Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-15-01156/USCOURTS-caDC-15-01156-1/pdf.json

Parties Involved:
American Postal Workers Union, AFL-CIO
Petitioner
Postal Regulatory Commission
Respondent
United States Postal Service
Intervenor for Respondent

Document Text:

POSTAL ACCOUNTABILITY AND 

ENHANCEMENT ACT § 302 

NETWORK PLAN 

June 2008 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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United States Postal Service Section 302 Network Plan 

June 2008

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TABLE OF CONTENTS

Executive Summary...............................................................................................4 

 I. The Performance Goal: Continuous Improvement......................................7 

II. Operationalizing Service Standards............................................................9 

A. Software Advancements for Improved Mailflow Management.......10 

1. Sort Program Generator Utility............................................10 

2. Run Plan Generator.............................................................11 

B. Value Stream Mapping...................................................................11 

1. Commercial First-Class Mail Induction................................11 

2. Labeling List Validation........................................................12 

C. Data System Enhancements..........................................................12 

1. Mail History Tracking System..............................................13 

2. Machine Performance Scorecard System...........................13 

3. Unplanned Notification System...........................................13 

4. Facility Access and Shipment Tracking...............................13 

D. National Critical Entry Times for Standard Mail..............................14 

E. Standard Mail Color Code Policy Revision.....................................15 

F. Conclusion......................................................................................15 

III. Network Rationalization............................................................................16 

A. Postal Service Network Vision.......................................................16 

B. Network Plan Components.............................................................17 

1. Airport Mail Center Closures...............................................17 

a. Air Transportation Strategy.......................................17 

i. Creation of the Shared Network.....................18 

ii. Streamlining the Commercial Air Network.....18 

b. Impact of Strategy on AMC Operations....................19 

c. AMC Closures...........................................................20 

2. Area Mail Processing Consolidations..................................21 

a. The Benefits of AMP Consolidation..........................21 

b. Methods of Identifying AMP Consolidation 

Opportunities.............................................................22 

c. Overview of Internal AMP Review Process..............23 

d. AMP Feasibility Study Criteria..................................26 

e. Public Communication and Input..............................27 

i. AMP Communications Plan...........................27 

ii. Public Input Process......................................28 

f. Network Plan AMP Consolidation Approach............29 

3. Bulk Mail Center Transformation.........................................30 

a. Evolution of the BMC Network..................................30 

b. Time-Definite Surface Network.................................31 

c. Program Status.........................................................32 

C. Integration of Network Initiatives....................................................34 

D. Regulatory Concerns.....................................................................34 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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IV. Workforce Rationalization and Employee Impact Policies........................36 

A. Long-Term Workforce Vision and Complement Planning..............36 

B. Employee Impact Policies..............................................................37 

1. Bargaining Unit Employees.................................................37 

a. No Layoff/No Reduction in Force (RIF) Provisions...37 

b. Reassignment and Saved Rate/Protected Rate 

Provisions..................................................................38 

c. Recall Rights Provisions...........................................38 

d. Voluntary Early Retirement Provisions.....................38 

e. Severance Pay Provisions........................................38 

2. Non-Bargaining Employees.................................................38 

a. Voluntary Promotion-Reassignment-Downgrade 

Opportunities and Grade/Salary Protection...............39 

b. Voluntary Early Retirement Opportunities.................39 

c. Directed Reassignments...........................................39 

C. Conclusion......................................................................................40 

V. Alternate Retail Options............................................................................41 

A. www.usps.com...............................................................................41 

B. USPS Approved Shippers..............................................................42 

C. Contract Postal Units......................................................................42 

D. Post Office Express........................................................................43 

E. Retail Facilities with Overhead Costs Shared by Other 

Government Agencies.................................................................43 

F. Stamps on Consignment................................................................43 

G. Stamps by Mail...............................................................................44 

H. Postal Carrier Retail Transactions..................................................44 

I. Automated Postal Centers.............................................................44 

J. Vending Machines..........................................................................45

K. Postage Meters..............................................................................46 

L. PC Postage....................................................................................46 

M. Conclusion......................................................................................48 

Network Plan Conclusion......................................................................................49 

TRADEMARKS 

The following are among the many trademarks owned by the United States Postal Service: APC®, 

Automated Postal Center®, Carrier PickupTM, Certified MailTM, Click-N-Ship®, Delivery ConfirmationTM, 

DMM®, Express Mail®, First-Class Mail®, Intelligent Mail®, Parcel Post®, PC Postage®, PLANET Code®, 

Post OfficeTM, Postal ServiceTM, Priority Mail®, Stamps by Mail®, Standard Mail®, The Postal Store®, 

United States Postal Service®, U.S. MailTM, U.S. Postal Service®, USPS®, www.usps.com®, and ZIP 

CodeTM. 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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EXECUTIVE SUMMARY 

Subchapter VII of the Postal Accountability and Enhancement Act (PAEA), Public 

Law 109-435, 120 Stat 3198, specifies three objectives which, after consultation 

with the Postal Regulatory Commission, the United States Postal Service must 

fulfill in relation to service standards for its market-dominant products. First is the 

establishment of modern service standards, which was accomplished in 

December 2007. Second is the implementation of systems for measuring service 

standard achievement. After extensive inter-agency consultations, the Postal 

Service has developed measurement system proposals for various marketdominant products and, to the extent required by the PAEA, has requested the 

Commission’s review and approval of these systems. Third is the submission to 

Congress of this Network Plan which addresses the establishment of 

performance goals; describes the changes to the Postal Service’s processing, 

transportation, and retail networks necessary to allow it to meet those 

performance goals; summarizes the Postal Service’s vision for rationalizing its 

infrastructure and workforce; discusses policies governing reemployment within 

the agency and early retirement for employees who may be displaced as a result 

of network rationalization; and explains the future role of various alternative 

postal retail service access channels. This Network Plan positions the Postal 

Service to pursue achievement of the newly established service standards, and 

better ensures the long-term financial stability of the Postal Service and the 

mailing industry. 

Entrusted with the responsibility of binding the nation together through the 

personal, educational, literary and business correspondence of the people, the 

Postal Service continuously strives to provide prompt, reliable, cost-effective, and 

efficient services to all of its customers in an environmentally sound way. The 

sheer size of the postal network -- over 400 mail processing plants and related 

logistics and transfer facilities, over 37,000 Post Office locations and 63,000 

alternate access points, approximately 786,000 career and non-career 

employees, a fleet of nearly 202,000 of its own surface delivery and transport 

vehicles, and the responsibility of delivering to nearly 148 million addresses six 

days a week -- makes network rationalization, the marketing and promotion of 

alternate postal retail access options, and improved efficiency all very 

challenging goals to pursue. This is especially the case at a time of 

unprecedented fuel and utility cost increases, and concern for the impact of 

various policy choices on the environment. 

