Chapter 5: Performance Trends and 2009 Goals

Since the implementation of the Government Performance and Results Act of 1993 (GPRA), the Postal Service has balanced three fundamental criteria to evaluate overall performance: service quality, financial viability, and the provision of a safe workplace where employees can contribute to the success of the organization. These reflect the needs of our different stakeholders, and are also used internally to align individual and unit performance accountability with corporate goals. There are no major changes to the corporate goals for fiscal year 2008 or 2009.

Improve Service

On-time delivery is the critical first step in meeting and satisfying postal customer needs. The Postal Service continued the trend of steadily improving performance, achieving its highest score ever for the delivery of single-piece First-Class Mail.

First-Class Mail On-Time Performance



2005 Actual


2007 Actual

2008 Plan

2008 Actual


























Source: External First-Class Measurement System, IBM Global Business Services

Note: The calculation of Plan and Actual data differ slightly. Plan is used internally by the Postal Service for its pay-for-performance system, known as the National Performance Assessment (NPA). The NPA Plan includes a small exclusionary period for 2-day and 3-day and also includes the on-time performance of International First-Class Mail. Actual scores do not include the exclusionary period and do not include International First-Class Mail.

Domestic First-Class Mail service performance is measured by the External First-Class Measurement system (EXFC), which has been in use since 1990. It measures the time from the collection box to the mailbox. The system is managed by an independent third party using test mailpieces sent to a nationwide panel of receivers. Through 2008, EXFC was not a system-wide measurement of all First-Class Mail. It continuously tested 463 ZIP Code areas selected for geographic and volume density. These areas represent 90 percent of originating First-Class Mail volume and 80 percent of destinating mail volume.

In fiscal year 2008, work was done to expand EXFC to encompass nearly all 3-digit ZIP Codes. This expansion, which takes effect in fiscal year 2009, makes EXFC results more comprehensive. To provide further detail in 2009, service standards to and from the territories of Guam, Puerto Rico, the Virgin Islands, and the states of Hawaii and Alaska were updated to reflect limitations on available transportation and the extended time and distances required to transport mail to and from these locations. Local service performance scores may be adjusted for extraordinary events, such as natural disasters. However, such adjustments are not made for national performance measurement.

The Postal Act of 2006 significantly expanded the requirements for service performance reporting. New standards have been developed for all market dominant classes of mail. The Postal Service will begin reporting on performance in 2009, and these results will establish the baseline for future performance improvement. We anticipate the corporate service-related goals to change in 2010 to reflect this additional information.

These new service reporting requirements created the demand for new ways to measure performance. Using the traditional EXFC sampling system alone would be extremely complex and costly. With the development and introduction of Intelligent Mail®, this expansion of performance measurement is becoming a reality. Intelligent Mail barcodes contain up to three times as much information as older barcodes. The additional information carried by each mailpiece, combined with expanded automated scanning capability, will allow for service measurement as mail is processed from origin to destination. This cost-effective and more robust approach will also help mailers and postal employees better identify and resolve root-cause problems in addressing, mail preparation, processing, transportation, and delivery. Related systems, which verify when the Postal Service actually receives the mail, will improve accountability for contractors who print, prepare, and transport mail to the Postal Service.

Timely and reliable delivery is the foundation for customer satisfaction and revenue generation. The Postal Service will continue the evolution of other outreach systems, such as the Customer Satisfaction Measurement survey, to improve the total customer experience.

Maintain Financial Viability

The Postal Service is a self-sufficient agency. The cost of postal operations, including the costs to extend service to an additional 1.2 million new deliveries in 2008, must be financed by the revenue generated from the sale of postal products and services. Achieving profitability — the difference between total revenues and total postal costs — is essential to the Postal Service’s continued ability to provide reliable, affordable, universal service.

Generate Revenue

The economic environment made 2008 one of the most difficult years ever faced by the Postal Service, and this challenge will increase in 2009. The devastation in the financial services industry — one of the Postal Service’s largest commercial customer segments — significantly reduced volume and revenue for all classes of mail. Financial pressure on households depressed retail sales, which in turn reduced direct mail from retailers. Mail volume decreased 9.5 billion pieces in 2008. Volume and revenue continue to be eroded by online options for billing, payments, business communication and personal correspondence, and advertising. The Postal Service is limited by law in its ability to seek alternative sources of revenue.