Our Vision and Ten-Year Plan to Achieve Financial Sustainability and Service Excellence.
Delivering for America: Our Vision and Ten-Year Plan to Achieve Financial Sustainability and Service Excellence describes a comprehensive modernization of the Postal Service.
Our Delivering for America (DFA) plan was published on March 23, 2021, to transform the United States Postal Service from an organization in financial and operational crisis to one that is self-sustaining and high performing.
In the year since, the Postal Service has aggressively advanced core DFA strategies and initiatives. While much work remains to be done in order to address the Postal Service’s financial and operational performance, the 10-year DFA transformation plan has already demonstrated that the path forward is achievable and that the organization can be financially self-sustaining, high performing, and provide excellent service to the nation. This report describes progress toward goals of the plan and reviews activities undertaken to date.
Our plan enables the Postal Service to achieve a positive net income within three years, and to achieve a break-even operating performance over the next 10 years.
Through a combination of cost and revenue improvement strategies and regulatory and legislative actions, we can avoid $160 billion in projected losses by 2030.
“By implementing the full breadth of this plan, within three years we can begin to operate on a financially self-sustaining basis and improve service performance dramatically by delivering 95 percent of all mail and packages on time, pursuant to achievable delivery standards.”
Our plan preserves our ability to fulfill our universal service mission. This includes visiting every residence and business, with six days of mail delivery and seven days of package delivery, and doing so affordably, reliably and securely.
By using best-in-class logistics practices, we intend to drive efficiency and service performance improvement to fuel revenue growth and customer retention. Most importantly, our plan establishes a new operating model that dramatically improves on-time delivery performance.
We will invest $40 billion in our people and infrastructure over the next 10 years. Our plan includes investments across our delivery, processing and retail operations with new information technology systems, parcel sorting equipment, mobile devices for carriers, as well as a faster pace of innovation in our product and service offerings.
We will support our employees by modernizing our vehicle fleet, and invest in tools, training and systems to improve safety, environmental stewardship and workplace experience. These investments will enable us to modernize the Postal Service and meet the changing needs of our customers.
The strategies and initiatives outlined in this plan represent our commitment to achieve service excellence, realize cost saving and revenue growth, modernize postal infrastructure and enhance our employees' wellbeing.
Reform Act | USPS Connect | Postal rates | Package service | Mail service | Operations | Conferences
Successful implementation of DFA requires partnership from legislative and regulatory stakeholders as its composition includes: self-help initiatives to provide billions in new revenue and cost reductions, while improving the predictability and reliability of service; judicious implementation of new and existing pricing authorities; and legislative changes to retiree health benefit funding rules, including requiring Medicare integration, and eliminating the pre-funding requirement. This legislation — The Postal Service Reform Act — was passed with strong bipartisan support by both the House and Senate and enacted in April 2022, and generates a total plan benefit of $44.5 billion expense reduction.
USPS Connect is the Postal Service’s new approach to meet shippers’ evolving package delivery needs. Four affordable delivery solutions help businesses of all sizes meet growing consumer demand for fast delivery and convenient returns. It capitalizes on investments and improvements under the Delivering for America 10-year plan to power affordable next-day delivery for businesses of all sizes.
USPS Connect was leveraged to support the Biden Administration’s public health initiative to provide free COVID-19 test kits to the public. More than 320 million test kits were rapidly delivered through the USPS Connect destinating entry model.
Since March 2021, we have taken a more rational pricing approach including the judicious implementation of new and existing pricing authority established by the Postal Regulatory Commission (PRC) in 2020. We implemented a Market Dominant product price increase on August 29, 2021. Under this rate change, USPS prices remain among the most affordable in the world. We additionally provided notice that we will review Market Dominant prices twice per year but chose to forego a January 2022 price increase. In April, we announced new postal rates to go into effect in July 2022.
Beginning May 1, 2022, USPS will implement new service standards for First-Class packages.
The new FCPS service standards will enable additional package volume to be transported by surface transportation, which is more reliable and affordable compared to air transportation.
Modifying select service standards is a key growth element and enabler of our 10-year plan. This action will contribute to our cost savings efforts and improve our reliability across all product classes, including our growing package market. By implementing the elements of our 10-year plan, we will deliver the consistent, reliable service that the American people and our customers expect and deserve and grow package volume, spurring revenue growth that can be invested back into the Postal Service.
A majority of FCPS items will keep current service standards, with 64 percent of FCPS volume having a delivery standard of 2-3 days.
Packages traveling the greatest distances will be most affected, with a day or two of transit time added for some FCPS items. Four percent will be upgraded from a 3-day to 2-day service standard. For the remainder of the volume (32 percent), the service standard will increase by one or two days.
On October 1, 2021 the Postal Service implemented new service standards for First-Class Mail and Periodicals. These new service standards will increase delivery reliability, consistency and efficiency for our customers and across our network.
Most First-Class Mail and Periodicals will be unaffected by the new service standard changes. Standards for single-piece First-Class Mail traveling within a local area will continue to be two days.
Mail traveling the greatest distances will be most affected, with a day or two of transit time added for some First-Class Mail and Periodicals.
We’ll make better use of our trucks and existing surface network to move the mail, relying less on costly air transportation.
