a letter from the postmaster general/ceo and the chairman of the board of governors
To the President, members of
Congress, postal employees and the
It was a great year for the Postal Service.
We set records in service, productivity
and customer and employee satisfaction.
We accomplished transformation
breakthroughs by using technology to
improve efficiency, increase customer
convenience and enhance products and
We joined our customers and representatives
from the mailing industry in
supporting legislation that adjusts our
payments to the Civil Service Retirement
We worked with the President's
Commission on the United States Postal Service
to preserve the viability of the nation's
postal system well into the new century.
We managed for results. And we achieved them by staying focused on three key strategies: improving operational efficiency, adding value for our customers, and enhancing our performance-based culture.
We identified each of these strategies
in our Transformation Plan. The Plan is
our response to the challenges of an
intensely competitive delivery market, the
emergence of new communication technologies,
and a business model defined
by a statute written for a different time.
The Postal Service must continue to
change to meet the needs of a changing
nation. The Transformation Plan will
help us do that.
We appreciate the help of others, as
well. An analysis by the Office of
Personnel Management found that,
without a change in our payment schedule,
the Postal Service would overpay its
obligation to the Civil Service Retirement
System by $105 billion. Quick action by
Congress and the Administration
resulted in legislation to avoid this overpayment.
The savings available through the new
law helped us reduce outstanding debt
by more than one third, from $11.1
billion to $7.3 billion, and make it possible
for us to continue reducing debt in
2004 and hold postage rates steady
until at least 2006.
We closed the year with a net income
of $3.9 billion, reflecting both our
success in managing costs and improving
efficiency and the positive effects of
the Civil Service Retirement System
funding reform legislation.
We will continue to do everything
possible to protect the basic right of
affordable, universal mail service for
everyone in America. Yet we must face
the simple fact that our business model
established by the 1970 Postal
Reorganization Act is no longer valid.
We can no longer expect that the costs
of serving a continually expanding delivery
base will be offset by increasing
revenue from continued mail volume
To address these issues, the President
appointed a Commission to recommend
the legislative and administrative steps
necessary to ensure the viability of the
nation's postal system. The
Commission, acknowledging the important
role of our Transformation Plan in
helping us meet today's challenges, also
offered recommendations for change in
four key areas: the Postal Service business
model, private-sector partnerships,
technology and workforce.
The Commission brought informed
proposals to the critical consideration of
the future of our nation's mail service.
The Postal Service will remain engaged
in that discussion. But we will not let it
distract us from our mission of providing
affordable, universal mail service for all
customers and all communities. That is
our job. That is what we will continue to
John E. Potter
Postmaster General and CEO
S. David Fineman
Chairman, Board of Governors