Prepared to meet those challenges, the Postal Service hereby submits to 

Congress its Network Plan, the major elements of which are summarized below: 

I. The Performance Goal: Continuous Improvement 

The network plan establishes continuous improvement as the Postal 

Service’s overall performance goal and describes the timetable for the 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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establishment of baseline performance targets for various marketdominant products. 

II. “Operationalizing” the Service Standards 

“Operationalizing” service standards refers to the set of initiatives taken to 

improve the consistency of internal mailflow management practices and 

enhance the Postal Service’s ability to meet its performance targets. 

Software advancements, value stream mapping and the implementation of 

Lean Six Sigma tools, data system enhancements, the establishment of 

national critical entry times for destinating Standard Mail, and a revised 

Standard Mail color code policy are just some of the actions taken in the 

overall network reconfiguration effort to support the achievement of the 

service standards performance goal and targets. 

III. Network Rationalization 

The network rationalization plan contains three integrated core elements. 

The first is the continuation of the closure of redundant postal Airport Mail 

Centers, in conjunction with changes in air mail transportation operations. 

The second component involves a review of the mail processing network 

as a whole to identify mail processing plants where all outgoing and/or 

incoming mail processing operations could be consolidated into nearby 

plants. Before making any decisions, the Postal Service will employ its 

recently enhanced Area Mail Processing (AMP) guidelines to assess the 

feasibility of local consolidation opportunities, to provide notice of local 

study plans to the public and potentially affected employees, to measure 

the postal costs and benefits, to identify potential customer and employee 

impacts, and to solicit public input. In consolidating mail processing 

operations, it will be the Postal Service’s objective to minimize the degree 

to which any mail plant consolidations result in downgrades to the FirstClass Mail service standards applicable to any 3-digit ZIP Code origindestination pairs that were established in December 2007. 

The third element of the plan is the transformation of the postal Bulk Mail 

Center (BMC) network. Price incentives for presortation and the increase 

in destination entry of Standard Mail and Package Services over the past 

several decades have resulted in underutilization of existing BMC network 

capacity. The Postal Service is exploring the potential costs and benefits 

of outsourcing the processing and transportation of mail currently flowing 

through its BMC network, in order to focus on the downstream sortation 

and delivery of such mail. Should it occur, such outsourcing would permit 

the Postal Service to reconfigure BMCs to take on new responsibilities as 

part of its future network, including the deployment of Phase II of its Flats 

Sequencing System (FSS) equipment. FSS II is expected to bring 

significant improvement to the automated sortation of flat-shaped mail 

pieces. 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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IV. Workforce Rationalization and Employee Impact Policies 

In the face of declining mail volumes and recent changes in the mail mix, 

effective workforce complement planning is an even more important 

objective under the newly established price cap regime for annual rate 

adjustments. Network rationalization raises the prospect of change that 

could affect postal employees working in mail processing plants. The 

Postal Service is sensitive to the impact that institutional change can have 

on its employees. Accordingly, it has in place a number of policies and 

collective bargaining agreements that are designed to provide advance 

notice to potentially affected employees. These policies and agreements 

fairly identify which employees will be extended opportunities for 

reassignment to other positions within the agency, and specify the benefits 

afforded to employees who will not be retained. 

V. Alternate Retail Options 

Retail postal customers traditionally obtain access to postal products at 

Post Office units. Over time, the Postal Service has developed alternate 

channels of retail access to improve customer convenience. PAEA § 302 

lists a number of such alternatives and directs the Postal Service to outline 

its plans for expanding and marketing their availability. The Postal Service 

describes each of the listed alternatives, as well as others that have been 

implemented or that currently are being tested. Whether through 

traditional “brick and mortar” Post Office locations, other retail locations, or 

online, the Postal Service will continue to actively promote increased 

customer use of efficient and easy-to-use retail access channels. 

The Postal Service will report such information as is required by the terms of 

PAEA § 302(c)(4)(B) to Congress no later than 90 days after the end of each 

fiscal year during which it implements any portion of this Network Plan. 

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I. THE PERFORMANCE GOAL: 

 CONTINUOUS IMPROVEMENT 

The performance goal of the Postal Service is one of continuous improvement. 

Progress toward achievement of this goal in relation to service standards will be 

monitored through a combination of service performance measurement systems. 

These systems will permit comparison of actual service performance to 

performance targets established for Single-Piece First-Class Mail, Single-Piece 

First-Class Mail International, Presort First-Class Mail, Standard Mail, 

Periodicals, Package Services,1 and Special Services. 

Service standards and performance goals under PAEA §§ 302(a) and (b)(1) 

serve as the foundation for the provision of annual reports by the Postal Service 

to the Postal Regulatory Commission (Commission) on market-dominant product 

service standard and performance goal achievement under 39 U.S.C. § 

3652(a)(2)(B). Measurement systems for Single-Piece First-Class Mail, SinglePiece First-Class Mail International, and retail Package Services parcels exist 

presently. In consultation with the Commission under the terms of PAEA 

§§ 3691(b)(1)(D) and (b)(2), the Postal Service is implementing expanded 

measurement systems for Single-Piece First-Class Mail; new systems for Presort 

First-Class Mail, Standard Mail, Periodicals and Presort Package Services; and 

measurement systems for monitoring the quality of service performance of a 

number of market-dominant Special Services products. Implementation of these 

systems will continue through fiscal year (FY) 2009. 

Ideally, as a basis for establishing quantitative FY 2009 performance targets for 

each product, the Postal Service would be able to rely on systemwide historical 

service standard achievement data for each of these products. However, 

because the measurement systems all are either being expanded or developed, 

such data do not presently exist. Nevertheless, the Postal Service is committed 

to establishing FY 2009 service standard targets before the conclusion of FY 

2008. Of necessity, it will do so without data of the scope and quality as will be 

generated by those measurement systems in the future. PAEA 

§§ 3653(b) and (c) contemplate that the Postal Service, in the future, may adjust 

service standard achievement targets after consideration of the Commission’s 

annual review of compliance with the previous year’s service standards and 

performance targets. Postal management intends to obtain the approval of the 

USPS Board of Governors in establishing a set of FY 2009 market-dominant 

product performance targets. When those targets are established, they will be 

transmitted to the Commission for purposes of its 2009 annual service 

performance compliance review. 

