USPS Annual Report 2010 Highlights
A few highlights of USPS 10-K Report 2010 released today:
EMPLOYEES
At September 30, 2010, we had 583,908 career employees and 87,779 non-career employees, substantially all of whom reside in the U.S.
The Postal Service incurred a net loss of $8,505 million for the year ended September 30, 2010. This followed net losses of $3,794 million in 2009 and $2,806 million in 2008. A significant portion of these losses are attributed to the unprecedented declines in mail volume in 2008, 2009, and 2010, combined with the cost of pre-funding retiree health benefits as mandated by P.L. 109-435.
Mail volume fell by 6.2 billion pieces in 2010, resulting in a $1,038 million, or 1.5%, decrease in revenue compared to 2009. In 2009, mail volume decreased 26.0 billion pieces, resulting in a $6,842 million, or 9.1%, decrease in revenue compared to 2008. The declines in mail volume that began in 2008 are primarily the result of the economic recession that began in December 2007, combined with the long-term trend of hard copy correspondence and transactions migrating to electronic media. This migration to electronic media accelerated during the recession and is expected to continue.
USAGE OF FACILITIES
Facilities that support postal retail and delivery operations are located in virtually every community throughout the country. In addition to the 32,528 retail and delivery facilities that we manage and operate, postal retail services are available in thousands of commercial locations owned and operated by private businesses. These include more than 3,000 Contract Postal Units and Community Post Offices and over 63,000 supermarkets, pharmacies, and other stores that sell postage stamps as a convenience to their customers.
WORK HOURS
Total work hours in 2010 of 1,183 million hours decreased by 75 million, or 6.0%, from 1,258 million work hours in 2009. Work hours in 2009 decreased an unprecedented 115 million hours from the 2008 total of 1,373 million hours, which was 50 million hours less than the 2007 total of 1,423 million hours. Contributing to these reductions were the previously noted incentives paid to 20,800 employees who elected to retire or resign during Quarter IV, 2009 and Quarter I, 2010. Another management initiative which contributed to the reduction was the adjustment of delivery routes that was initiated in response to the decline in mail volume.
Work hours decreased in all major functions in 2010 compared to 2009: city delivery declined by 16 million hours; rural delivery declined by 4 million hours; customer service declined by 18 million hours; and mail processing declined by 27 million hours. Total work hours decreased in 2010 despite the addition of approximately 740,000 delivery points. Rural delivery hours decreased in 2010 despite the addition of over 387,000 new rural delivery points. The decreases reflect delivery optimization initiatives and the reduction in mail volume from the previous year. Although the total number of new delivery points increased in 2010, the growth rate was significantly lower in 2010 as compared to 2009. This is a direct reflection of the weak economy, with lower housing starts and sales.
As shown in the following chart and consistent with last year, in 2010 the rate of reduction in work hours has exceeded the rate of decline in mail volume in every category except rural delivery and postmasters. Rural delivery is where most of the delivery point growth is while postmasters represent mostly fixed costs. We continually strive to optimize the use of personnel and minimize variable costs. The challenge that remains is to reduce the fixed costs. This will include structural changes, many of which require legislative or regulatory approval
Our 2009 work hours decreased by 115 million hours, partially offsetting higher labor rates. The unprecedented 115 million, or 8.4%, decrease in work hours resulted in large part from lower mail volume. Management initiatives and delivery route adjustments, initiated in response to the decline in workload, contributed to these reductions. Work hours decreased in all major functions.
EXECUTIVE COMPENSATION
Compensation for postal executive officers is significantly below that of the private sector. As explained later, an independent consulting firm retained by the Board found USPS executive base salaries continue to remain well below market when compared against published survey data of comparable jobs in the private sector. The most recent assessment using 2010 data indicates that USPS executive salaries have continued to erode further over the past twelve months.
