Introduction

In 1976 the Postal Service filed its first annual comprehensive statement to comply with an amendment to the 1970 Postal Reorganization Act. The amendment, now codified as Title 39, United States Code (USC), Section 2401 (e), required that a comprehensive statement accompany the annual Postal Service budget submission to Congress. The amendment further required the Postal Service to explain and address 1) the plans, policies, and procedures designed to comply with the statutory mission of the Postal Service; 2) general postal operations, including data on service standards, mail volume, productivity, trends in postal operations, and analyses of the impact of internal and external factors upon the Postal Service; 3) financial information relating to expenditures and obligations incurred; and 4) other matters necessary to ensure that Congress is "fully and currently consulted and informed on postal operations."

Unlike the annual report of the Postal Service, which has been published since 1789 and which focuses primarily on Postal Service finances, the comprehensive statement provides a summary of the initiatives, accomplishments, and challenges faced by the Postal Service in the previous year. The comprehensive statements published since 1976 provide succinct summaries that show how the Postal Service has changed over time, what policy decisions directed that change, and what influenced those policy decisions.

The format of comprehensive statements has remained consistent since the first publication in 1976. Chapter One deals with statutory requirements and details how the Postal Service met those requirements for the year addressed. Chapter Two reviews operational changes, including automation and technological improvements, and explains current products and services. Chapter Three provides an overview of Postal Service finances for the preceding year, and Chapter Four is devoted to performance for the preceding year and the performance plan for the following year.

The 2004 Comprehensive Statement on Postal Operations is available in hard copy and can be found on the Internet at http://www.usps.com/financials/cspo/welcome.htm.

For policymakers, stakeholders, and members of the general public interested in the Postal Service the 2004 Comprehensive Statement provides extensive and detailed information about what the Postal Service accomplished in 2004.

A. Fundamental Service to the People

1. General

The ongoing focus of the Postal Service on the overarching strategies identified in the April 2002 Transformation Plan contributed to its ability in 2004 to continue to serve a growing delivery network, while achieving record levels of service performance and customer satisfaction. At the same time aggressive cost management, complemented by the reduction in payments to the Civil Service Retirement System resulting from 2003 legislation, contributed to the 2004 net income of $3.1 billion.

Independently measured on-time, overnight, First-Class Mail delivery performance held steady at a record 95 percent and reached 96 percent during postal quarter lll. Service in other measured categories continued to meet or exceed record levels, even as the delivery network grew by approximately 1.8 million new addresses each year. Customer satisfaction, also independently measured, reached an all-time high of 94 percent.

The Postal Service reduced its debt from $7.3 billion at the close of 2003 to $1.8 billion at the close of this year. This represents a third straight year of debt reduction and continues to reflect the positive effects of Civil Service Retirement legislation in 2003.

Career employment was reduced through attrition by 21,000 positions, bringing career staffing down to 707,485, the lowest level since 1993. This contributed to an unprecedented fifth consecutive year of growth in total factor productivity. Significant progress was made in achieving the Transformation Plan goal of enhancing a performance-based culture with the implementation of a pay-for-performance system for all executives, managers, supervisors, and postmasters. Compensation for these groups is directly tied to the achievement of well-defined corporate and individual goals.