By improving service reliability and increasing efficiency, we can keep costs at reasonable levels and help keep postage rates affordable for our customers.
As part of its 10-year plan to achieve financial sustainability and service excellence, the Postal Service is implementing key infrastructure initiatives and investments to meet the evolving mailing and shipping needs of American public and business customers.
Moving, removing, and repurposing mail processing equipment and operations or “operational mail moves” is an ongoing Postal Service strategy dating back decades that allows for more efficient, timely delivery of mail and packages. Due to the decline in mail volume, USPS will relocate or remove unnecessary letter and flat sorting equipment as appropriate to make space for much needed package processing.
Consistent with optimization and efficiency efforts paused in 2015, USPS completed the movement of mail processing operations at 15 facilities in April 2022.
Delivering for America establishes clear strategies to quickly achieve financial sustainability and service excellence. The Plan’s strategic initiatives are designed to reverse a projected $160 billion in losses over the next ten years by achieving break-even operating performance, while improving the reliability and predictability of service.
Our Plan delivers:
In developing our Plan, we studied market research; prior internal plans and proposals; reports from the Office of the Inspector General, the Government Accountability Office and the Postal Regulatory Commission; and many white papers and documents authored by postal stakeholders. We received feedback from key customers and industry associations, our unions and management associations, and members of Congress - valuable input from a diverse set of stakeholders.
We look forward to productive discussions with our stakeholders about our goals for the future of the organization and the most effective strategies to pursue them. We will listen and learn and adapt the plan to take account of stakeholder advice and guidance, carefully considering advice from the Postal Regulatory Commission, findings from the Office of the Inspector General, and feedback from our customers. We will adhere to legal, statutory, contractual, and regulatory requirements as we implement the initiatives within this Plan.
Yes. The Plan strengthens our ability to fulfill our mission to provide universal service, while maintaining six-day mail delivery and expanding seven-day package delivery reach for our customers and the American public.
After 16 years of pricing policies misaligned with organizational needs, the Postal Regulatory Commission provided a new pricing framework for market dominant products in 2020. Since March 2021, we have taken a more rational pricing approach including the judicious implementation of new and existing pricing authority. We implemented a Market Dominant product price increase on August 29, 2021. Under this rate change, USPS prices remain among the most affordable in the world. We additionally provided notice that we will review Market Dominant prices twice per year but chose to forego a January 2022 price increase. We have also utilized competitive market pricing to bring rates in line with the marketplace and provide the Postal Service with much needed revenue. Use of new pricing authorities and approach has already generated an annualized revenue increase of $1.9 billion.
The Postal Service implemented service standard changes for First-Class Mail and Periodicals on October 1, 2021. These changes were designed to enhance service reliability and also enable redesign of our processing and transportation networks to improve efficiency.
For many years, the Postal Service has recorded annual financial losses. Absent change, we are projected to lose another $160 billion over the next ten years.
This Plan’s strategic initiatives are designed to reverse this course and achieve break-even operating performance over the ten-year period (and achieve positive net income by FY2023 or FY2024) through modest regulatory and legislative changes, effective use of newly acquired and existing pricing authorities, operating more efficiently across our enterprise, and by driving revenue growth through innovative customer solutions.
With full implementation of our Plan, we can achieve a long-term sustainable business model and provide our customers with the reliable service they expect and deserve and avoid any need for a costly bailout.
Our Plan will deliver the reliable service the American people expect and deserve. We plan to invest approximately $4 billion in our Post Offices to provide a world-class customer experience with improved retail training, modernized uniforms, refreshed lobbies, and expanded self-service and digital options. Additionally, residential customers can expect:
While we remain committed to operating Post Offices in America’s communities across the country, we will align our retail footprint, hours, and services to meet current and evolving customer demands. In metropolitan areas that have multiple Postal Service retail facilities, we will evaluate our network of stations and branches and propose to consolidate certain low-traffic facilities where alternate facilities are available to serve customers.
Overall, we project that only a small percentage of our Post Offices will have hours modified, and only a small percentage of city stations and branches will qualify for consolidation.
The Postal Service will request advisory opinions from the Postal Regulatory Commission concerning our retail network realignments. We will share additional details as the Postal Service moves forward with these initiatives.
We recognize our business customers rely on us for predictable, reliable, value-driven service for both mail and packages. This is why the Postal Service is committed to dramatically improving service performance and customer experience at every touch point with our brand and delivering ever greater value to our customers through continual innovation and evolution.
Our Plan will fully utilize our unmatched logistics network and infrastructure—which delivers goods and services to more than 160 million addresses across the country—to connect businesses, large and small, to urban and rural communities across the nation.
Our business customers can expect:
Our people are our greatest asset, and our success depends on investing in their future.
We want to be an “employer of choice” that hires, develops, and retains the most capable and diverse employees. Our Plan focuses heavily on improving our collaboration and engagement within the workplace and strengthening the employee experience through the following measures:
In all of these efforts, we will continue to work closely with our unions and management associations. We will follow long-established, responsible processes for managing through transitions, providing options for our people to take on new or changing responsibilities, and to pursue career opportunities within the Postal Service.
