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Mailers Webinar Feb 2012

Mailers Webinar Feb 2012

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Published by bsheehan

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Published by: bsheehan on Feb 13, 2012
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02/13/2012

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 ® 
1
USPS Financial Future
Responsibly Realigning Our Network
February 2012
 
2
VolumeVolumePricePriceLabor CostsLabor CostsUniversal ServiceUniversal ServiceObligationObligation
Capped by inflation
Price elasticitiesare in fluxdue to growing alternativesPostal network driven by:
Delivery points
Retail locations
Sortation facilities
Six-day delivery
~80% of total costs
COLA increases
Benefits: pensions, retireehealth, health insurance
Limited flexibility
Retiree prefundingobligation, rising workers’compensation costs
These trends willThese trends willcontinue to putcontinue to putpressure onpressure onUSPSUSPSssability to provideability to provideaffordable universalaffordable universalserviceservice
DecliningDecliningsteadilysteadily
Transactional volumedeclining due to e-diversion
Advertising mail is subjectto more substitution options
Mail volume highly sensitiveto economic changes
Mail mix changes – lost profit contributions
Fixed CostFixed CostBaseBaseRising butRising butcappedcappedRising CostRising Costper hourper hour
Situation Assessment: Mail
 
3
Mail Volume Shifting to Less Profitable Mix
Volume in Billions of Pieces
9878533902550751001252006 2010 2016 202010383828102550751001252006 2010 2016 2020
First-Class MailStandard Mail

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