End of Summer News and UpdateEnd of Summer News and UpdateGreater New York Postal Customer Greater New York Postal Customer

Council – October 21, 2009Council – October 21, 2009

Eddie Mayhew’s Classification Station Eddie Mayhew’s Classification Station P. O. Box 289P. O. Box 289Lake Hiawatha NJ 07034-0289Lake Hiawatha NJ 07034-0289

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Deep In The Hole For 2010

• USPS ends the fiscal year at over $7 billion In debt

• Borrowing power depleted

• Congressional Relief 9-30-09

• Still 3.5 billion in the red

• Some borrowing power restored

New Mailing Services Prices – May 11, 2009

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Volume Continues Dropping

• 2007 equaled 208 billion pieces of mail

• 2009 is ending at 175 billion pieces

• 2010 projected at 165 billion pieces

• Already exceeded drop off predicted by Presidential study of 2003 by 6 billion pieces

Eddie Mayhew’s Classification Station Eddie Mayhew’s Classification Station P. O. Box 289P. O. Box 289Lake Hiawatha NJ 07034-0289Lake Hiawatha NJ 07034-0289

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• Good news? Maybe

• CPI index is standing at minus 0.3 percent

• No price increase in calendar 2010 for Market Dominant products

• January increase for Competitive products

• Gambling for loyalty and success

Pricing prospects

Eddie Mayhew’s Classification Station Eddie Mayhew’s Classification Station P. O. Box 289P. O. Box 289Lake Hiawatha NJ 07034-0289Lake Hiawatha NJ 07034-0289

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Postal Closings and Consolidations

• 3,000 post office review whittled down to 370 offices that may close.

• 59 Mail Processing Facilities in various stages of review and/or consolidation

• Almost all Air Mail Facilities merged into District Operations

Eddie Mayhew’s Classification Station Eddie Mayhew’s Classification Station P. O. Box 289P. O. Box 289Lake Hiawatha NJ 07034-0289Lake Hiawatha NJ 07034-0289

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• Voluntary Early Retirement and limited buyout being used.

• Employee complement reduced to 630,000 from more than 800,000

• Executive and management salaries frozen

• Union negotiations for concessions

Personnel Reductions

Eddie Mayhew’s Classification Station Eddie Mayhew’s Classification Station P. O. Box 289P. O. Box 289Lake Hiawatha NJ 07034-0289Lake Hiawatha NJ 07034-0289

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Five Day Delivery Moving Forward

• Saturday home and business delivery would be eliminated.

• Post offices will stay open for window and box services

• Post office box mail would get Saturday delivery

• Possible for Oct. 2010, likely for early 2011

Eddie Mayhew’s Classification Station Eddie Mayhew’s Classification Station P. O. Box 289P. O. Box 289Lake Hiawatha NJ 07034-0289Lake Hiawatha NJ 07034-0289

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• Expand Surface Network to three tiers of transportation, processing and delivery.

• Eliminate outdated and cumbersome BMC network

• Improved and more direct transportation

• Begin using tandem trailers

• Remove redundant and underused existing transportation

Network Distribution Centers

Eddie Mayhew’s Classification Station Eddie Mayhew’s Classification Station P. O. Box 289P. O. Box 289Lake Hiawatha NJ 07034-0289Lake Hiawatha NJ 07034-0289

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• Faster and more precise system for sorting flat-sized mail to carriers

• 100 machines purchased

• Implementation nationwide, expanded to 42 sites form 32.

• Dulles VA up and running, eleven in process.

Flats Sorting System (FSS) Implementation

Eddie Mayhew’s Classification Station Eddie Mayhew’s Classification Station P. O. Box 289P. O. Box 289Lake Hiawatha NJ 07034-0289Lake Hiawatha NJ 07034-0289

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• MTAC – Mailer’s Technical Advisory Committee

• Workgroups entertaining postal and industry suggestions for making mail growth easier

• Over 100 recommendations reviewed and evaluated

• Changes recommended in order of priority for value

Workgroups at MTAC For Growing Volume

Eddie Mayhew’s Classification Station Eddie Mayhew’s Classification Station P. O. Box 289P. O. Box 289Lake Hiawatha NJ 07034-0289Lake Hiawatha NJ 07034-0289

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Partnering With Other Agencies

• Fedex transporting and dropping large volumes of express and priority mail

• United Parcel Service providing air transportation to 99 paired cities to get around airline deficiencies

• Last mile delivery by USPS to make sure mail integrity protected.

• Working with instead of against each other

Eddie Mayhew’s Classification Station Eddie Mayhew’s Classification Station P. O. Box 289P. O. Box 289Lake Hiawatha NJ 07034-0289Lake Hiawatha NJ 07034-0289

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Flexible Work Force

Work with labor organizations to develop a flexible work force

Meet needs of mail arrival ebbs and peaks to minimize employee downtime

5-Day delivery eliminated many “floater” positions for the 6th day when the regular carrier is off

Consolidations provide more concentrated workforce where volume is heaviest with latest technology

Eddie Mayhew’s Classification Station Eddie Mayhew’s Classification Station P. O. Box 289P. O. Box 289Lake Hiawatha NJ 07034-0289Lake Hiawatha NJ 07034-0289

There is much work to be done yetThere is much work to be done yet

Eddie Mayhew’s Classification Station Eddie Mayhew’s Classification Station P. O. Box 289P. O. Box 289Lake Hiawatha NJ 07034-0289Lake Hiawatha NJ 07034-0289

The End – QuestionsThe End – Questions

Eddie Mayhew’s Classification Station Eddie Mayhew’s Classification Station P. O. Box 289P. O. Box 289Lake Hiawatha NJ 07034-0289Lake Hiawatha NJ 07034-0289