FOR IMMEDIATE RELEASE Contact: Public Relations April 1, 2003 202-268-2155 Release No. 020 www.usps.com NO APRIL FOOLIN': POSTAL SERVICE SETS RECORD FOR ON-TIME DELIVERY WASHINGTON The Postal Service continued its drive for excellence by raising the national average for on-time delivery of First-Class Mail with a next-day delivery standard to an unprecedented 95 percent. It achieved this score during Quarter II (Nov. 30, 2002 through Feb.17, 2003) while delivering to a record 140 million addresses during one of the worst winters in recent memory. The record breaking achievements were reported at the monthly meeting of the Postal Board of Governors here. This now extends the national average of at least 93 percent to five-and-a-half consecutive years. Productivity, expense reductions offset weak revenue growth in Quarter II Chief Financial Officer and Executive Vice President Richard Strasser reported to the Board that mail volume still had not rebounded in Quarter II, due to the uncertain economy. Through productivity gains and expense reductions, Strasser said, Postal Service expenses for the quarter were $559 million below plan, $36 million below last year. Net income was $645 million for the quarter, $285 million over plan. Year-to-date revenues totaled $32.8 billion with expenses of $31.1 billion, leaving a net income of $1.65 billion. Strasser noted that the Postal Service makes most of its revenue in the first two fiscal quarters, with losses over the summer months as seasonal mail volume declines. "The net income is the result of productivity improvements, expense reductions and the rate increase, not volume growth," he said. "The expense reduction during the quarter was extraordinary," Strasser said, "and it came despite absorbing rising fuel costs, the impact from the severe snowstorms in the east this winter, and inflation in health benefits that will exceed $500 million for the year." A significant driver of the expense reductions came from reducing workhours. "Our plan called for a reduction of 40 million workhours this fiscal year," Strasser said. "We've already reduced workhours by 31 million as of Quarter II. Career complement has been reduced by 11, 485 through the second quarter. These actions will result in a fourth straight year of substantial productivity increases." "However," Strasser cautioned, "this good news is tempered by weak volume trends. Mail volume for Quarter II was essentially flat, with the increases in advertising mail and packages unable to offset the decline in First-Class Mail and other mail." Strasser said the outlook is not favorable to make volume or revenue targets for Quarter III, given the state of the economy. In other activity, the Board approved funding for a portion of renovations necessary as part of the pending sale and transition of the James A. Farley Building to the Pennsylvania Station Redevelopment Corporation. The Board also approved funding to design and develop 2,500 self service kiosks that will enable customers to conduct postal business just as ATMs enable customers to conduct self-service banking. Evaluation of 30 units will begin in October. Nationwide deployment will begin in mid-winter and is expected to be completed by summer 2004. Since 1775, the U.S. Postal Service has connected friends, families, neighbors and businesses by mail. It is an independent federal agency that makes deliveries to about 140 million addresses every day and is the only service provider to deliver to every address in the nation. The Postal Service receives no taxpayer dollars for routine operations, but derives its operating revenues solely from the sale of postage, products and services. With annual revenues of more than $67 billion, it is the world's leading provider of mail and delivery services, offering some of the most affordable postage rates in the world. The