USPS counts on tech to cut costs

Automation and information technology have helped U.S. Postal Service officials trim $8.3 billion from the organization's operating expenses, and Postmaster General John Potter expects that trend to continue.

"We will not back away from our aggressive posture on productivity gains," Potter said today.

Speaking to 6,000 USPS employees at the National Postal Forum in Washington, D.C., Potter said he would continue to press for greater productivity gains through technology innovation. Under Potter, the past three years have not been business as usual at the Postal Service.

After trimming 72,000 career staff employees from the payroll in the past three years, the Postal Service is down to about 708,000 career staff employees, the same number it had in 1984. But those 708,000 employees are delivering 65 billion more pieces of mail to 48 million more addresses, Potter said.

Through automation, USPS employees are sorting as much as 80 percent of the mail into the proper sequence for carriers to deliver it. Potter said his goal is 100 percent automated sequencing. "The only way to do that is by improving the quality of addresses and affixing the 11-digit bar code on all mail," he said.

USPS officials are interested in developing new automation technologies that will sort letters and flat mail packages into bundles ready for carriers to deliver, Potter said.

In addition to productivity gains, USPS officials want Congress to give them greater flexibility in setting postal rates, paying employees and managing postal business. Bills that incorporate those changes have been approved by committees in both the House and the Senate, but their chance of passage remains uncertain for the current session.

"There is now some momentum to change the law," said David Fineman, chairman of the Postal Service Board of Governors, who also addressed the forum.

But if legislation is not passed soon, USPS officials will have a difficult time trying to operate and break even in the face of declining first-class mail and electronic bill payments, Fineman said. "We have fulfilled our fiduciary responsibility," he said. "But we're going to have a hard time continuing to do that."

The Postal Service lost $4.5 billion during the past three years because of declining mail volume, while the number of postal addresses to which USPS provided service increased by about 1.8 million each year.

Beyond cutting costs, USPS officials are looking to new ways to increase demand for direct mail and other postal services. "There was a period of time when we thought the answer might have been e-commerce," Fineman said. But without elaborating, he said board members and postal officials decided to refocus on USPS' core business — delivering mail and packages.

"The entire Postal Service is focused on improving service, reducing cost and growing the business," Potter said.