election officials throughout the country have an understanding of our operational parameters, including the circumstances under which we postmark mail and our delivery standards, so that they can educate voters accordingly, is important to achieving a successful election season,” he explained. “Although there will likely be an unprecedented increase in election mail volume due to the pandemic, the Postal Service has ample capacity to deliver all election mail securely and on-time in accordance with our delivery standards, and we will do so. However, as discussed, we cannot correct the errors of the election boards if they fail to deploy processes that take our normal processing and delivery standards into account.”

A third misconception that DeJoy addressed covered his role as Postmaster General. “I was not appointed by the Governors to position the Postal Service to be privatized or to manage its decline,” he said. “To the contrary, I accepted the job of Postmaster General fully committed to the role of the Postal Service as an integral part of the United States government, providing all Americans with universal and open access to our unrivaled processing and delivery network, as reflected in the Mission Statement that the Board adopted on April 1, 2020. I fully embrace six-day delivery of mail and packages as one of this organization’s greatest strengths and I plan to invest in tools and equipment for our letter carriers, as well as enhance the stability of our non-career workforce, to continue to provide the nation’s most trusted service. I accept the responsibility that the Governors gave me to maintain and enhance our reputation and role as a trusted face of the federal government in every community, and I intend to work with postal executives, management associations, managers, union leadership, and our craft employees to do everything I can to put us back on a financially stable path.”

“I am confident that we can chart a path forward that allows the Postal Service to fulfill our vital public service mission in a sustainable manner. I look forward to the challenge, and know we are up to it.”

To read the Postmaster General’s full remarks, go to the USPS Newsroom.

USPS finances

The coronavirus pandemic continues to have an unpredictable effect on the Postal Service, the organization’s latest financial report shows.

The results, released Aug. 7, show USPS reported total revenue of $17.6 billion for fiscal year 2020’s third quarter (April 1-June 30), up 3.2 percent compared with the same period one year earlier.

However, as a result of the pandemic — and to a lesser extent, ongoing mail declines — revenue from USPS mail services, the organization’s largest sales category, continued to significantly decline during the quarter.

Compared with the same quarter last year, First-Class Mail revenue decreased 6.4 percent, while volume declined 8.4 percent. Marketing Mail revenue fell 37.2 percent, while volume dropped 36.4 percent.

Meanwhile, shipping and packages revenue increased 53.6 percent and volume increased 49.9 percent compared with the same quarter one year earlier.

The shipping results, driven by the surge in online shopping due to quarantines and stay-at-home orders during the pandemic, were largely offset by higher expenses, given that packages represent the Postal Service’s most labor-intensive revenue stream.

In addition to increased labor costs to support this volume increase, transportation expenses were affected as logistics restrictions and limitations associated with the pandemic led to fewer modes of available transportation, especially air transportation.

The pandemic also significantly increased the Postal Service’s expenses for supplies and services, such as personal protective equipment, and also increased paid sick leave.

The organization’s total operating expenses were $19.8 billion, up 2.5 percent compared with the same quarter last year. The net loss for the quarter was $2.2 billion compared with a net loss of $2.3 billion for the same quarter one year earlier.

“Significant declines in our mail volumes as the result of the pandemic were largely offset by corresponding growth in our package business, but the reality remains that the Postal Service is in a financially unsustainable position absent significant fundamental change,” said Postmaster General Louis DeJoy.

“As we work on a plan to ensure our future, we will continue to focus on efficiency and revenue growth opportunities while delivering vital services for the country, and our dedicated employees on the front line continue to provide trusted, safe and secure service. Despite our very significant challenges, I remain optimistic about the future of the Postal Service, but we need to get moving to effect change immediately.”

The Postal Service’s news release has more information.

Talking points

Two Illinois Postmasters have submitted more than 50 sales leads between them this year.

The Postal Service recently recognized Mardi Hudson of Galena, IL, and Jo Bittinger of Sterling, IL, for the revenue their leads, submitted through the Business Connect program, have brought in.

The organization has designated August as Business Connect Month to celebrate the program, which is a way for Postmasters, managers and supervisors to initiate discussions with customers about USPS products and services.

The Postmasters shared some advice on reaching out to local businesses.

“Go to the stores,” said Hudson. “Observe what’s coming into your office. If you don’t know what your customers are mailing, you’re not going to be successful in our business.”

Bittinger agreed about the importance of having conversations.

“Especially now, when companies are looking for ways to get their product out,” she said.

Since its inception in 2005, the Business Connect program has generated more than $3.95 billion in new estimated annualized revenue, including more than $320 million for the current fiscal year.

This year’s Business Connect revenue is counted toward the Postal Service’s Race for a $Billion campaign goal.

The initiative — which is at $965 million, according to an Aug. 6 ranking of all district contributions — aims to raise $1 billion through employee-provided sales leads before the fiscal year ends Sept. 30.

“Mardi and Jo know the importance of talking to our customers,” said Mary Anderson, small-business engagement director at USPS headquarters. “When we know what their businesses need, we can make a difference for them.”

The Sales Blue page has more information about Business Connect and the Postal Service’s other lead-sharing programs, which include Clerks Care, Customer Connect, Mail Handlers, Rural Reach and Submit a Lead.

Share your feedback at uspslink@usps.gov. Your comments could be included in the “Mailbag” column.