 

1

 The term “Package Services” is used to refer collectively to Single-Piece Parcel Post, Media 

Mail, Bound Printed Matter, and Library Mail. 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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After establishing these FY 2009 targets, the Postal Service will, at a minimum, 

conduct an annual service standard target review before the beginning of each 

succeeding fiscal year. Target setting today is driven by the Postal Service’s 

commitment to service quality, and the Postal Service will consider adjusting 

targets more than once a year, if it determines that a higher level of service 

quality can be achieved. When considering performance target adjustment, 

postal management will carefully examine existing service standards and 

performance targets, available performance data, recommendations offered by 

the Commission as a part of its annual review under PAEA § 3653(b)(2), and 

such other factors as are deemed relevant. 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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II. “OPERATIONALIZING” SERVICE STANDARDS 

The service standards for market-dominant products established in December 

2007 are the result of a comprehensive review process that reasonably matched 

operational capabilities across the entire postal network with the wants and 

needs of the greatest number of postal customers. The Postal Service carefully 

analyzed and considered present-day mail transportation, highway mileage 

between postal processing facilities, the shift toward greater destination entry of 

mail by customers, and the processing flows that have developed in recent years 

to reflect current mail processing facility functions, technologies, economies and 

capabilities. The service standards reflect adjustments that were made to 

determine the expected delivery day for mail originating and destinating among 

the nearly 851,000 3-digit ZIP Code area origin-destination pairs that comprise 

the postal network for each mail class. 

While developing these service standards, the Postal Service also began taking 

steps to “operationalize” them. “Operationalizing” service standards refers to the 

set of initiatives taken to improve the consistency of internal mailflow 

management practices in order to enable achievement of performance targets. 

The Postal Service realizes that to succeed in today’s world, efficiency must be 

increased, and costs must be decreased, across all operations and processes. 

New tools, technologies, and unprecedented levels of information are identifying 

opportunities to reengineer operations and processes that currently add little 

value. About $1 billion in savings planned for FY 2008 alone are expected to 

come from investments in enhanced equipment and systems, as well as process 

improvements. 

Increasing operational efficiency while decreasing costs is nothing new for the 

Postal Service. In fact, over the course of the last several years, the Postal 

Service has balanced service performance and cost reductions by focusing on 

continuous process improvements and increased utilization of its automated mail 

processing equipment. Using Lean Six Sigma problem solving approaches, the 

Postal Service has focused on eliminating defects and reducing variability in its 

mailflows, identified control points within its 24 hour processing window to ensure 

that key operational hand-off points are aligned, and deployed key metrics for 

evaluating the performance of mail processing equipment operations and 

maintenance. The elimination of non-value added activities, as well as the 

reduction of cycle time, have resulted in additional process improvements. 

As a result of the efforts described above, First-Class Mail service scores have 

continued to set new records. For the first time during Quarter II, FY 2008, 

national level External First-Class Measurement system overnight service 

performance was 96.4 percent, extending the streak of successive quarters 

above 96 percent. New records were also established for 2-day performance 

(94.2 percent) and 3-day performance (91.9 percent) for First-Class Mail. 

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The Postal Service expects to continue this trend with the operational 

investments described below. Software advancements, value stream mapping, 

data system enhancements, the establishment of national critical entry times for 

destinating Standard Mail, and a revised Standard Mail color code policy are just 

some of the many actions taken in the overall network reconfiguration effort to 

support the achievement of the service standards, the overall performance goal, 

and numerical service targets. 

To coordinate implementation of mail processing changes and improve local 

operational discipline across a vast and complex network, the Postal Service is 

deploying Operations Industrial Engineers and Automation Operations 

Specialists to standardize operations, provide technical and operational guidance 

to mail processing plants, and conduct studies and field experiments designed to 

increase operational efficiency or validate that operations are moving in the right 

direction. Continuous improvement teams have been formed and are actively 

using Lean Six Sigma tools. Maintenance groups are concentrating on improving 

mail processing equipment quality to reduce defects that are related to such 

conditions as machine jams. Other teams have been formed to conduct value 

stream mapping applications for current and future states, to eliminate waste in 

processing operations and Business Mail Entry Units. 

Achievement of applicable service standards, and the full benefits of the 

“operationalizing” initiatives, can only be realized through the combined efforts of 

the Postal Service and its customers. When mail is not presented in a manner 

that meets applicable preparation requirements, improved efficiency, cost control 

and price stability will not be achievable. Accordingly, the Postal Service values 

the ongoing cooperation of the mailing community. 

 A. Software Advancements for Improved Mailflow Management 

New tools recently have been, or soon will be, made available to local mail 

processing managers to improve their ability to coordinate and improve 

operations. 

1. Sort Program Generator Utility 

At postal processing plants, mail sorted on automated processing equipment 

flows to certain machine bins or stackers based on sort programs. These sort 

programs are developed locally and vary by plant, and local plant personnel must 

be trained to develop and maintain these programs. On a typical day, the Postal 

Service uses 38,000 sort programs to process mail on over 5,900 sortation 

machines. 

A new software application, entitled Sort Program Generator Utility (SPGU), is 

being developed to centralize the development of sort programs. Its inputs 

include operational mail densities and standardized sort program logic, 

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transportation availability, and applicable service standards. SPGU creates sort 

programs that maximize tray densities, resulting in fewer trays that have to be 

transported through the network. Mail flows will be standardized throughout the 

country, facilitating an improved training/learning curve for new employees. 

Standardization of machine sort programs will improve the consistency of 

mailflows in different processing plants across the network. 

Currently, SPGU will be phased-in nationally. Phase I, which focuses on 

outgoing sort programs, will be initiated early in FY 2009. Phase II, which 

focuses on incoming sort programs, will follow in FY 2010. 

2. Run Plan Generator 

The Run Plan Generator (RPG) is a software program that assists in the 

development of mail processing equipment operating schedules. Creating such 

schedules in advance of actual processing allows plant managers to highlight 

areas where changes can be made to increase efficiency. RPG also allows 

these managers to make proactive decisions on staffing, equipment utilization 

and maintenance. It gives them benchmarks with which to make instant 

assessments of ongoing mail processing and transportation dispatch operations, 

and to decide if, when, and where to shift resources to maximize their use. RPG 

also helps managers identify available nearby resources when adjustments are 

needed to handle unanticipated equipment breakdowns, or adverse weather 

conditions affecting mail transportation. In addition, RPG will be used to model 

and analyze scenarios involving potential changes to sort programs, equipment, 

or personnel before implementation. Modeling can be performed to show highvolume customers the mutual benefits that can be obtained through adjustments 

in their mail dropship practices. 

