In a speech to mailers attending the National Postal Customer Council gathering in Salt Lake City, USPS Chief Operating Officer Megan Brennan said that the postal service would “preserve approximately 66 percent of current overnight delivery volumes”, and that “Overnight Service Standards will remain available to commercial mail properly prepared, containerized and entered by critical entry times.”
The USPS plans to begin the process of shutting down 82 processing facilities in January, with the closures to be finalized before next year’s fall mailing season.
Here is the transcript of Brennan’s remarks:
Comments by Chief Operating Officer and Executive Vice President Megan J. Brennan:
The Postal Service remains committed to improving the service we provide.
This extends to every aspect of delivery, to our retail operations, the data and business tools we provide, and the products and services we create.
It’s all about making our industry more competitive.
One of the most important areas of progress relates to creating a much more efficient and technology-enriched delivery network.
We’ve recently made enormous changes to our footprint of processing facilities, our delivery operations, our internal processes — and our use of data and technology.
In just the past two years, we’ve reduced our annual cost base by more than $2.1 billion dollars and we delivered predictable service.
We are providing our customers with greater visibility and far more business intelligence.
We’re evolving, but we still have a way to go.
Our vision is to establish the mail and package-processing network that will carry the Postal Service and this industry forward for the next 30 years.
Back in June, we announced a continuation of our network rationalization efforts.
This involves consolidating processing operations from 82 facilities throughout the country.
The consolidations will begin in January, with completion expected by the Fall of 2015.
Our future network will preserve approximately 66 percent of current overnight delivery volumes, and Overnight Service Standards will remain available to commercial mail properly prepared, containerized and entered by critical entry times.
When we’ve completed this phase of rationalizing our network, we’ll lower our annual cost base by $750 million dollars.
And we’ll also be able to provide you with higher levels of reliable and predictable service.
Ongoing efforts will continue with some technology investments in these remaining facilities.
To accommodate the continued growth in our package business, we intend to deploy best-in-class package sorting equipment.
What does this mean for you?
The first thing to know is that these changes will drive sizeable improvements in operating and transportation efficiencies — which minimize the pressure to raise prices.
The second thing to know is that we will continue to share information along the way to ensure that you have visibility into our planning.
We want you to identify and communicate issues that may have an impact on your business and its bottom line.
We understand the utmost importance of communicating the details of when mail processing will move from one facility to another.
And that’s why we will post “Mail Moves” on RIBBS.
We recognize that you need to synchronize your logistics with our logistics.
The last and most important thing to know about these changes is that we’ve done this before.
In 2012 and 2013, we worked closely with our business customers, we made a number of changes to our plans based on your feedback, and we maintained predictable levels of service.
That’s our goal for this phase of network rationalization: No disruption; no degradation; and no interruptions as we move forward.
We know that’s what you need, that’s what you expect — and that’s what we intend to deliver.
How will postal operations remain on track?
Comprehensive project plans have been developed to hold us accountable.
We’ll employ early warning systems to constantly monitor inventory levels, work in process metrics and service performance.
If needed — we will deploy Area and HQ teams to any site experiencing difficulties.
Many of you are already working through your local PCC and with your area and district executives.
We will provide updates through the Business Service Network, Industry Alerts, and PCC messages.
Also, we will continue to offer Industry webinars and presentations to keep you aware of our progress.
Please take a close look at our draft plans and give us your feedback.
We look forward to working with you to create a much more efficient mail and package processing network that our industry can leverage for years to come.
We have a positive belief in the future.
And thank you for your business and active engagement in this process.