U.S. Postal Service delivers more than 43 percent of the world's mail volume - some 203 billion letters, advertisements, periodicals and packages a year - and serves seven million customers each day at its 38,000 retail locations nationwide. - 30 - FOR IMMEDIATE RELEASE Contact: Postal Service Public Relations April 1, 2003 202-268-2155 www.usps.com Release No. 19 POSTAL SERVICE Delivers record breaking service for America Washington, DC The U.S. Postal Service today reported that it has achieved its highest overnight service score for First-Class Mail delivery, breaking all previous records and setting a new bar for service in the nation's major metropolitan areas. The announcement came at a time when the Postal Service was also reporting that for the first time in its history, the number of addresses it delivers to in the United States had surpassed the 140 million mark. "This record-breaking service score is remarkable in its own right," said S. David Fineman, Chairman of the Postal Service Board of Governors, "but this exceptional level of service was realized during one of the worst winters in recent memory and when the number of addresses reached an all-time high." Francia G. Smith, vice president and consumer advocate, told the Postal Service Board of Governors that overnight First-Class Mail achieved the milestone of 95 percent on-time delivery service performance score during Postal Quarter II, the period between November 30, 2002 and February 21, 2003. This is the fourth consecutive quarter First-Class Mail delivery hit the 94 percent and above benchmark. First-Class Mail delivery performance is measured externally and independently by IBM's Business Consulting Services unit, using the External First-Class measurement system, or EXFC. It provides an independent assessment of the time it takes a piece of First-Class Mail, once its deposited into a collection box, to be delivered to one of the over 140 million American homes, businesses and post office boxes that are serviced six days a week. EXFC service performance scores are measured by testing 463 ZIP Code areas selected on the basis of geography and volume density from which 90 percent of First-Class Mail volume originates and 80 percent destinates. EXFC is not a system-wide measurement of all First-Class Mail performance. The Postal Service maintains a system of 85 management units by geographic areas, known as Performance Clusters (PCs). According to Smith, fourteen PCs achieved on-time delivery performance scores of 96 percent, while the San Jose Performance Cluster achieved 97 percent. IBM Business Consulting Services measures service performance for overnight, two-day and three-day service areas to provide national, area office, and PC estimates of service performance. This data is compared with Postal Service delivery standards and the results are presented to the public each postal quarter. Smith also reported that the most recent customer satisfaction survey shows 93 percent of households nationwide reported having a positive view of the Postal Service, rating overall performance as excellent, very good, and good. This is the sixth consecutive quarter in which ratings of overall performance have reached 93 percent. Customer Satisfaction Measurement (CSM) is independently measured by The Gallup Organization which conducts surveys on a variety of postal issues and services from a customer's perspective. These include accuracy and consistency of delivery; retail clerk courtesy, knowledge, and responsiveness to customers; and telephone courtesy and accuracy of information provided, to name a few. The Postal Service uses survey results to identify opportunities to improve customer satisfaction. EXFC Overnight Service Results NOVEMBER 30, 2002 february 21, 2003 (PQ II, FY 2003) EXFC externally measures collection box to mailbox delivery