For calendar year 2010, after reviewing recommendations from the Postmaster General and the Compensation Committee, the Board increased salary ranges by 1.5%, in line with the increase for the Federal Government’s executive schedule. The Board authorized salary increases within these ranges based on organizational and individual performance in addressing the Postal Service’s significant challenges/
Salary increases, if any, are determined after the end of the fiscal year and any new salaries become effective for the following calendar year. Although management achieved very significant accomplishments in addressing the many challenges the Postal Service faced in Fiscal Year 2010, the Governors determined that salaries should be frozen in calendar year 2011 in light of the Postal Service’s financial challenges. The Postmaster General, with the approval of the Governors, determined that performance incentives should be paid for Fiscal Year 2010 for the other named executive officers. These incentives were based on the named executive officers’ individual achievements and contributions to address the overall challenges the Postal Service faced in Fiscal Year 2010. The Governors noted that, despite the significant downturn in mail volumes over the past several years, management achieved very high total factor productivity, more than doubling the score achieved 10 years ago. Postal management achieved this very high total factor productivity score by reducing the workforce, overtime, and supplier expenses, as well as through a number of other process improvement efforts. Of equal importance, management maintained high levels of service and employee satisfaction, increased customer access to products and services and offered mailers pricing incentives to help stem the volume decline.
The Governors determined that the Postmaster General’s salary will increase, effective January 2011, to the maximum allowed by the statutory compensation cap. Even with this increase, the Postmaster General’s compensation will continue to be significantly below that of chief executive officers in the private sector who have comparable responsibility. The Governors also awarded incentive compensation to the Postmaster General based on his achievement of personal goals set by the Governors and in accordance with his contract.
OTHER COMPENSATION INCENTIVES
Executive officers are also eligible for performance awards for specific activities that reflect a high degree of leadership. Only a small number of these individual awards are given out each year. In addition, executive officers are eligible for retention and recruitment incentives designed to attract and retain highly talented and marketable individuals in key postal positions. The payment of some of these awards may be deferred, in whole or in part, due to the Postal Service’s compensation limits.
http://www.usps.com/financials/_pdf/annual_report_2010.pdf
10-K filing
http://www.usps.com/financials/_pdf/2010_10K_Report_Final.pdf
EEOC Annual Report On USPS Workforce Fiscal Year 2009
From EEOC: This report covers the period from October 1, 2008, through September 30, 2009 and contains selected measures of agencies’ progress toward model EEO programs.
Targeted Disabilities
As of September 30, 2009, USPS employed 5,372 (0.76%) Individuals with Targeted Disabilities (IWTD). In order to have met the federal 2% participation rate goal, 14,158 IWTD were needed. This represents a decrease of 482 employees from FY 2008 and a decrease of 794 employees since FY 2005. The participation rate for FY 2008 was 0.77% and for FY 2005 was 0.88%. Over the 5-year period USPS had a net decrease of 0.12% in employees with targeted disabilities.
EEO Complaint Processing
I. Counseling
USPS timely processed 99.5% of the 17,054 pre-complaint counselings (without remands) completed in FY 2009.
II. Bases of Complaints Filed
The bases of alleged discrimination most often raised were: (1) Reprisal; (2) Disability (Physical); and (3) Age. Of the 5,659 complaints filed at USPS, 1,283 contained allegations of race (Black/African American) discrimination, 570 contained allegations of race (White) discrimination, 128 contained allegations of race (Asian) discrimination, 17 contained allegations of race (American Indian/Alaska Native) discrimination, 757 contained allegations of color discrimination and 2,533 contained allegations of disability discrimination.
III. Complaint Processing Times
Of the 3,014 completed investigations, 99.2% were timely. USPS’ average time for completing an investigation was 113 days. Of the agencies completing 25 or more investigations, the Tennessee Valley Authority had the lowest average of 100 days.
USPS’ average processing time for all complaint closures increased from 238 days in FY 2008 to 243 days in FY 2009. The government-wide average was 344 days.
