Copyright 1999 Federal News Service, Inc.
Federal News Service
SEPTEMBER 16, 1999, THURSDAY
SECTION: IN THE NEWS
LENGTH:
1733 words
HEADLINE: STATEMENT OF
WILLIAM J.
HENDERSON
POSTMASTER GENERAL AND CHIEF EXECUTIVE OFFICER
UNITED STATES
POSTAL SERVICE
BEFORE THE SENATE GOVERMENTAL AFFAIRS
COMMITTEE
SUBCOMMITTEE ON INTERNATIONAL SECURITY, PROLIFERATION,
AND
FEDERAL SERVICES
BODY:
Mr. Chairman and
members of the Subcommittee, I welcome the opportunity to discuss the U.S.
Postal Service with you today. I appreciate the time and energy you invest in
oversight and helping us fulfill our mission to bind our nation together by
delivering to everyone, everywhere, every day.
Today, I want to talk with
you about the performance of the Postal Service as we near the end of this
century and our plans as we look forward to the next.
In 1999, the Postal
Service has put the finishing touches on what has been a decade of progress.
When the decade opened, the Postal Service had just begun independently
measuring First-Class Mail service performance in metropolitan areas. By 1992,
when the first overnight results were announced, only two out of 86 locations
broke 90 percent and the national score was just a notch above 84 percent.
Today, even though we have expanded our measurements to represent more than
80 percent of our First-Class delivery volumes, every single location in the
contiguous United States is at 91 percent or better for local mail service. The
national average stands at 94 percent, tying our record high. Service for
First-Class Mail with two-and-three day commitments is also our best ever.
When the decade began, we used to enter each holiday mailing season, our
busiest time of the year, with only the most basic of preparations.
Today,
we start the season with integrated, focused fall and holiday plans that we
begin developing shortly after the last season has ended.
We now gather
information on customer mailings well in advance, so that we have proper
staffing and equipment on hand at our processing facilities. We have a national
operations center to keep track of weather conditions, respond to customer
concerns, and prevent bottlenecks in our system. We open additional
transportation hubs and use dedicated air transportation to speed delivery of
holiday gifts.
This season, new automated technologies will help us process
record holiday volumes more efficiently than ever by reading and barcoding more
than half of America's handwritten greeting cards.
At the start of the
1990s, the Postal Service had also requested a five-cent increase in stamp
prices, and customers were voicing concerns about price hikes that were
consistently above the rate of inflation in the economy.
This January, we
implemented our second straight increase below inflation. The rate change was
our lowest ever, just a penny more for a First-Class stamp and 2.9 percent
overall.
When the decade began, the Postal Service was routinely bleeding
red ink and had rarely posted surpluses in consecutive years.
In 1999, even
though we imposed a daunting management challenge upon ourselves by delaying our
smallest ever rate increase by seven months, we will end this fiscal year with
our fifth straight positive net income, which has helped us significantly reduce
prior negative equity. And we mastered the challenge of reducing costs by about
$700 million without eroding service performance. We are confident that we will
continue that success in FY 2000, even though we will not raise rates as we had
originally planned. By delaying the implementation of the rates and deferring
our rate filing by a year, we in essence gave the American mailers a dividend of
more than $2 billion.
When the 1990s got underway, the automated processing
of letter mail was in its infancy and just a fraction of letter mail was
barcoded.
Today, after $5 billion worth of investments, more than 88 percent
of all letter mail currently carries a barcode, and 85 percent of our city
carriers' mail is sorted in delivery order each day. Robotics, sophisticated
handling and transport systems, and even automation for flats are being
introduced into postal plants. Within the next several years, fully automated
processing facilities and a computer-driven information platform will
revolutionize the way we manage the mail and create aninformation-rich mail
stream that will give postal managers and customers alike realtime performance
information.
When the decade began, the Postal Service lacked a coordinated
method of managing its entire operations. Today, we rely upon a Baldrige- based
performance system to drive consistent improvement by focusing the energies and
resources of this vast ation on common goals and targets.
The Postal Service
is heading into the next century with the best performance, planning,
technology, and management syin our history. As always, we owe that success to
the extraordinary effort of our managers, postmasters, supervisors, and craft
employees.
At the same time, though, we enter the new millennium knowing
full well that the most significant challenges in our history await us.
