From acceptance to delivery, we’re focused on enhancing our operational performance and increasing customer value. We’re working smarter and more efficiently. At the same time, we’re preparing to meet future customer needs.
Total Factor Productivity (TFP) — Total Factor Productivity is an index that measures how efficiently the Postal Service uses resources (inputs) to handle all aspects of its workload. An increase in the TFP index indicates that the ratio of work being completed is increasing compared to the resources used and that the Postal Service is operating more efficiently. Workload consists of three primary components: delivery points, mail volume weighted by product type and miscellaneous output (e.g., passports). Resource usage is based on the constant dollar amounts (i.e., the costs adjusted for changes in prices) of the labor, capital and materials used by the Postal Service.
The chart starts with the cumulative TFP improvement from 1972 to 2007 and then reflects the cumulative score each year since then. FY2015 marks the sixth consecutive year of positive TFP growth.
Total Factor Productivity
(Cumulative improvements compared to 1972 baseline)
[D]
Note: Prior year results are updated based on most current data.
Delivery Optimization— With the exception of packages, mail volume continues to decline while the number of addresses we deliver to steadily increases. Because of this, there’s a need to continuously revamp the delivery infrastructure through route reviews and adjustments, focus on increasing centralized delivery and use technology to leverage comprehensive delivery applications. This includes the delivery management system and volume arrival profile. In FY2015, 75 Local Operations Centers (LOCs) were built in every area and district office to improve delivery and customer service by providing real-time insight into street delivery operations. These LOCs are being used to monitor and mitigate daily delivery unit conditions with possible customer service impacts.
In the past year, USPS completed the deployment of over 271,000 Mobile Delivery Devices (MDDs) to 24,666 delivery units in 19,472 postal facilities. The MDD with its innovative functionalities improves the Postal Service’s ability to provide customers with real-time scanning and predictive delivery. MDD deployment provides new functionalities to all of USPS delivery routes including 143,000-plus city routes and over 73,000 rural routes.
Mode Conversion — Delivery work hours have been controlled by reducing the number of single-point deliveries while increasing the number of deliveries per carrier stop. By converting deliveries to a more centralized mode, this allows the Postal Service to provide consistent and reliable service in an efficient manner. Mode conversions also enable the Postal Service to reduce transportation costs. As a result of our communication and outreach efforts with our customers, in FY2015 USPS achieved a total of 122,025 voluntary conversions — 86,268 residential and 35,757 business.
Route Evaluations and Adjustments — Field management continues to inspect, evaluate and adjust delivery routes as necessary to control costs while improving service. During FY2015, the total number of routes increased by 2,412, from 224,365 to 226,777, absorbing over 1,059,000 additional delivery points.
Number of Routes, by Type of Delivery (see Delivery Optimization)
(in actual units indicated, unaudited)
Route
|
FY2015
|
FY2014
|
FY2013
|
City
|
143,051
|
141,271
|
142,073
|
Rural
|
73,818
|
73,166
|
73,089
|
Highway contract route
|
9,908
|
9,928
|
9,990
|
Total
|
226,777
|
224,365
|
225,152
|
Postal Vehicle Inventory (see Investing in the Delivery Fleet)
(in actual units indicated, unaudited)
Vehicle type
|
FY2015
|
FY2014
|
FY2013
|
Delivery and collection (1⁄2–2½ tons)
|
193,489
|
189,750
|
190,104
|
Mail transport (tractors and trailers)
|
5,620
|
5,751
|
5,850
|
Mail transport (3–9 tons)
|
2,112
|
2,133
|
2,139
|
Administrative and other
|
6,414
|
6,249
|
6,449
|
Service (maintenance)
|
4,565
|
4,599
|
4,613
|
Inspection Service and law enforcement
|
2,733
|
2,782
|
2,529
|
Total
|
214,933
|
211,264
|
211,684
|
Real Estate Inventory (see Facilities Management)
(in actual units indicated, unaudited)
Real estate inventory
|
FY2015
|
FY2014
|
FY2013
|
Owned properties
|
8,524
|
8,583
|
8,598
|
Owned interior square feet
|
194,220,092
|
195,617,292
|
196,956,774
|
Leased properties
|
23,314
|
23,649
|
23,814
|
Leased interior square feet
|
78,144,453
|
77,838,427
|
79,045,620
|
GSA⁄other government properties
|
286
|
296
|
297
|
GSA⁄other government interior square feet
|
1,902,726
|
2,001,667
|
2,005,330
|
Real Estate Inventory Actions (see Facilities Management)
(in actual units indicated, unaudited)
Inventory actions
|
FY2015
|
FY2014
|
FY2013
|
Lease actions (alternate quarters, new leases and renewals)
|
6,206
|
5,282
|
3,487
|
Property disposals*
|
16
|
30
|
44
|
New construction (AQ, NCO, NCL and expansion)**
|
22
|
70
|
29
|
Repair and alteration projects (expense)
|
51,584
|
46,961
|
45,040
|
Repair and alteration expense totals
|
$ 215,000,000
|
$ 159,000,000
|
$ 156,000,000
|
Repair and alteration projects (capital)
|
6,981
|
6,431
|
4,178
|
Repair and alteration capital totals
|
$ 347,000,000
|
$ 226,000,000
|
$ 195,000,000
|
*Total partial and complete property sales (does not include non-property sales such as right-of-ways⁄easements, sale of rights, defaults, installment payments, etc.).
