COO says USPS will preserve standards for most current overnight mail volume despite plant closings

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.

The result?

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.

  • fUD

    Overnight standards will remain available-for now. Next year, only if the customer is willing to pay a premium for the service. Still available though.

  • confused

    “The Postal Service remains committed to improving the service we provide”
    “preserve approximately 66 percent of current overnight delivery volumes”,
    remain committed but cutting service 34 percent. WOW

  • retired too

    I’m curious, is there any actual proof that the USPS has saved 2.1 billion dollars in the last two years. I don’t mean projected I mean actual. Are service cuts saving you money or actually costing you? You keep hearing that the postal service is losing 5 billion a year (see PAEA 2006) so shouldn’t all these cuts have trimmed that loss or is this all a paper shuffle to further an agenda.

  • JoeyJoJoJuniorShabadoo

    Keywords – “Business mail”, “Properly prepared”, “containerized”, accepted before critical entry time”.
    Translation. Mail must be presorted requiring only dock transfer. Mail must be received at the PO before noon. Must be business mail, which means the American public is out of luck because (as Postmaster General Donahoe once said, “The American public is not our customer”

  • McMurphy

    Shut your fat pie hole Megan.. No one believes your or upper managements long winded bologna!

  • Rufus T. Firefly

    I bet she is the one that charged $100,000 on her PO credit card

  • postalnews

    I’m not sure where she gets the number for the “cost base” that she says is down by $2.1 billion (I’m guessing its the total cost adjusted for rates and volume), but expenses (not counting the trust fund) are down by over $4 billion from two years ago- and revenue is up a couple hundred million over the same time period, so savings of $2 billion, adjusted for the decrease in volume and changes in rates, doesn’t sound unreasonable.

  • common sense

    Well, aren’t customers the ones who buy your product? And in the case of the USPS, doesn’t that mean that “our customers” are the big mailers? How many letters do YOU send each week? The vast majority of the mail is stuff sent by “Big Mail”. You and I may not like that, but it’s an undeniable fact. If you have numbers to contradict me, by all means post them- I won’t hold my breath waiting.

    And how exactly is the American public “out of luck”? We have the lowest postage prices in the world, don’t we? Are you so poor that 49 cents is out of reach for you to send your Mom a Christmas card? I have never run into a person who says “Golly, I’d love to send more letters, but I just can’t afford to!!!”

    I’m all in favor of strengthening the USPS and saving jobs, but spouting nonsense ain’t gonna help.

  • freecountry

    She’s a liar. Pure and simple

  • retired too

    Thank you for the reply.I believe that’s part of the problem. Too much guessing. A large part of the 4 billion expense reduction can be attributed to decreased average wages due to a large expansion of the temporary low wage limited benefit workers. Numerous stories of service issues are related to the degradation of the workforce. Increased revenue due to rate increases and parcel expansion is irrelevant to cost savings. The question remains to show a direct relationship of cuts to savings,

  • bigtime

    ok and now the truth that coo brennan is not saying, injuries are at a all time high, most carriers are starting at 8-830, which causes mail to get to business later. carriers are working in the most intense part of the sun, which as we all know , skin cancers and other problems are right around corner. moral is at a all time low, most everyone in our office is finishing at 6 ,630 and 700 pm daily . no family life at all which is translating into a very crappy work enviorment as well as family issues popping daily has our office like a volcano just waiting to erupt . mail/parcels are being scanned attempted and delayed for next day. customers are saying that web says its so and so , or was attempted yesterday and you have no clue what they are talking about. the cca s that they hired seem like they could give 2 beeps and the way they delivers shows that. now for the boat load of parcels thrown into the back of llv , this is a complete joke , as you open the door and they spill out into major roadway. we look like complete morons. this is like being on the titanic as management tells the band to keep playing.

  • Doug Gray

    BULL!!!! The only 1st class will be bulk mailers presorted mail. Look at the postal 39 CFR Part 121.

  • jonnyohio

    Their plan to preserve standards is to simply buy bigger whips so they can get the employees to work faster and harder.

  • jonnyohio

    Yeah, on paper. We used to put missequenced DPS in our 3M case, but after a sorting facility closed and everything got consolidated to a facility farther away, it got so bad they told us to stop putting it in there. Now it just gets sorted straight back to our routes. They probably just make the numbers up now so they can say “see, nothing has been affected.”