 B. Value Stream Mapping 

Value stream mapping (VSM) is a technique used to analyze the flow of 

materials and information currently required to bring a product or service to a 

customer. VSM identifies waste or operational deficiencies that might prevent 

the Postal Service from meeting customers' expectations related to on-time 

delivery performance. 

As part of its operationalizing effort, the Postal Service used value stream 

mapping to analyze a variety of different product mailflows. Several examples 

are summarized below. 

1. Commercial First-Class Mail Induction 

Teams of postal operational experts worked with commercial First-Class Mail 

users to value stream map the preparation and processing of letters, cards, and 

flats, beginning at the mailer facility. Mapping continued with the induction and 

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distribution processes at postal facilities in Sacramento CA, Hartford CT, and 

Springfield MA. The mapping ended when the commercial First-Class Mail 

merged into the postal transportation network for distribution and delivery. Value 

stream mapping identified opportunities for increased efficiency across the 

preparation/induction process.

2. Labeling Lists Validation 

The Postal Service reviewed mail processing operations in order to create a 

value stream map of the current state of the processing of origin-entered mail 

presented by commercial mailers using certain labeling lists.2

 Value stream 

mapping initiatives identified inefficiencies in the flow of mail based on existing 

labeling lists, which resulted in the Postal Service’s current labeling list validation 

efforts. 

Currently, the Domestic Mail Manual (DMM) has 20 different labeling lists that 

commercial mailers use based on the preparation requirements applicable to 

different products and presort categories. Various analytical tools and 

techniques were utilized to validate current labeling list data against internal 

logistics systems. In some instances, lists were updated to conform mail 

preparation to postal mailflows and transportation changes that would be 

implemented to meet the newly established service standards. Commercial 

mailers were notified of the DMM labeling list changes in Postal Bulletin 22234 at 

24 (June 5, 2008) and are expected to comply on or before August 17, 2008.3 

This validation effort is continuing and the Postal Service expects additional 

adjustment will be required as it implements the Network Plan. 

 C. Data System Enhancements 

Access to more robust operational data provides postal managers with an 

enhanced ability to improve and protect the quality of service. Recently 

developed and/or enhanced postal mail processing data reporting systems 

provide a broad spectrum of useful information and identify opportunities to 

reengineer processes to add value. These systems allow the Postal Service to 

overcome operational deficiencies and anomalies, reduce or eliminate service 

failures, and pinpoint the specific source of mail processing problems that, in the 

absence of such systems, were previously the subject of speculation or trial-anderror testing. The Postal Service now uses an assortment of data systems, 

including the four recently developed or enhanced systems described below. 

 

2

 Labeling lists are generated by the Postal Service to provide mailers with information with which 

to label containers of mail, based on destination ZIP Codes, presort level, and product type. 

These labels are used by postal mail processing employees to identify the operations and 

transportation to which the containers should be directed. 

3

 See http://www.usps.com/cpim/ftp/bulletin/pb2008.htm. 

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1. Mail History Tracking System 

Recent enhancements to the Postal Service’s Mail History Tracking System 

(MHTS) now permit system analysts to automatically track individual letter mail 

pieces and perform diagnostics to determine where operational efficiency 

improvements can be realized. MHTS provides valuable insight to local Delivery 

Point Sequencing letter mail processing operations. MHTS highlights mail 

processing equipment operational variability that is under the control of either 

machine operators or maintenance personnel, so that procedures can be 

implemented to reduce local fluctuations in mail processing quality and improve 

the operation and maintenance of equipment. 

Initially deployed in December 2006, MHTS has undergone numerous iterations 

that have yielded new data fields and complex computations. It leverages the 

ability of computers to analyze 1.5 billion rows of data, loaded from 190,000 daily 

mail processing production runs, in plants throughout the postal network. MHTS 

now generates a range of data that can be used daily on a local basis to help 

identify missent, missorted, and missequenced mail before delivery, allowing for 

the recovery of errors before service is adversely affected. 

2. Machine Performance Scorecard System 

By measuring local mail processing equipment performance against national 

benchmarks, Machine Performance Scorecards give local managers a 

convenient metric against which to analyze machine and operator performance. 

Scorecard reports provide virtually instant information on mail processing 

equipment performance, as well as guidance for correction and improvement.

3. Unplanned Notification System 

Another Lean Six Sigma success story that has driven improvement in service 

performance is the national implementation of the Unplanned Notification 

System. This system generates virtually instant reports to managers at each 

mail processing plant. These reports identify -- on a machine-specific basis -- 

electro-mechanical malfunctions that cause bins on a delivery barcode sorter 

(DBCS) to missort mail. Acting on these reports, machine operators and 

maintenance personnel can correct machine malfunctions and recover missorted 

mail from DBCS bins for reprocessing. This continuous improvement effort has 

reduced missorted mail system-wide and has contributed to improved service 

performance. 

4. Facility Access and Shipment Tracking 

The Facility Access and Shipment Tracking (FAST) system allows commercial 

mailers to schedule appointments for mailings they transport to postal facilities 

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for acceptance. FAST enables the Postal Service to plan and schedule the use 

of its mail processing personnel, equipment, and transportation more effectively. 

Mailers can use FAST to track their drop shipments, receive notification of 

redirections, submit and manage recurring appointment requests, and have joint 

scheduling capabilities. FAST also includes a nationwide mailer rating program 

which provides users with incentives for higher standards of performance. 

Mailers are scored on submission method, content detail and accuracy, and ontime accuracy. Points are deducted for untimely notification of changes to 

appointments, irregularities in mail preparation, improper mail makeup, and 

damaged mail. A high mailer rating offers mailers enhanced opportunities to 

obtain desired appointments. 

 D. National Critical Entry Times for Standard Mail 

Generally speaking, a critical entry time is the latest time that mail can be 

received at an induction or acceptance point in the postal network to have the 

day of entry designated as the “start-the-clock” date. If Standard Mail pieces are 

accepted after the applicable CET, those pieces have a "start-the-clock" date of 

the following applicable acceptance day. CETs are intended to ensure that 

Standard Mail flows through the postal processing network in a manner that 

supports the achievement of service standard targets. 

Two national CETs for Standard Mail have been established – one for pallets or 

other containers, and another for bedloads.4

 These CETs were created through 

an intensive modeling effort that identified the service standard for each 3-digit 

ZIP Code origin-destination pair in the postal network, and calculated service 

standard compliance based on user entry of proposed critical entry times. The 

model included all processing locations, and the distance and travel time 

between facilities for each origin-destination pair. Input variables included the 

critical entry time and operating window for each location. Given the critical entry 

time, operating window, and travel time from point to point, the model was used 

to determine if service achievement was possible for a specific 3-digit ZIP Code 

pair under different scenarios. 