IV. Costs
USPS agreed to pay $840,044 for 4,584 pre-complaint settlements, of which 433 were monetary settlements averaging $1,940. USPS expended a total of $4,541,324 for 3,014 complaint investigations, for an average expenditure of $1,507.
USPS agreed to pay a total of $5,631,795 plus other benefits for 598 complaint closures through settlement agreements, final agency decisions, and final agency orders fully implementing AJ decisions. For complaint closures with monetary benefits, the average award was $9,418.
See Report on USPS Workforce Composition
USPS Executive Officer Compensation For Fiscal Year 2009
Filed under: postal, postal finances, usps, usps annual report, vice presidents
PMG Potter earned $734,650
“Salaries for executive level officers were frozen for calendar year 2009. The salary amounts vary from FY09 and FY08 because USPS salaries are based on the calendar year and not the fiscal year. Therefore, FY08 salary numbers include a portion of 2007 salary figures. In addition, the values in the above table for Mr. Walker are as of February 27, 2009, which was the end of his tenure as CFO. Joseph Corbett assumed the position of Chief Financial Officer as of January 31, 2009, and therefore did not earn FY08 salary. Robert Bernstock assumed the position of President, Shipping and Mailing Services, as of June 30, 2008.”
see chart: http://www.postalreporter.com/pces-salary.htm
Postal Service Ends 2009 with $3.8 Billion Loss
Filed under: postal finances, press releases, usps, usps annual report
2010 Financial Plan Predicts More Losses Next Year
WASHINGTON—The U.S. Postal Service (USPS) today filed its 2009 fiscal year-end financial results, showing a net loss of $3.8 billion for the year — despite cost-cutting efforts resulting in $6 billion in cost savings and a $4 billion reduction in required payments for retiree health benefits. Cost savings reflect a reduction of 40,000 career USPS employees as well as reductions in overtime hours, transportation and other costs. The $4 billion reduction in required retiree health benefit payments was passed into law for fiscal 2009 to allow USPS to maintain fiscal solvency while continuing to provide universal, affordable service to the nation.
Details of 2009 results include:
• Operating revenue of $68.1 billion, compared to $74.9 billion in 2008;
• Operating expenses of $71.8 billion, compared to $77.7 billion in 2008;
• Net loss of $ 3.8 billion, compared to $2.8 billion in 2008; and
• Total mail volume of 177.1 billion pieces, compared to 202.7 billion pieces in 2008, a decline of more than 25 billion pieces, or 12.7 percent.
“Our 2009 fiscal year proved to be one of the most challenging in the history of the Postal Service,” said Chief Financial Officer Joseph Corbett. “The deep economic recession, and to a lesser extent the ongoing migration of mail to electronic alternatives, significantly affected all mail products, creating a large imbalance between revenues and costs.”
Corbett said that USPS responded aggressively to unprecedented mail volume declines and the ongoing recession. “We undertook comprehensive cost-cutting measures across all areas of the organization,” he said. “Most notably, we reduced work hours by 115 million, or the equivalent of 65,000 full-time employees — a larger number than the entire workforce at more than 80 percent of Fortune 500 companies today.”
Several significant accruals in the year increased the 2009 net loss by $1.7 billion but did not affect current year cash flow:
• An increase in estimated Workers Compensation liability of $718 million, primarily to reflect lower interest rates;
• An increase in estimated deferred revenue recognition on prepaid postage of $756 million, primarily based on newly-available data on customer purchases and use of stamps; and
• Accrued retirement incentives of $197 million for 13,400 employees who applied for the incentive prior to Sept. 30, 2009.
In its report on the financial statements contained in the Postal Service’s 2009 report, independent auditor Ernst & Young issued an unqualified audit opinion, but emphasized that questions remain about the ability of the Postal Service to generate sufficient liquidity to make all of its payments, including the $5.5 billion retiree health benefits payment due on the last day of 2010. “There is significant uncertainty as to whether the United States Postal Service will have sufficient liquidity to make this payment on Sept. 30, 2010,” the opinion stated.
