USPS' Potter Speaks to Congress

John E. Potter, the Postmaster General of the U. S. Postal Service addressed a Senate panel yesterday, and spoke of the impact the terrorist attacks had on postal operations, as well as postal finances and the agency in general.

Every year, the postmaster general of the USPS speaks to Senate Governmental Affairs International Security, Proliferation and Federal Services Subcommittee and delivers the annual report of the Postmaster General.

Potter said that the acts of terror in New York and Washington have led the people of America to question many of their assumptions about the simple and routine activities that are part of their everyday lives, and that as a result” the Postal Service was acutely aware of the need to continue daily mail delivery and, where it was interrupted, restore it as quickly as possible.”

Potter also said that the continued movement of mail was important to limiting the overall economic losses resulting from last week's attacks. “A single day's interruption n payments that move through the mail can mean over $1 billion in lost interest income,” he said.

Potter said that the New York Post Office provided trucks and drivers that shuttled medical supplies and other emergency equipment to where it was needed most.

However, Potter said that there are storm clouds in this picture.

“Recent economic reports have given us cause for concern about future mail volume projections,” said Potter. “This, coupled with a projected fiscal year 2001 deficit in the range of $1.65 billion, requires us to make even further adjustments in our resource usage.”

In practice, Potter said the USPS must extend its capital-spending freeze for the construction of new post offices means for another fiscal year. In addition, he mentioned the recent sweeping organizational changes to affect the USPS in nearly ten years. This restructuring is designed to bring improved focus to the organization, prioritize program expenditures, and drive performance.

“The organizational changes we are implementing are only one part of a series of continuing adjustments to our networks and processes that are designed to improve service and brings costs down,” Potter said.

For example, another element of the agency's effort is a study of mail processing operations in plants throughout the nation, he said.

“Our field managers are reporting back to us now about opportunities for the consolidation of some processing facilities and of some of the operations within our processing facilities,” Potter said. “These opportunities are the result of an overwhelming success with the automation of flat-sized mail — magazines, catalogs, and larger envelopes.”

Potter said that the agency expect to identify the planned consolidations by mid-October, with implementation scheduled for January 2002.

However, Potter said that despite the agency's wide-ranging and successful cost-management efforts, the USPS is operating from a very difficult position.

“Our challenges include economic slowdowns, new communication options, and the costs of maintaining a large and necessary infrastructure to support our universal service responsibility,” Potter said.

He also mentioned the rate increase, the agency's e-commerce initiatives and its pay-for-performance program. He also gave an update on the Transformation Plan designed serve as a long-term blueprint for the future of the USPS.

The USPS is working on the plan at the request of Congress and the Comptroller General of the United States.

Potter said that working with Comptroller General David Walker, the Postal Service's Governors and a senior management team, they have agreed on a three-phase approach that will emerge from this plan.

· Phase I will identify the Transformative actions the USPS can make under current law.

· Phase II will build on the work that has been led by Chairman Dan Burton of the House Committee on Government Reform, and Committee members John McHugh, Danny Davis and others to identify moderate legislative changes that would enable the Postal Service to realize continued productivity improvement and contribute to providing universal service at affordable rates.

· Phase III will identify the long-term and significant structural changes that might be considered, in working with Congress and the Executive branch, to strengthen the ability of the Postal Service to improve its services and manage its infrastructure efficiently in a time of rapid market change. The challenge that we will face together in coming years will be how to preserve universal service over time as costs increase for the extensive network of postal delivery and access.

Potter said that “development of this Transformation Plan is one of my highest priorities…we are continuing our work with postal stakeholders, including Congress, to complete this plan. Of course, we expect this to be a living document, as our discussion with Congress and other stakeholders continues.”

Potter said the USPS would be submitting an initial document by the end of this month, with a final plan in December.

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