performance. EXFC continuously tests a panel of 463 ZIP Code areas selected on the basis of geographic and volume density from which 90% of First-Class volume originates and 80% destinates. EXFC is not a system-wide measurement of all First-Class Mail performance. PERFORMANCE CLUSTER RESULTS LOCAL 3-DIGIT ZIP CODES AKRON 94 436, 442, 443, 445, 447, 449 ALABAMA 92 350, 351, 352, 358, 361, 366 ALASKA* 95 995, 996 ALBANY 95 120, 121, 122, 123, 128, 130, 131, 132, 135, 139 ALBUQUERQUE 95 870, 871 APPALACHIAN 94 240, 250, 251, 252, 253, 263, 264, 265 ARIZONA 95 850, 852, 853, 855, 856, 857 ARKANSAS 95 720, 721, 722, 723, 727 ATLANTA 94 300, 301, 302, 303 BALTIMORE 95 210, 211, 212, 214, 217, 219 BIG SKY 96 590, 591, 598 BOSTON 94 021, 024 CAPITAL 94 200, 206, 207, 208, 209 CARIBBEAN 90 009 CENTRAL FLORIDA 94 327, 328, 329, 334 CENTRAL ILLINOIS 96 604, 605, 616, 617, 618, 627 CENTRAL NEW JERSEY 93 077, 085, 086, 088, 089 CENTRAL PLAINS 96 515, 516, 666, 670, 671, 672, 680, 681, 685 CHICAGO 94 606, 607 CINCINNATI 95 410, 450, 451, 452, 454, 458,470 CLEVELAND 95 440, 441 COLORADO/WYOMING 94 800, 801, 802, 803, 809, 820 COLUMBUS 95 430, 431, 432, 433 CONNECTICUT 94 060, 061, 062, 064, 069 DAKOTAS 96 570, 571, 573, 581 DALLAS 94 750, 751, 752, 754, 757 DETROIT 95 481, 482, 492 ERIE 96 159, 161, 164, 165, 166 FORT WORTH 95 760, 761, 762, 764, 791, 794 GATEWAY 94 620, 622, 630, 631, 633, 652 GREATER INDIANA 95 460, 461, 462, 463, 464, 466, 468, 469, 473, 478, 479 GREATER MICHIGAN 94 486, 488, 489, 490, 493, 494, 495 GREATER SOUTH CAROLINA 94 290, 291, 292, 293, 294, 295, 296 GREENSBORO 94 270, 271, 272, 273, 274, 275, 276, 277, 278, 286 HARRISBURG 94 170, 171, 172, 178, 180, 185, 187 HAWKEYE 95 500, 501, 502, 503, 507, 511, 520, 524, 612 HONOLULU 95 967, 968 *No Overnight standard. Score shown is for two-day performance. PERFORMANCE CLUSTER RESULTS LOCAL 3-DIGIT ZIP CODES HOUSTON 94 770, 772, 773, 774 KENTUCKIANA 94 400, 401, 402, 405, 406, 471, 477 LAKELAND 96 530, 531, 532, 535, 537, 543, 544, 549 LANCASTER 93 176, 189, 193, 194, 196 LONG BEACH 94 902, 903, 904, 905, 906, 907, 908 LONG ISLAND 93 115, 117, 118, 119 LOS ANGELES 95 900 LOUISIANA 95 700, 701, 705, 708, 711 MAINE 93 040, 041, 043, 044, 045, 048 MID-AMERICA 95 640, 641, 658, 661, 662 MID-CAROLINAS 93 280, 281, 282, 283, 288, 297 MIDDLESEX-CENTRAL 93 015, 016, 017, 018, 019 MISSISSIPPI 95 386, 390, 391, 392, 395 NEVADA-SIERRA 96 890, 891, 895 NEW HAMPSHIRE 94 030, 031, 032, 033, 034, 038 NEW YORK 93 100, 104 NORTH FLORIDA 95 320, 321, 322, 323, 325, 326 NORTHERN ILLINOIS 94 600, 601, 602, 603, 611 NORTHERN NEW JERSEY 93 070, 071, 072, 073, 074, 075, 076, 078, 079 NORTHERN VIRGINIA 95 201, 220, 221, 222, 223 NORTHLAND 95 540, 546, 550, 551, 553, 554, 559, 563 OAKLAND 96 945, 946, 947, 948 OKLAHOMA 95 730, 731, 740, 741, 743 PHILADELPHIA 92 190, 191 PITTSBURGH 95 150, 151, 152, 153, 154, 156 PORTLAND 96 970, 971, 972, 973, 974, 986 RICHMOND 95 224, 225, 230, 231, 232, 233, 234, 235, 238 RIO GRANDE 95 765, 767, 780, 781, 782, 784, 786, 787, 788, 789, 797, 799 ROYAL OAK 95 480, 483, 484, 485 SACRAMENTO 96 952, 956, 957, 958 SALT LAKE CITY 96 840, 841, 844 SAN DIEGO 95 919, 920, 921, 924 SAN FRANCISCO 95 940, 941, 943, 944, 949 SAN JOSE 97 933, 937, 939, 950, 951 SANTA ANA 95 917, 918, 926, 927, 928 SEATTLE 96 980, 981, 982, 984, 985 SOUTH FLORIDA 95 330, 331, 332, 333 SOUTH GEORGIA 95 309, 310, 312, 314, 319 SOUTH JERSEY 93 080, 081, 082, 083, 084, 197, 198 SOUTHEAST NEW ENGLAND 94 020, 023, 027, 028, 029 SPOKANE 96 835, 837, 838, 990, 991, 992, 994 SPRINGFIELD 95 010, 011, 012, 013, 050, 054 SUNCOAST 94 335, 336, 337, 338, 339, 341, 342, 346 TENNESSEE 93 370, 371, 372, 374, 379, 380, 381 TRIBORO 93 110, 112, 113, 114, 116 VAN NUYS 95 911, 913, 914, 915, 916, 930, 931 WESTCHESTER 94 105, 106, 107, 108, 109, 125 WESTERN NEW YORK 96 140, 141, 142, 143, 144, 145, 146