USPS released its “2010 Comprehensive Statement on Postal Operations” yesterday. In the report USPS states that postal employees wages and benefits will become more costly over the next 10 years. According to USPS,” Wages and benefits account for 80 percent of Postal Service costs, and work hours will also become more costly due to rising benefits costs. But the report also states: ” Delivery is the largest postal operation, accounting for approximately 47.4 percent of salary and benefit expenses.” While the Postal Service has collaborated with its unions to structure reasonable compensation options, and has been negotiating since September with two of the four largest postal employee unions federal statutes hamper its ability to craft a market-based benefits package. USPS also reported: during calendar year 2009 the following persons received compensation in the amounts listed in excess of the rate for level 1 of the Executive Schedule.
Below are some excerpts from the report:
Wages and benefits account for 80 percent of Postal Service costs, and work hours will also become more costly due to rising benefits costs. In each of the next 10 years, workers’ compensation costs are projected to rise by 2 to 4 percent, and health insurance premiums by 4.7 to 5.2 percent. While the Postal Service has collaborated with its unions to structure reasonable compensation options, and has been negotiating since September with two of the four largest postal employee unions—the American Postal Workers Union (APWU) and
the National Rural Letter Carriers Association (NRLCA)—federal statutes hamper its ability to craft a market-based benefits package.3 A proposed change in the law would require arbitrators to consider postal finances as part of their arbitration deliberations. In the meantime, as more than 300,000 employees become eligible to retire in the coming decade, there is a need to establish a more flexible workforce that is better-positioned to respond to changing customer demands.
Managers continue to improve their use of data to better align staffing with changing workload. There were 583,908 career employees at the end of 2010, which is 39,220 fewer than last year. There were also 87,779 noncareer employees. Reductions occurred in bargaining and nonbargaining categories and managers continue to plan for steady employee attrition by repositioning employees based on current and future resource requirements. Approximately 75 million work hours were saved in 2010. This is in addition to 115 million hours reduced the previous year, 50 million hours in 2008, and 36 million hours in 2007. Over four years, the Postal Service achieved a total reduction of 276 million work hours,
the equivalent of 157,000 full-time employees. In customer service operations, scheduling improvements were the lead factor in saving 18 million work hours. In city delivery,
1,108 routes were eliminated, in addition to pivoting open routes and managing work hour variances, which contributed to savings of 16 million work hours. The number of delivery vehicles and related support costs were also reduced.
Delivery and Pickup
Delivery is the largest postal operation, accounting for approximately 47.4 percent of salary and benefit expenses. Despite an increase of 739,580 delivery points, there were 16.2 million fewer city delivery work hours used due to route adjustments and effective growth management. The use of modeling software and a corporate-wide focus on continuous improvement led to an 11.6 percent gain in city delivery office efficiency and a 1.7 percent improvement in city street efficiency.
PostalReporter note: As GAO pointed out in a report to Congress:
Declining volume reduces USPS’s revenue, but it does not necessarily reduce costs commensurately. Many of the costs associated with its delivery network are fixed, and these fixed costs are difficult to reduce as volumes decline. USPS incurs facility, equipment, transportation, and personnel costs associated with providing mail delivery to over 149 million addresses 6 days a week, regardless if 20 or 1 piece(s) of mail needs to be delivered to a particular address. Mail volumes have declined over the last 2 years and USPS is projecting even lower volumes in 2009 and 2010 (see fig. 2). Even so, USPS’s delivery network increases by more than 1 million addresses each year. This trend poses a challenge to reducing delivery costs because as the network expands,so do some of USPS’s overhead costs.
Employee Complement Statistics
In 2010, total complement decreased by 40,395 employees, with career complement decreasing by 39,220. At the end of the year there were 671,687 employees on the rolls, of whom 583,908 were career — the smallest career complement in 10 years. The Postal Service has eliminated over 200,000 positions through attrition or retirement in the last 10 years, half of those since 2007
Pursuant to §39 U.S.C. 3686(d), the Postal Service hereby reports that during calendar year 2009 the following persons received compensation in the amounts listed in excess of the rate for level 1 of the Executive Schedule under section 5312 of Title 5: