New Reality: Network Optimization

In his last “State of the Business” video to employees, PMG Pat Donahoe said USPS was planning network consolidation to address the decline of First-Class Mail volume.

In his latest all-employee video, Donahoe reports there are bright spots in the Postal Service’s business outlook, including Standard Mail, the package business, and past cost reductions. But he says more needs to be done.

“Long term, our financial problems are not going to go away,” he says. “We’ve got to do more, and we have to do it faster.”

Donahoe says the network that was designed to handle the high volume of mail processed in past years is too big and costly to support today’s lower volume.

“For the first time in our history, we need to reduce network capacity,” he says.

That’s why USPS is studying whether to lower the number of plants from more than 500 to fewer than 200 beginning next March. Reduced network capacity — which will result in cost savings of $3 billion annually — also will lead to changes in some service standards, said Donahoe.

The PMG says if the mail is to have an important role in the nation’s future, “we must shore up our foundation now and make these difficult, but necessary changes.” He says employees can help this process by focusing on providing excellent customer service and “doing your job the best way possible.”

Click here to view the PMG’s video.