**Includes the build-out of pre-existing non-postal spaces (Alternate Quarters [AQ]), the expansion of postal-owned space (Expansion) and the new construction of leased (NCL) or owned (NCO) space.
|
Investing in the Delivery Fleet — The Postal Service invested $517.3 million in our delivery fleet. This includes 9,133 RAM ProMasters — used as extended capacity delivery vehicles — purchased for $256.8 million to replace our aging fleet of 1998 and 2003 minivans. In addition, 6,533 Morgan Olsen mixed delivery and collection vehicles, known as 2-tons, were purchased for $256.9 million to replace our aging fleet of 2001 and 2003 2-tons. (See Postal Vehicle Inventory table.)
Network and Transportation Optimization — In FY2015, the Postal Service began phase two of its network realignment efforts. During the year, an operating window change in processing operations was implemented, which allowed us to reduce the aging fleet of letter processing machines in our plants, improve utilization, reduce costs and increase equipment reliability. During FY2015, 15 of the full facility consolidations planned for this second phase were completed, with the remaining 65 deferred until FY2016. This action was necessary to provide time for the Postal Service to stabilize from many factors resulting from the complex processing changes that were implemented. We’re using the tools of Lean Six Sigma throughout the organization to stabilize the network, drive standardized best practices in all operations and achieve targeted levels of service performance.
Lean Mail Processing (LMP) — LMP is being implemented in mail processing facilities nationwide. LMP is focused on improving operational efficiency and reducing cycle times between plant processes with the use of Lean Six Sigma tools and methodology. This is helping the Postal Service reduce waste and create an organized workspace with standardized roles and responsibilities. LMP also will help us standardize mail flow to ensure first-in, first-out processing. Additional benefits include reducing mail transport equipment inventories to align with mail processing needs.
Lean Management System, which is part of the latest LMP rollout, will use key performance indicators to drive improvements in mail processing operations, which in turn will result in better service for our customers and better budget outcomes for USPS.
Air Cargo Optimization — During FY2015, there was a significant increase in our air network volume — USPS flew more than 2 billion pounds of mail on multiple air carriers. This includes cargo carriers (FedEx and UPS) as well as several of the major commercial air carriers (American, Delta, Sun Country and United). In FY2015, we increased our contract relationship with commercial air carriers by adding Alaska Air and Hawaiian Air.
Ground Transportation Optimization — Highway transportation expenses for FY2015 were $3.6 billion. This is an increase of 3 percent, or $107 million, over FY2014. The primary drivers behind the increase in highway transportation expense were the increased capacity needs from the Operational Window Change (OWC), as well as the expanded ground Peak Season network in FY2015. This increase in highway transportation costs has been offset by the lower fuel prices and our efficiency measures to remove redundant transportation from the network.
International Operations Optimization — The Postal Service continues to focus on improving customer service through increased visibility for international and military mail, using customs data to improve operational processes. In cooperation with the U.S. Defense and State departments, USPS has enabled enhanced customer visibility and tracking of APO, FPO and DPO mailpieces leaving select high-volume locations in Europe, the Middle East and Asia. USPS also has increased the number of scan events on outbound international civilian items by integrating air carrier data and additional foreign post scan events into its tracking platforms. USPS is piloting “Green Lane” initiatives to expedite the customs processing of inbound packages using electronic customs declaration data so it gets to the recipient sooner. The expansion of foreign post partners providing this data also is laying the framework for future strategic initiatives to expedite inbound international and military package sorting within domestic operations.
Team Cleaning at USPS — Cleaning might widely be considered simply a chore but at the Postal Service this activity is guided by new performance standards. In 2013, the USPS Maintenance Policies and Programs organization began researching and testing new custodial processes. Previous cleaning policies had not been updated for more than 46 years. Cleaning science and technology have evolved tremendously.
The American Postal Workers Union and the Postal Service agreed on new team cleaning standards and nationwide implementation was set in motion in June 2014.
Postal employees and the environment are beginning to reap the rewards of team cleaning concepts that emphasize cleaning for health instead of just cleaning for appearance. New processes use a standard set of chemicals distributed in ultra-small collapsible packets designed for easy recycling. There have been some growing pains as employees and management reprogram old muscle memories, but these changes are well worth the benefits especially since costs are lower and fewer chemicals are used.
Team cleaning has been implemented at more than 80 sites with FY2015 savings of $14.5 million.
