February 17, 2015. 2 USPS Leadership Forum for Stakeholders

USPS LEADERSHIP FORUM FOR STAKEHOLDERS

OPERATIONS UPDATEFEBRUARY 17, 2015

DAVID E. WILLIAMSCHIEF OPERATING OFFICER

February 17, 2015

AGENDA

SERVICE PERFORMANCE

2

USPS Leadership Forum for Stakeholders

FY 2015 OPERATIONAL TESTS STATUS

PEAK SEASON OVERVIEW

PHASE ll CONSOLIDATIONS AND OWC UPDATE

COLLABORATION AND OUTREACH

3

USPS Leadership Forum for Stakeholders

SERVICE PERFORMANCE DIAGNOSTICSFROM REACTIVE TO PROACTIVE

SERVICE MEASUREMENTMEETING SERVICE EXPECTATION

PREDICTABILITY

VISIBILITY

DRIVING EFFICIENCY THROUGH MEASUREMENT & DIAGNOSTICS

QTR 1, FY 2015 SERVICE PERFORMANCE

4

Quarter 1, FY 2015

FY 2015 FY 2014

100 -

90 -

80 -

70 -

60 -

50 -

October 1,2014 through December 31, 2014

FIRST-CLASS OVERNIGHT

96.05 95.89

Target 96.80

% O

n-T

ime

5

FY 2015 FY 2014

100 -

90 -

80 -

70 -

60 -

50 -

FIRST-CLASS 2 DAY

95.48

Target 96.50

Quarter 1, FY 2015

95.20

% O

n-T

ime

October 1,2014 through December 31, 2014

6

FY 2015 FY 2014

100 -

90 -

80 -

70 -

60 -

50 -

FIRST-CLASS 3-5 DAY

91.84

Target 95.25

Quarter 1, FY 2015

93.24

% O

n-T

ime

October 1,2014 through December 31, 2014

7

100 -

90 -

80 -

70 -

60 -

50 -

STANDARD SCF

91.42

Target 91.00

Quarter 1, FY 2015

90.07

% O

n-T

ime

79.66 74.60

FY 2015 FY 2014FY 2015 FY 2014

LETTERS FLATS

October 1,2014 through December 31, 2014

8

100 -

90 -

80 -

70 -

60 -

50 -

91.14

Quarter 1, FY 2015

90.85

% O

n-T

ime

84.76 84.42

FY 2015 FY 2014FY 2015 FY 2014

LETTERS FLATS

Target 91.00STANDARD NDC

October 1,2014 through December 31, 2014

9

FY 2015 FY 2014

100 -

90 -

80 -

70 -

60 -

50 -

PERIODICALS

83.89

Quarter 1, FY 2015

84.02% O

n-T

ime

Target 90.00

October 1,2014 through December 31, 2014

10

Continuous Improvement Focus

Stabilizing Operating Window Change

Lean Mail Processing Certification in all Plants

Reducing Processing Cycle Times

3-5 Day Improvement Focus Air and Surface Capacities

Continual Monitoring of Surface Routes to Ensure Service Compliance and Service Responsiveness

Deep Dive Reviews with Each Area

Service Performance

11

USPS Leadership Forum for Stakeholders

PEAK SEASONOVERVIEW

PEAK Season 2014

12

Supplemental Staffing

Mail Processing Equipment and Space

We positioned ourselves for success by making investments in:

Transportation

Scanning Technology

Vehicles

Expanded Sunday Processing

Retail Technology

Expanded Delivery Window

Very Successful 2014 Peak Season

13

Peak Season 2014

CANCELLATION VOLUME

TOTAL PACKAGES

RETAIL ACCESS

463M Pieces of Mail Delivered in December

Cancellations down 4.4% to SPLY

524M Packages Delivered in December

18% Increase over SPLY

20M Packages Delivered on 5 Sundays

PHASE II CONSOLIDATIONSAND

OPERATING WINDOW CHANGE

14

USPS Leadership Forum for Stakeholders

15

Phase II Network Rationalization

OPERATING WINDOW CHANGE ENABLES:

Consistency in consumer receiving experience

Repurposing of facility space

Response to shift in marketplace demands

Positioning us for future – package growth

Expanded Remittance Mail and Caller Service processing window

Capturing of greater efficiency

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Jan 5 Operational

Window Change

April 18 Q3 Employee

Move Date

January 10 Plant

Consolidations Begin & Q2 Employee Move

Date

July 25 Q4 Employee

Move Date

October 1 Finalize All 82 Consolidation

Activities

October 31 Q1 Employee Move Date

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

FY 2015 FY 2016

Timeline Network Rationalization Phase 2 – 2015

3 0 148 2 10 194 2 41 0 0 0

MAIL MOVES BY MONTH

6

16

82 Consolidations 406 Mail Moves

Enables mailers to plan consolidation implementation progress

File provides mail move consolidation site information, type and date

Mail Move Plan File

Mail Move Plan is updated and posted on RIBBShttps://ribbs.usps.gov

RIBBS

Mail Move Plan

AREA Key De-Activation Plant Mail Activation

PlantOriginating Destinating DPS

O-Letter O-Flat

O-Packag

eD-

Letter D-Flat D-Package

DPS-Letter DPS-Flat

SA SA Huntsville P&DFC C C C C C 7/25/15 N/A

Birmingham P&DC

WA WA Tucson P&DC C C 7/11/15 7/11/15 7/11/15 7/11/15 7/11/15 N/A Phoenix P&DC

PA WA Eureka CSMPC7/11/15 7/11/15 7/11/15 7/11/15 7/11/15 7/11/15 7/11/15 N/A

Medford CSMPC

PA PA Industry P&DCN/A N/A N/A 4/18/15 N/A N/A 4/18/15 N/A

Santa Ana P&DC (letters)