The Postal Service will file its 2010 Integrated Financial Plan later this week, outlining plans and goals for the coming year. While further revenue losses and mail volume declines are expected, Potter said USPS will continue to move aggressively to meet the challenges posed by the current economic downturn.
“We realize our customers are facing the same economic challenges,” said Potter. “That’s why we are not raising prices on First-Class Mail, Standard Mail and our other market-dominant products in 2010,” he said.
The 2010 plan, which estimates a revenue decline of $2.2 billion, a net loss of $7.8 billion, cost reductions of more than $3.5 billion and a reduction in mail volume of 11 billion pieces for the year, is based on the assumption that there will be no change in the number of delivery days per week, and no change in the current retiree health benefits payment schedule.
“We’re grateful to Congress and the Administration for the necessary 2009 adjustment to our retiree health payment,” said Postmaster General John Potter. “This was a welcome and much-needed change to assure that the Postal Service was able to meet all of its obligations at the end of the fiscal year and over the course of 2010.” Potter stated, however, that the Postal Service faces “a sobering reality” of the same problem in 2010 and every year in the near future. “As volume contracts and we struggle to match the costs of an expanding delivery network with revenues received, it’s clear that long-term success requires fundamental, legislative change,” he said.
Potter said that legislation must address “the impossible demands” of prefunding future retiree health benefits at current levels of more than $5 billion annually; the barriers to matching delivery frequency with declining mail volumes; and the ability to leverage the Postal Service’s logistics, distribution and retail networks to create new revenue streams.
“In 2010 we will engage our customer and business partner stakeholders, the Administration and Congress, and the American people in a dialogue to determine a more financially sustainable future,” said Potter. “The Postal Service remains a vital driver of the American economy and an integral part of every American community.”
Copies of the 2009 financial results are available on the Annual Reports page of the Postal Service website, usps.com, at:
http://www.usps.com/financials/ar/welcome.htm#10k
click here for 2009 USPS Form 10K (PDF)http://www.usps.com/financials/_pdf/FY_2009_10K_Report_Final.pdf
Source: USPS
Presidential Elections Have Postal Consequences
Filed under: election, NAPUS, postal, usps, usps annual report
From National Association of Postmasters of the US (NAPUS) e-newsletter
Among the new appointments that President-elect Obama will make is the Chairmanship of PRC. Although current Chairman Dan Blair’s term on the Commission extends to 2012, he serves as Chairman, at the pleasure of the President. (Dan is a Republican appointee.) Another decision President-elect Obama could make is the nomination of a new USPS Governor.
In the wake of Sen. Barack Obama’s convincing and historic victory, Postmasters should be attentive to changes that a new Administration can bring to postal governance. For example, it is important to recall that one of the catalysts in jump-starting Postal Reform was a concern within the Bush Administration that the Postal Service’s precarious financial situation could have a negative impact on the U.S. Treasury. Moreover, one of the major obstacles to permitting the Postal Service to benefit from the same Medicare Part D rebate, as enjoyed by other employers, was the Bush Administration’s objection.
Among the new appointments that President-elect Obama will make is the Chairmanship of the Postal Regulatory Commission. Although current Chairman Dan Blair’s term on the Commission extends to 2012, he serves as Chairman, at the pleasure of the President. (Dan is a Republican appointee.) Blair may continue to serve as Chairman until Obama designates a new Chairman. It is, therefore, likely that President-elect Obama would choose between Vice Chairman Nanci Langley and Commissioner Ruth Goldway to succeed Dan. Both Langley and Goldway were confirmed as Democratic members of the PRC. Another decision President-elect Obama could make is the nomination of a new USPS Governor. Prior to the September Congressional recess, President Bush nominated former Washoe County NV Assessor Robert McGowan to succeed Alan Kessler on the USPS Board of Governors. If the Senate does not confirm McGowan prior to January 20, Obama could nominate someone else; however, this scenario may be problematic, because Senate Majority Leader Harry Reid (D-NV) recommended McGowan to the White House.