National CETs for Standard Mail ultimately were established after consultations 

with the mailing industry concerning drop-shipment times. The Postal Service 

continues to work closely with its customers to create CETs for other classes of 

mail and to optimize mailer preparation requirements. In collaborating with 

mailers, the Postal Service intends, as always, to improve service quality and 

reliability, while increasing efficiency and achieving the lowest combined cost. 

 

4

 Bed-loading, also known as floor-loading or deck-loading, refers to the use of a brick-laying or 

T-stacking technique for loading individual handling units into trailers for surface transportation. 

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E. Standard Mail Color Code Policy Revision 

The Postal Service’s long-standing practice of color coding containers of 

Standard Mail improves the timeliness of processing, dispatch, and delivery in 

relation to service standards. Each postal work day is uniquely identified with 

one of seven colors – white, blue, orange, green, violet, yellow, or pink. Color 

codes offer a simple way to help manage the sequence in which numerous 

containers of Standard Mail at a given postal facility will be processed in order to 

best achieve service expectations. Color coded tags are applied to containers of 

Standard Mail according to a specific matrix based upon date, time, and entry 

location. Each tag reflects the expected day for clearance, processing, or 

delivery. The Standard Mail Color Code policy provides postal managers with a 

method of identifying which Standard Mail should receive priority in dispatch and 

processing. 

F. Conclusion 

The Postal Service’s “operationalizing” initiatives will enhance its ability to 

achieve the service standards recently established in December 2007, as well as 

the overall goal of continuous improvement, and the FY 2009 service targets. 

These initiatives also reflect the Postal Service’s commitment to constantly refine 

its mail processing operations and make capital investments designed to improve 

service levels – all while keeping costs to a minimum. The cooperation of the 

mailing community is necessary for these efforts to bear fruit. As it implements 

these changes to improve the national postal system and to better serve the 

public, the Postal Service looks forward to the support and oversight of the 

Congress. 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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III. NETWORK RATIONALIZATION 

PAEA subsections 302(c)(1)(A) through (C) reflect Congressional findings that: 

the Postal Service has more than 400 logistics facilities separate from its 

post office network; 

as noted by the President’s Commission on the United States Postal 

Service, the Postal Service has more facilities than it needs and the 

streamlining of this distribution network can pave the way for the potential 

consolidation of sorting facilities and the elimination of excess costs;5 and 

 the Postal Service has always revised its distribution network to meet 

changing conditions and is best suited to address its operational needs. 

The need to analyze opportunities for network rationalization has been a high 

priority of the United States Postal Service. There has been a constant effort to 

make its mail processing and transportation networks more efficient, economical, 

and environmentally sound. Recent strategies have been very effective, 

producing eight straight years of productivity growth, as well as more than $7.5 

billion in savings since 2002.6 These savings have been accomplished with 

minimal impact on postal employees. The Postal Service expects to build upon 

this achievement through the network strategy described below. 

A. Postal Service Network Vision 

In providing universal service throughout the United States and its territories, the 

Postal Service manages one of the largest and most complex distribution and 

transportation networks in the world. The Postal Service’s networks have 

evolved to meet the demands of a growing nation, geographical population shifts, 

changing customer needs, and new technological advancements. In response to 

recent declining mail volume trends, the Postal Service’s goal has been to create 

an efficient and flexible network that results in lower costs for both the Postal 

Service and its customers, improves the consistency of mail service, and reduces 

the Postal Service’s overall “environmental footprint”. For these reasons, a key 

objective in the Postal Service’s Strategic Transformation Plan (2006–2010)7 is 

to optimize its distribution and transportation networks. 

 

5 Embracing The Future: Making the Tough Choices to Preserve Universal Mail Service, 

President’s Commission on the United States Postal Service (July 31, 2003). See, 

http://www.treas.gov/offices/domestic-finance/usps/. 6 See the USPS Strategic Transformation Plan (2006–2010) 2007 Update at 15 (December 

2007). The 2007 Update is accessible at http://www.usps.com/strategicplanning/2006-2010.htm. 7 See http://www.usps.com/strategicplanning/stp2006_2010/STP05R.pdf. 

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Throughout this decade, network realignment has been a matter of intense study 

by senior postal management. The plan described below combines existing 

strategies and new concepts designed to respond to recent factors, such as the 

decline in First-Class Mail volume, the shift toward increased destination entry of 

Standard Mail and Presort Package Services mail, the impact of increased fuel 

costs on transportation, and the new price cap regime now applicable to marketdominant postal products and services. The core elements of the Network Plan 

are as follows: 

• the completion of the postal transportation strategy through closure of 

Airport Mail Center (AMC) operations 

• the elimination of excess mail processing capacity in Processing & 

Distribution Centers (P&DCs) through the consolidation of operations 

using newly revised Area Mail Processing (AMP) guidelines 

• the possible creation of a time-definite surface transportation network that 

responds to the shift toward destination entry of mail, and transforms 

existing Bulk Mail Centers (BMCs), established in the 1970s, into state-ofthe-art processing and transportation facilities. 

The PAEA encourages the Postal Service to “expeditiously move forward in its 

streamlining efforts...” Id. at § 302(c)(1)(D)(i). To achieve the vision described 

above and maintain the ability to provide the nation with affordable universal 

service, the Postal Service will need the support of Congress. Any specific local 

operational consolidation or mail processing facility closure should be viewed as 

a component of a strategy designed to serve the overall needs of the postal 

system. It will be important to the Postal Service’s pursuit of its Congressional 

mandate that each member of Congress concerned about a local postal 

operational change also consider the needs of the nation as a whole. As this 

effort progresses, the Postal Service will follow its well-established processes to 

keep local communities informed and provide opportunities for public input. It 

also will continue to work closely with its employee unions and associations. 

 B. Network Plan Components 

 1. Airport Mail Center Closures 

 a. Air Transportation Strategy 

The groundwork for the Postal Service air transportation strategy dates back to 

plans first implemented in 2001. The objective of the transportation strategy is to 

develop more efficient and service-responsive networks. The strategy focuses 

on using the right network for the right product. The goal is to optimize both 

service and cost by using the right combination of air transportation (cargo and 

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commercial carriers), and surface transportation (contract and postal), to yield a 

network that operates at lower-cost with high on-time performance. 

i. Creation of the Shared Network 

In 2001, the Postal Service began realizing this vision when it procured the 

services of a single major air cargo carrier to provide air transportation for FirstClass Mail, Priority Mail and Express Mail. The Postal Service had concluded 

that its future air transportation strategy required a large-scale cargo carrier with 

national reach that was capable of providing stable, high-performing air 

transportation service for its First-Class Mail and expedited delivery products. At 

the time, the Postal Service determined that a particular major air cargo carrier 

was the supplier best capable of sorting and transporting mail containers through 

its network in an expeditious manner, while maintaining high service commitment 

levels. 