PA PA Industry P&DCN/A N/A 9/30/15 N/A 4/18/15 9/30/15 N/A N/A

Anaheim P&DC (flats)

17

Mail Move Plan File Includes:

Consolidation sites scheduled for 2015

Site address, locale key, and the name of the activation (gaining) facility 

Mail shape effected (e.g. letters, flats, parcels/bundles)

Process step/entry level ( e.g. originating, destinating, and DPS)

Mail Move Plan File

Updated Weekly

Note: A new "Read Me First" tab has been added to this spreadsheet

to explain key information displayed.

KeyN/A = Not Applicable

C or Completion

Date

= Previously Completed

AREA Key De-Activation Plant MailOriginating Destinating DPS

O-Letter O-Flat O-PackageD-Letter D-Flat D-

PackageDPS-

Letter DPS-Flat

SA SA Huntsville P&DF C C C C C C 7/25/15 N/AWA WA Tucson P&DC C C 7/11/15 7/11/15 7/11/15 7/11/15 7/11/15 N/APA WA Eureka CSMPC 7/11/15 7/11/15 7/11/15 7/11/15 7/11/15 7/11/15 7/11/15 N/APA PA Industry P&DC N/A N/A N/A 4/18/15 N/A N/A 4/18/15 N/APA PA Industry P&DC N/A N/A 9/30/15 N/A 4/18/15 9/30/15 N/A N/APA PA North Bay P&DC C C C 7/25/15 C C 7/25/15 N/APA PA Redding CSMPC 4/18/15 4/18/15 4/18/15 4/18/15 4/18/15 4/18/15 4/18/15 N/A

WA WAColorado Springs P&DC C C N/A C 7/11/15 7/11/15 7/11/15 N/A

NE NESouthern Connecticut P&DC 9/7/13 9/7/13 N/A 9/7/13 9/7/13 N/A 4/18/15 N/A

NE NESouthern Connecticut P&DC N/A N/A N/A N/A 4/18/15 5/1/13 N/A N/A

NE NE Stamford P&DC 6/17/13 6/17/13 N/A 9/7/13 1/10/15 9/7/13 4/18/15 1/10/15SA SA Gainesville P&DC C C C C 7/25/15 C N/A N/ASA SA Manasota P&DC C C C 9/30/15 9/30/15 C 9/30/15 N/ASA SA Manasota P&DC C C C 9/30/15 9/30/15 C 9/30/15 N/ASA SA Mid-Florida P&DC C C C C C C 7/25/15 N/ACM CM Athens GA P&DF C C C 4/18/15 4/18/15 4/18/15 4/18/15 N/ASA CM Augusta P&DF 7/25/15 7/25/15 7/25/15 7/25/15 7/25/15 7/25/15 7/25/15 N/ASA SA Augusta P&DF 9/30/15 9/30/15 9/30/15 9/30/15 9/30/15 9/30/15 9/30/15 N/AWA WA Pocatello ID CSMPC 4/18/15 4/18/15 4/18/15 4/18/15 4/18/15 4/18/15 4/18/15 N/AGL GL Fox Valley P&DC C C C 9/30/15 9/30/15 N/A 9/30/15 TBDGL GL Gary P&DC C C C 7/25/15 7/25/15 TBD 7/25/15 N/AGL GL Kokomo IN P&DF C C C 3/14/15 3/14/15 3/14/15 3/14/15 N/AGL GL Lafayette IN P&DF C C C 4/18/15 4/18/15 4/18/15 4/18/15 N/AGL GL Muncie P&DF C C C 7/18/15 7/18/15 7/18/15 7/18/15 N/AGL GL South Bend P&DC 2/14/15 2/14/15 2/14/15 6/13/15 6/13/15 6/13/15 6/13/15 N/AWA WA Salina KS P&DF C C C 4/18/15 4/18/15 4/18/15 4/18/15 N/AEA EA Campton CSMPC 6/1/15 6/1/15 6/1/15 7/1/15 7/1/15 7/1/15 7/1/15 N/A

AREA Key De-Activation PlantMail

Activation Plant

Originating Destinating DPS

O-Letter O-Flat O-Package D-Letter D-Flat D-Package DPS-Letter DPS-Flat

SA SA Huntsville P&DF C C C C C C 7/25/15 N/A Birmingham P&DC

WA WA Tucson P&DC C C 7/11/15 7/11/15 7/11/15 7/11/15 7/11/15 N/A Phoenix P&DC18

Frequently asked questions posted to RIBBShttps://ribbs.usps.gov/

RIBBS Important Updates & FAQ’s

19

Added Important Network

Rationalization Information

Available Tools

Panorama (BSN eService) System

Business Service Network’s (BSN) repository of mailer customer issues

Issues tracked as Service Requests (SR)