Another impact that the new Administration’s policy could have on the USPS is through its broad legislative agenda. For example, a major health care initiative could impact the Federal Employees Health Benefits Program (FEHBP) and Medicare. Postal employees rely on FEHBP for their health care coverage, while most retirees depend on both. Moreover, since FEHBP coordinates its coverage with Medicare, a substantial change in Medicare can impact the FEHBP. As you may recall, in 1993, former President Clinton led an ill-fated crusade to reform the nation’s health care system. Its earliest incarnations would have eliminated the FEHBP or radically modified it. Only through a concerted effort by the Federal/postal community, were we able to educate the Administration and Congress about the importance of the FEHBP. During that same period the USPS was seeking a way to break away from the FEHBP and negotiate its own health plan with postal employees. NAPUS will be working to ensure that the Presidential transition team is attentive to Postmaster issues.
EEOC Annual Report on U.S. Postal Service Work Force
From EEOC:
This report covers the period from October 1, 2006, through September 30, 2007 and contains selected measures of agencies’ progress toward model EEO programs. The FY 2007 Annual Report on the Federal Work Force, addressed to the President and Congress, presents a summary of selected EEO program activities in the federal government, including a work force profile of 59 federal agencies.
Brief summary of report on U.S. Postal Service
USPS timely processed 98.9% of the 17,277 pre-complaint counselings (without remands) completed in FY 2007. The bases of alleged discrimination most often raised were: (1) Reprisal; (2) Disability (Physical); and (3) Age. Of the 6,090 complaints filed at USPS, 1,431 contained allegations of race (Black) discrimination, 679 contained allegations of race (White) discrimination, 109 contained allegations of race (Asian) discrimination, 31 contained allegations of race (American Indian/Alaska Native) discrimination, 839 contained allegations of color discrimination and 2,664 contained allegations of disability discrimination.
Costs: USPS agreed to pay $498,777 for 5,328 pre-complaint settlements, of which 429 were monetary settlements averaging $1,162. USPS expended a total of $7,175,480 for 4,669 complaint investigations, for an average expenditure of $1,536. USPS agreed to pay a total of $4,550,549 for 626 complaint closures through settlement agreements, final agency decisions, and final agency orders fully implementing AJ decisions. For complaint closures with benefits, the average award was $7,269.
Permanent Workforce: Out of 583,629 employees – 64.32% men and 35.68% women ( last year’s report 61.08% men and 38.92% women)
Major occupations
CITY CARRIER 222,072 – 72.92% men | 27.08% women
CLERK 204,075 – 43.89% men | 56.11% women
RURAL CARRIER 67,560 – 45.49% men | 54.51% women
GS-14 and GS-15* 8,826 – 68.48% men | 31.52% women
Senior Pay Level* 748 – 70.99% men | 29.01% women
See Full EEOC Annual Report on the Postal Service Work Force
Postal Service First-Quarter Results Reflect Drop in Mail Volume
USPS issued the following press release:
National On-Time Performance Hits Record Highs
The U.S. Postal Service announced that mail volume was down 3.0 percent, or 1.7 billion pieces, for the first quarter of fiscal 2008, according to preliminary financial results presented today to the Postal Service Board of Governors.
First-Class Mail volume decreased 3.9 percent and Standard Mail decreased 2.6 percent in the quarter ending Dec. 31, 2007.
Chief Financial Officer and Executive Vice President H. Glen Walker attributed the declining mail volume to “disturbing trends” in the overall U.S. economy.
“Unfortunately, two key sectors of the economy — finance and housing — suffered a downturn in the first quarter, and they’re both heavy users of the mail,” said Postmaster General John Potter.
Net income for the first quarter is estimated at $672 million on revenue of $20.4 billion.