Tomorrow's marketplace will offer Americans more powerful and plentiful
communications choices than ever before.
Private delivery carriers, already
industry heavyweights, will continue their aggressive efforts to dominate their
respective markets.
Newly privatized and deregulated foreign posts, hungry
for revenues, will not only offer an increasing range of international services
to American customers, but are also likely to begin creating delivery networks
right here on U.S. soil.
The revolution in electronic communications may not
be proceeding as fast as some have predicted, but no one questions its momentum.
Today, nearly half of America's homes own a computer. More than a third have
access to the Internet.
Already, powerful forces in the banking,
telecommunications, and the computer industries are scrambling to create
networks for e-payments. As the speed, security, and convenience of these
networks increases - and more and more consumers grow comfortable with logging
on to pay their bills - these efforts will reach critical mass. The eventual
result could be the erosion of our total revenues. We believe nearly $17 billion
is at risk. The Postal Service cannot predict precisely when or to what extent
these and other competitive pressures will take their toll on our bottom line in
the coming century.
But our extensive market research suggests that
First-Class Mailvolumes may actually decline over the next five years, although
we will continue to work on increasing the value of that mail by keeping costs
low and quality high.
But losing First-Class Mail is a real possibility -
this factor, along with the rising costs associated with maintaining a national
infrastructure of 38,000 facilities and a delivery network that grows by a
million stops a year- means we can't sit still. We have to tap into new revenue
streams as old ones begin to taper off if we expect to maintain affordable
prices and continue our investments in better service.
That is why we have
been so vocal over the past few years in calling for postal
reform, and why we have worked closely with John McHugh in the House to
develop a fair, meaningful reform bill. The legislation includes some tradeoffs,
but on balance, we believe it provides pricing and product flexibilities we need
to stay relevant and attractive to our customers.
That is also why - in
addition to our many efforts to improve the value of the mail for our customers
- we are already exploring ideas and developing innovative strategies for the
future.
We believe, in fact, that we have a responsibility to the American
people to ensure a healthy and meaningful postal system in the next century.
What's at stake is not just the continuation of perhaps the most visible and
personal of all federal services, but the endurance of a delivery system that
touches every American, helps bridge our vast distances and differences, and
binds our nation together.
The mail is an experience that we all share, and
it is a powerful one. Most of us look forward to getting our mail each day.
There are magazines and catalogs to browse. There are birthday presents and post
cards from friends on vacation. There are bills, coupons, and offers galore.
Going to the mailbox is such a pervasive habit that one of the leading
Internet companies has helped build their business on the slogan, "You've got
mail."
Mail is a unique moment in our day, a moment on the doorstep, one
that is happening in every home, in every community, every day. In many ways,
the mail has become the gateway to the household, a channel for commerce and
communication that connects families and friends,governments and citizens,
businesses and customers, publishers and readers, charities and sponsors.
Maintaining that connection in the next century, we believe, may well hinge
on our ability to blend the trust, security, and ubiquity of hardcopy mail with
the speed and capabilities of the electronic world.
Our strategies are just
beginning to take shape, and our role vis-a- vis the private sector will have to
be defined in concert with all of you and our many stakeholders and customers.
Already, though, we see several areas of opportunity.
We will build on our
strong Internet presence. Our public homepage is the most heavily trafficked
government site, receiving about three million "hits" each month. Customers use
this site to find ZIP Codes, calculate rates, buy stamps, track packages, and
get other key postal information. We intend to use the speed and access of the
Internet to offer customers information about their mail and access to our
products and services.
As on-line purchases continue to explode, both
businesses and consumers want prompt, reliable delivery, and easy access to a
carrier who can handle returns. We want to be the carrier of choice for
merchandise purchased on the Internet and the inevitable returns that result. We
already have a universal business and residential presence. We are low-priced
and we don't impose surcharges. Our carriers visit every address, everywhere,
six days a week.
So, despite many challenges, the Postal Service sees the
twenty-first century as a great opportunity to build on our legacy of service to
our nation. During this past decade, we have worked hard to combine the
efficiency and customer focus of private sector organizations with the public
service focus of government. We look forward to working with this subcommittee
to assure that the American people can continue to rely on the Postal Service
for high-quality, low-cost mail services.
Thank you, Mr. Chairman, that
concludes my statement.
END
LOAD-DATE:
September 18, 1999 