SRs handled as open tickets needing resolution in order to be closed

BSN eService Customer-facing access

point for Panorama (BSN eService) system

BSN customers can submit electronic inquiries and can learn status of inquiry from web account

Non-BSN customers may contact a local BSN representative by phone or email for support

EWS Reports Daily Monitoring of plant

inventory levels• First Class• Periodicals• Standard Mail Letters• Standard Mail Flats

Weekly Monitoring of:• Work in Process (WIP)

cycle time• Pieces processed after

clearance time• STD on-hand

20

Early Warning System (EWS)

USPS remains committed to continued information sharing

Mailers continue planning based on Mail Move plan schedule

Mail Move plan published weekly on the USPS Rapid Information

Bulletin Board (RIBBS) at: https://ribbs.usps.gov

Report issues/concerns through available tools

Industry Engagement is Imperative

Industry Engagement

21

22

2015 OPERATIONAL TESTS

USPS Leadership Forum for Stakeholders

USPS Innovation Opportunities

23

Physical NetworkFirst Mile Last Mile Digital

Leverage market-leading physical assets

Incorporate

evolving logistics solutions

Develop a

structure that fosters agility and innovation

Boost the demand for mail and packages

Expand and simplify induction points

Integrate emerging digital, big data, and consumer trends to grow

Expand delivery solutions

Capitalize on the expansion of E-commerce and technology

Optimize route flexibility and productivity

Leverage USPS’s brand, trust and reputation to drive profit

Leveraging our Infrastructure

Next Generation Mailbox Pilots

Suburban Box Pilot: Four pilot routes in CA, CO and ND First Box installed on 12-18-14 298 Customers have registered for the Next Gen

Mailbox – 201 boxes installed Next phase will target routes and addresses with the

most delivered scans that were not scanned delivered in/at box or a parcel locker

Customer feedback:

• “This is amazing. I don’t have to go to the PO anymore.”

• “I’ve been making more online purchases because the mailbox is so convenient.”

Urban Box Pilot: Four pilot sites (Boston, Brooklyn, Pittsburgh & Wash DC) Four boxes installed as of 2/11 28 customers have registered for the Next Gen Mailbox

Weather has delayed some installations

24

Customized Delivery

25

Leverage Last Mile

Testing Grocery Delivery

Current Market

• San Francisco, CA - 41 ZIPs

Expansion Markets (In-Progress)• San Diego, CA - 49 ZIPs• Los Angeles, CA - 20 ZIPs• Santa Ana, CA - 95 ZIPs

Future Expansion Markets • Bronx, NY • Manhattan, NY • Stamford, CT • Bridgeford, CT

Use last-mile advantage to win ship-from-store trend

• Seattle, WA • Tacoma, WA • Portland, OR

Extensive Delivery Network

26

7-Day Delivery Leveraging Sunday Delivery to Grow Overall

Package Business

7,508 ZIP Codes have Sunday Delivery

31,000 Additional ZIP Codes Mapped for Sunday Hubs

Onboarding New Customers

Same Day Delivery: Early Bird Onboarding New Customers

Metro Post

27

METRO POST Same Day – Afternoon/Evening Package

Delivery

Current Metro Post Locations:• New York• Phoenix

Expansion Opportunity:• 11 Additional Cities• 1,897 ZIPs

Possible Expansion to Begin Spring 2015

Atlanta Northern VA

Baltimore Philadelphia

Boston Phoenix

Dallas San Francisco

Indianapolis Seattle

Los Angeles Washington DC

New York

28

COLLABORATION & OUTREACH

USPS Leadership Forum for Stakeholders

Industry Collaboration

MTAC 159 Hub Workgroup

MTEOR User Group 7

FAST User Group 3

Presort Reference Data User Group 9

Mail Prep and Entry Steering Committee

CS Agreement Process Improvement Team

Joint Bundle Breakage Reduction Effort

MTAC 168 Multi-scheme FSS Pallets Workgroup

MTAC 169 Refining Package Machinability Standards

CURRENT COLLABORATIVE EFFORTS

29

30

USPS – INDUSTRY COLLABORATION

COMMITMENT TO COMMUNICATE

STRONGER TOGETHER

NPF 2015 --- Anaheim, CA May 17-20 http://npf.org/ Area Mailing Industry Focus Groups – Calendar by Area https://ribbs.usps.gov/index.cfm?page=periodicalsfocus

OPPORTUNITIES:

Council

Committed to Collaboration/Communication

Exchange Ideas & Resolve Issues

Drive Innovation and Adopt Technology

MTAC Association Meetings NPF Trade shows and other events

Success Requires Collective Effort

Thank YouQuestions?

Thank YouQuestions?

USPS Leadership Forum for Stakeholders

31