In an effort to augment the resulting Shared Network, further improve service, 

and encourage price competition among different air service providers, the Postal 

Service entered into a contract in 2006 with a second major air cargo carrier that 

also satisfied its network scale, information technology capabilities, financial 

stability and operational infrastructure compatibility criteria. This second contract 

has increased the service reach of the postal Shared Network and protects the 

long-term business interests of the Postal Service. It is envisioned that the 

amount of mail transported under this second agreement will continue to grow 

over time, and thus, continue to generate robust competition for the provision of 

dedicated air transportation at a cost level that is beneficial to the Postal Service 

and its customers. 

ii. Streamlining the Commercial Air Network 

A second component of the Postal Service’s air transportation strategy is the 

continued use of cargo space on commercial airlines where it is cost and service 

effective. Since 2003, Postal Service contracts with commercial airlines have 

included requirements for scanning of mail containers and specific performance 

goals. Since that time, the Postal Service has been able to track the actual 

performance of all such air transportation suppliers based on this scanning 

technology, allowing it to weigh both the cost and a specific carrier’s service 

performance in selecting air routes that provide the best value. 

The scanning requirements now allow the Postal Service to focus on contracting 

with the highest performing commercial air carriers. As recently as 2001, the 

Postal Service contracted with as many as 55 airlines. In 2008, that number was 

reduced to the seven highest performing carriers. Current commercial air 

contracts offer the advantage of serving more origins and destinations and 

providing a low-cost alternative to the cargo carriers with similar service 

performance. 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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b. Impact of Strategy on AMC Operations 

The development of the Shared Network has not only resulted in lower cost and 

higher performance, but also has had a significant impact on postal Airport Mail 

Center (AMC) operations. AMCs are postal facilities that have traditionally been 

operated for the purpose of expediting the transfer of mail (“tender and receipt”) 

to and from commercial passenger airlines. These facilities are generally located 

on property close to the airport ramp and, as such, are among the most 

expensive properties owned or leased by the Postal Service. The core 

operations of an AMC are: 

• assignment of mail to flights 

• receipt and dispatch of mail to/from air carriers 

• acceptance and separation of mail to/from postal mail processing plants 

• performance measurement and quality control of air carrier operations. 

An AMC receives containers of mail from the local postal Processing & 

Distribution Centers (P&DCs) and routes each container to the appropriate 

airline, which flies the mail to the associated AMC of the destination P&DC. That 

AMC receives the mail from the airlines for transfer to its local P&DC for 

processing and delivery. Historically, substantial percentages of Express Mail, 

Priority Mail and First-Class Mail were transported via commercial passenger 

airlines. Because containers of mail must be routed onto the flight that provides 

the correct level of service to the destination, AMC operations were extremely 

complex when the Postal Service employed as many as 55 different air carriers. 

That level of complexity no longer exists, since the number of commercial airlines 

transporting mail has been reduced from 55 to 7, and the amount of mail 

transported by commercial airlines has decreased from 2.9 billion pounds in 2001 

to 368 million pounds in 2007. This volume decrease results from several 

factors. First is the level of airline on-time performance that led the Postal 

Service to explore alternatives, such as the two alternative air freight carriers 

described above which now haul the vast majority of mail transported by air. 

Second, some mail formerly transported by air is now routed on surface highway 

transportation. Third, mail security restrictions enacted in the wake of the 9/11 

terrorist attacks limit the weight and size of individual mail pieces that may be 

transported in the cargo holds of commercial passenger airlines. As a result, 

postal AMCs have experienced drastically reduced tender and receipt 

responsibilities, since almost all mail from a given city subject to air transportation 

is handled by a single air carrier. 

In response to these changes, many AMCs began taking on auxiliary mail 

processing functions, often adding automated mail processing and material 

handling equipment. Essentially, AMCs became processing annexes for their 

local postal Processing & Distribution Centers (P&DCs). Recognizing the 

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skewed cost-benefit ratio of maintaining AMC facilities in high-cost locations, the 

Postal Service began streamlining operations in 2006 by returning non-core AMC 

functions, including distribution and assignment, back to the local P&DCs. As 

non-core functions are transferred back to these processing plants, it has 

become apparent that many AMC facilities occupy floor space well in excess of 

any operational needs and are a highly inefficient use of resources. 

The Postal Service has conducted analyses that identify the AMCs which have 

significant P&DC responsibilities that cannot be relocated. These AMCs have 

been designated for continued operation. All other AMCs have been scheduled 

for closure. In order to minimize disruption, closings are prioritized on the basis 

of scheduled lease expiration dates, available lease termination options and 

other relevant local conditions. 

 c. AMC Closures 

The Postal Service terminated operations at the following 46 AMCs during FYs 

2006-2007: 

 Baltimore MD, Boston MA, Columbia SC, Charlotte NC, Washington DC, 

Greensboro NC, Greenville SC, Dulles VA, Norfolk VA, Raleigh NC, 

Richmond VA, Cincinnati OH, Dayton OH, Pittsburg PA, Louisville KY, 

Grand Rapids MI, St. Louis MO, LaGuardia NY, Albany NY, Buffalo NY, 

Rochester NY, Syracuse NY, Oakland CA, San Diego CA, San Jose CA, 

Santa Ana CA, Birmingham AL, Nashville TN, Jackson MS, Memphis TN, 

Pensacola FL, Albuquerque NM, Austin TX, Little Rock AR, Oklahoma 

City OK, Tulsa OK, Boise ID, Denver CO, Des Moines IA, Wichita KS, 

Kansas City MO, Omaha NE, Portland OR, Phoenix AZ, Reno NV, and 

Tucson AZ. 

In addition, the Postal Service already has terminated operations at the following 

eight AMCs in FY 2008: 

 Sacramento CA, Columbus OH, Detroit MI, Indianapolis IN, Ontario CA, 

West Palm Beach FL, Houston TX and Los Angeles CA. 

In most locations, the tender and receipt functions were consolidated into the 

local P&DC. Where this was not possible, the function was contracted to a 

private sector terminal handling service already present at the airport. All AMC 

facility closings were handled in accordance with the applicable postal collective 

bargaining agreements, with appropriate notification and reassignment of 

personnel to other local facilities. 

