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'Billion-dollar bet' on Postal Service

Staff cuts, IT modernization planned to transform USPS

Mar. 25, 2014 - 05:00AM   |  
By ANDY MEDICI   |   Comments
USPS Hearing MWM 20130213
Postmaster General and CEO Patrick Donahoe plans to let the Postal Service's workforce shrink by 10,000 through attrition. (Mike Morones/Army Times)

The Postal Service wants to cut its workforce, expand into new markets and products, and modernize all of its systems as part of its bid to transform itself into a highly-responsive digital organization.

The Postal Service plans to shrink its workforce by 10,000 positions in fiscal 2015, according to Postmaster General Patrick Donahoe. The reductions will be entirely through attrition — there will be no buy-outs or reductions in force — Donahoe said at a media roundtable at the annual National Postal Forum.

“We have been good planners, and we use overtime and other things to work our way through that,” he said.

He said the Postal Service has been able to reduce its workforce by about 320,000 since fiscal 2000, avoiding reductions-in-force because its average employee age is 52, allowing retirement to take care of downsizing.

The ultimate goal is for the Postal Service to reduce its career workforce from about 485,000 to around 400,000, with about 65,000 full-time non-career workers. But the Postal Service can do that only with the added flexibility provided by legislation pending in Congress.

The bill would also allow USPS to waive the required pre-funding of its retiree health benefits — about $5.5 billion a year — and would give it greater flexibility to reduce the size of its workforce and end Saturday delivery.

The bill does not allow the Postal Service to break off from the Federal Employee Health Benefits Program as the Postal Service had suggested previously, but it would let the organization share more costs with Medicare, saving hundreds of millions of dollars.

Donahoe said he hopes the Postal Service can become debt free as early as fiscal 2020 and could more heavily invest in IT improvements, capital projects such as its 22-year-old delivery fleet and in expanding into new markets and products.

Even as the Postal Service pushes to end Saturday letter delivery, it is expanding its efforts to deliver packages seven days a week and has seen great success so far.

The Postal Service is even trying out same-day delivery in New York City, he said. “It has caught on like wildfire in New York.We have a whole group of customers there,” he said.

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New York City, some areas of Texas, Los Angeles and certain parts of the mid-Atlantic are already getting the seven-day package delivery, according to Postal Service chief information officer Jim Cochrane. The program is expanding and will eventually cover about 80 percent of the population of the United States, if all goes as planned.

“We are making good progress on that,” he said.

The Postal Service will also begin rolling out new mobile devices — up to 300,000 by the end of the year — that will allow postal carriers to check in for work, check their vehicle, scan packages and determine routes, take pictures and geo-tag package locations to allow for more precise prediction of deliveries.

Donahoe also sees the Postal Service using its vast digital network to branch out into credentialing services. he new hand-held devices will allow postal workers to take photos of people and their photo identification and geo-tag the photo, verifying that the person’s identity has been verified.

“There is a lot of change that is going to happen in the medical records business and health care that will depend on ease of access, and there is nobody else to provide a lot of that today,” Donohoe said.

The Postal Service will also be rolling out a smaller-scale credentialing system for banking and government services at a lower level of security soon, Donahoe said.

The new technology is made possible by a large-scale upgrade of postal IT networks and systems, part of a “billion dollar bet,” in Cochrane’s words. (See related story, page 8).

The Postal Service will be installing scanner technology in all of its post offices as well as give customers greater visibility into where packages are. Eventually call center employees will be able to send text messages to letter carriers while en route if there are problems or changes reported by customers, Cochrane said.

“There is a lot of investment going on, and we think we are really investing for the future,” he said.

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