“Although revenue is higher than in the same quarter last year, due to the price increase last May, it is $500 million less than expected,” Potter said. “We’re working to offset the disappointing revenue with cost reductions and new strategies for growth.”
Final first-quarter financial results will be released in February.
First Quarter Service Scores
National on-time performance scores for the delivery of First-Class Mail hit all-time first-quarter highs in two of the three categories the Postal Service tracks. National overnight service was 96 percent on-time – a first for three quarters in a row. Two-day service was 93 percent on-time. Three-day performance was 88 percent, a two-point improvement over the same period last year.
“These are excellent service scores for the first quarter,” said Potter, ”especially given winter weather conditions and our busiest mailing season.”
First-Class Mail performance is measured independently by IBM Global Business Services. The process measures First-Class Mail from the time it is deposited into a collection box until it is delivered to a home or business.
Other Board Action
The Board today approved three facility projects: expansion of the processing and distribution centers in West Sacramento, CA, and Providence, RI, and the purchase and renovation of an existing building and site to serve as the Perris, CA, Delivery Distribution Center.
Postal Service Updates Its Transformation Plan
“The Strategic Transformation Plan 2006-2010, the Postal Service roadmap for the future, has been updated to reflect changes from last year’s passage of the Postal Act of 2006. The law makes a number of changes to postal oversight and regulation, but does not alter the Postal Service’s mission – providing trusted, affordable and universal service.”
Postal Service Updates its Transformation Plan to Reflect New Law and New Technologies
http://www.usps.com/strategicplanning/2006-2010.htm
PostalReporter.com: A few highlights from the Transformation Plan:
The Postal Service will focus on four critical human resources strategies — engaging employees, developing and managing talent, establishing and maintaining market-based compensation, and managing complement to assure flexibility. Read more
EEOC Annual Report on U.S. Postal Service Work Force
EEOC releases annual report 2006
Below is a summary of report on the U.S. Postal Service:
Permanent Workforce: Out of 693,677 employees – 60.63% are men and 39.37% women
Major occupations
224,009 city carriers – 73.44% men | 26.56% women
213,262 clerks – 44.21% men | 55.79% women
66,582 rural carriers – 46.08% men | 53.92% women
768 Senior Pay Level – 71.35%men | 28.65% women
“This report covers the period from October 1, 2005, through September 30, 2006. The September 30 snapshot includes only employees in pay status thus, some permanent employees, like seasonal employees or those on active military tours of duty are not included..While the United States Postal Service constituted 28.5% of the work force, it accounted for 43.7% of all EEO counselings, 36.9% of all complaints filed, 41.2% of all completed investigations and 40.7% of all complaints closed in FY 2006.”
“In FY 2006, the U.S. Postal Service reported the highest alternative dispute resolution (ADR) participation rate in the pre-complaint process (73.5%), while the government-wide average was 44.6%. No other agency with 25 or more completed/ended counselings had a participation rate greater than fifty percent.”
“In FY 2006, the U. S. Postal Service reported the highest percentage (95.9%) of timely issued merit decisions without an Administrative Judge decision.”
The top 3 bases of alleged discrimination most often raised were: (1) Reprisal; (2) Disability (Physical); and (3) Age.
The 6,183 complaints filed at USPS contained 2,541 allegations of disability discrimination.1,445 allegations of race (Black) discrimination, 646 allegations of race (White) discrimination, 234 allegations of race (Asian) discrimination, 28 allegations of race (American Indian/Alaska Native) discrimination and 811 allegations of color discrimination.
Costs: USPS agreed to pay $369,402 for 5,162 pre-complaint settlements, of which 376 were monetary settlements averaging $982. USPS expended a total of $5,676,799 for 4,452 complaint investigations, for an average expenditure of $1,275. USPS agreed to pay a total of $5,575,275 for 845 complaint closures through settlement agreements, final agency decisions, and final agency orders fully implementing AJ decisions. For complaint closures with benefits, the average award was $6,597.
See Full EEOC Annual Report on the Postal Service Work Force