Elimination of these facilities has been accomplished while maintaining service at 

record levels for mail transported by air. AMC closures are strictly an internal 

operational issue virtually invisible to mail senders and recipients. In addition to 

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streamlining mail processing and improving efficiency, AMC consolidations result 

in cost advantages for the Postal Service. These include facility and land lease 

cost avoidance, as well as moving underutilized AMC personnel to more 

productive P&DC operations, and the use of existing commercial terminal 

handling service providers. 

The USPS Office of Inspector General (OIG) performed an audit of the closure of 

the St. Louis MO Airport Mail Center and concluded that it “reduced cost and 

improved efficiency without impairing service.” Audit Report -- St. Louis Airport 

Mail Center Outsourcing, Report No. EN-AR-08-002 at 6, USPS OIG (February 

29, 2008).8

 In light of the success achieved, the Postal Service plans to continue 

the program through the remainder of FY 2008. 

Total program savings are expected to be $117 million from the elimination of 

workhours and facility lease expenses. Savings from the AMC closures in 

2006/2007 were $39 million. The Postal Service projects a savings of $57 million 

in 2008 and $21 million in 2009. 

2. Area Mail Processing Consolidations 

 

Streamlining efforts critical to the Network Plan extend beyond air transportation. 

While continuing to improve the consistency of the service it provides, the Postal 

Service has historically taken advantage of opportunities to reduce network 

costs, improve efficiency and eliminate excess capacity at local mail processing 

facilities through operational consolidations. More such consolidations are being 

contemplated as part of the Network Plan. The Postal Service will employ its 

Area Mail Processing (AMP) 9 guidelines to analyze and implement mail 

processing consolidation opportunities, and to measure results. Below, the 

Postal Service describes its AMP review and decision-making process, including 

provisions for the solicitation and consideration of public input. 

a. The Benefits of AMP Consolidation 

On average, the Postal Service accepts and delivers more than 700 million 

pieces of mail each delivery day. Distribution and transportation of these letters, 

parcels, catalogs, and magazines occur across a network of 37,000 Post Office 

units and other retail outlets, and at over 400 mail processing facilities. The mail 

is securely and reliably delivered to 148 million addresses. No other single 

operation in the world comes close to having the level of connectivity that the 

Postal Service has with the households and businesses it serves in the United 

States and its territories. 

 

8 See http://uspsoig.gov/foia_files/EN-AR-08-002.pdf. 9

 An Area Mail Processing consolidation is one that results in all of the outgoing and/or incoming 

mail processing operations of a postal plant being absorbed by one or more nearby facilities. 

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The Postal Service uses industry best practices to increase efficiency, control 

costs, maintain service, support delivery point growth and respond to other 

industry changes. The Postal Service’s ability to transform its operations in the 

face of changing customer needs is not new. In the mid-1950’s, before the 

advent of mechanized mail processing technology, the Postal Service sorted mail 

at over 10,000 Post Office units and other facilities on a nightly basis. Forty 

years ago, mechanized sortation operations were centralized to the point where 

they were performed at a combined 2,000 Post Office units and other mail 

processing facilities. Today, the evolution of automated technology and changes 

in mail entry have allowed the Postal Service to more efficiently consolidate the 

overwhelming bulk of its originating sortation operations away from Post Office 

units and into approximately 400 relatively large mail processing plants. 

Refinement of Postal Service operations is an ongoing process, and results in 

continuous improvements in processing, equipment standardization, productivity, 

service performance, and customer satisfaction. The Postal Service mail 

processing strategy focuses maximizing the use of its automated equipment, 

improving the quality of mail processing, and eliminating excess capacity, while 

minimizing adverse impact on service. 

In recent decades, for the purpose of improving operational efficiency and/or 

service, the Postal Service has employed its AMP guidelines to analyze locally 

generated proposals for the consolidation of all originating and/or destinating 

distribution operations from one facility to another. These procedures have been 

updated recently and are published in the form of USPS Handbook PO-408 Area 

Mail Processing Guidelines (March 2008). 

The benefits of AMP consolidations are that the Postal Service can: 

• take advantage of economies of scale by centralizing mail processing 

operations to better use resources, including space, staffing, processing 

equipment, and transportation 

• take advantage of state-of-the art technologies, so that originating and/or 

destinating mail can be processed more efficiently 

• support network rationalization and reduce redundancy 

• reduce excess capacity or the crowding of operations in limited floor space 

• minimize impact to customer services 

• enhance environmental sustainability by reducing fuel and utility use. 

b. Methods of Identifying AMP Consolidation 

Opportunities 

The process of identifying consolidation opportunities has evolved to include both 

bottom-up and top-down approaches. Combining both AMP approaches allows 

the Postal Service to more astutely identify and pursue viable consolidation 

opportunities and ensure that accountability for results is shared at all levels of 

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postal management. Because of recently implemented improvements to the 

AMP process, standardized analytical tools are now available to identify 

consolidation opportunities, whether they are isolated, locally-generated 

proposals for improved efficiency, or they are identified through computer 

simulation modeling which can suggest potential local consolidation opportunities 

as part of a systemwide network review. Regardless of the source of an AMP 

proposal, the criteria used for judging consolidation opportunities are the same.10

In addition to the evaluation of potential service standard changes that could be 

generated by an operational consolidation, a preliminary capacity analysis is 

performed to determine if the absorbing facility could reasonably accommodate 

the additional workload. Once these criteria have been satisfied, an AMP 

consolidation proposal is analyzed through the process outlined in USPS 

Handbook PO-408. The current guidelines reflect significant improvements 

implemented at the suggestion of the Government Accountability Office and the 

USPS Office of Inspector General. Because these guidelines support a critical 

element of the Network Plan, it is useful to summarize them below. 

c. Overview of the Internal AMP Review Process 

The major events that occur during the AMP process are depicted graphically in 

Exhibit 1, which is followed by a narrative description. 

 

10 It should be noted that not all mail processing transfers are subject to an AMP feasibility study. 

For example, routine minor mail processing shifts in volumes or operations from one facility to 

another that do not fall under the AMP process include the aggregation of automation candidate 

mail (letters, cards, flats, or parcels) for processing at a nearby facility using automated 

equipment, and the centralization of mail processing activities over a weekend or holiday.

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Exhibit 1: Area Mail Processing (AMP) Process 

Initiation

by DM/SPM

End of AMP

Process

DM completes

feasibility study and

submits to AVP

Initiation

by HQ

AMP operates for 2

quarters

AVP forwards

proposal to HQ

AMP operates for

next 2 quarters

Area completes first

PIR (30 days)

Area develops action

plan, if needed

Area & HQ review

AMP feasibility study

DM holds public input

meeting

Public input

consolidated

Request AVP to

conduct study

Notify AVP of

intent to conduct study

 SVP Ops

makes AMP

decision

Stakeholders

notified of decision

Disapproved Approved

Transition period

Stakeholders

notified of decision

Stakeholders

notified 2

months

2

months

6

months

6

months

Up to 6

months

1

month

HQ review (30 days)

Area completes final

PIR 1 month

HQ review 1 month

With the bottom-up AMP approach, the process begins when the postal District 

Manager or Senior Plant Manager notifies the Area Vice President (AVP) of their 

intent to conduct an AMP feasibility study. The AVP informs the Senior Vice 

President (SVP) Operations at Headquarters. With the top-down AMP approach, 

the SVP Operations contacts the AVP about initiating a feasibility study. 

When either one of the approaches is used, communication to external 

stakeholders must occur when there is a clear intent to proceed with an AMP 

feasibility study. The notification of intent to perform the study includes an 

invitation to the public to submit any comments or concerns to a designated 

Postal Service representative. 

Within two months, the feasibility study is conducted, reviewed and, if approved 

by the District Manager, submitted to the AVP along with the required 

documentation. 

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No more than 45 days after submission of the study, the District Manager is 

required to conduct a public input meeting. Fifteen days are provided for the 

public’s submission of additional written comments after this meeting and for the 

District’s summary of the meeting to be completed and forwarded to the AVP. 

After the District Manager’s submission of the study, a 60-day review is 

conducted concurrently by Area and Headquarters management. AMP feasibility 

study worksheets are verified and issues are resolved. Then the study is 

provided to the AVP for consideration. 

Following receipt of public comments and finalized worksheets, the AVP 

determines if the AMP proposal should advance to Headquarters. If the AVP’s 

recommendation is that the AMP consolidation be approved, the AVP must 

submit a signed AMP proposal to the SVP Operations at Headquarters. 

Generally, this step should be completed within two weeks. If the AVP does not 

recommend that the proposed consolidation move forward, the AVP must submit 

an explanation to the SVP Operations for review. 

The Postal Service’s Consumer Advocate at Headquarters also receives a copy 

of the AMP proposal submitted to the SVP Operations. Review by the Consumer 

Advocate is intended to ensure that adequate attention is given to the public 

input during the District and Area reviews before the consideration of the AMP 

proposal by the SVP Operations. 

The SVP Operations takes into account costs and benefits outlined in the AMP 

feasibility study, along with summaries of public input, when making the final 

agency decision to approve or disapprove the proposed consolidation. A 

decision is expected within two weeks of receipt of the proposal. 

Assuming a decision is made to move forward, plans for transportation and 

staffing adjustments are finalized before the selection of an implementation date. 

The AVP identifies an implementation date for the initiation of the consolidation of 

operations that coincides with the first day of a fiscal year quarter. 

Before the implementation of an approved AMP, national-level postal employee 

union and management association officials are notified and local employee 

organizations are briefed, in accordance with current postal policy and collective 

bargaining agreements. 

The Area must conduct two periodic reviews of AMP consolidations that are 

implemented. These post-implementation reviews (PIRs) assess whether 

planned savings, workhours, and levels of service are met. The first PIR covers 

the first and second full fiscal quarters after implementation, and the final PIR 

covers the first four full quarters following implementation. 

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The AMP process is completed once the final PIR has been evaluated by 

Headquarters and feedback is provided to the Area.

The following sections describe in more detail the feasibility study, 

communication plan and the public input process. 

 d. AMP Feasibility Study Criteria 

The general objectives of any AMP feasibility study are to: 

• evaluate service standard impacts for all affected classes of mail 

• consider customer service concerns relevant to a proposed consolidation 

• identify impacts to local postal staffing of both craft and management 

positions 

• analyze postal savings and costs associated with moving mail processing 

operations. 

Before an AMP feasibility study is undertaken, the following potential impacts are 

identified for analysis: 

• changes in service quality, as measured by service performance 

indicators 

• service standard upgrades or downgrades for First-Class Mail and other 

 mail classes 

• changes in collection box pick-up times and retail service availability 

• changes in location and hours for business mail acceptance at postal 

business mail entry units (BMEU) and business mail drop shipment 

• operating plans at the absorbing and consolidated mail processing 

facilities 

• future mail processing equipment deployment and floor space needs 

• potential savings and efficiencies, including utility cost reductions. 

After a preliminary determination that service and/or efficiency may be effectively 

improved with the consolidation of mail processing operations, the District 

Manager and/or the Senior Plant Manager from the absorbing facility inform the 

AVP of their intent to conduct an AMP feasibility study. In turn, the AVP informs 

the SVP Operations at Headquarters that an AMP feasibility study is to be 

prepared. 

After the AMP consolidation proposal is initialized, a feasibility study determines 

whether there is a business case for relocating processing and distribution 

operations from one facility to another. District management must complete their 

study efforts within two months of the notification of intent to conduct the study, 

and incorporate input from management at both the consolidating and absorbing 

facilities. 

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A completed AMP pre-decisional proposal is a feasibility study that has been 

validated by Area and Headquarters functional review teams, supported by the 

AVP, and submitted to the SVP Operations for a decision on the proposed 

operational consolidation. This AMP proposal consists of a summary narrative, 

finalized analytical worksheets, a geographical map of the affected service area, 

and a summary of the public meeting and comments. The completed AMP 

proposal reflects approvals from designated local, District, Area and 

Headquarters management. 

e. Public Communication and Input 

 i. AMP Communications Plan 

Public communication is an integral part of the AMP process. The need for clear, 

consistent, and accurate communications is especially important when informing 

mailers and employees about the initiation of an AMP feasibility study, notifying 

customers about the opportunities to provide input, and disseminating 

appropriate information to customers and employees about final agency 

decisions. 

Accordingly, consistent with the requirements of PAEA § 302(c)(3)(D), the Postal 

Service has developed a detailed AMP Communications Plan which includes 

timelines for the issuance of various communications related to the initiation of a 

specific AMP feasibility study, information on the consolidation proposal and 

public meeting, and the final decision about operational consolidation. The plan 

also includes templates for written correspondence directed to local government 

officials and elected representatives, postal employee unions and associations, 

and business mail customers; press releases for the dissemination of information 

to the general public via local newspapers, as well as television and radio 

broadcast news outlets; postings on the Internet on a special Area Mail 

Processing page at the Postal Service’s public website -- www.usps.com;

11 and 

various electronic and hard-copy communications for the internal dissemination 

of information to postal employees. 

The objectives of the AMP Communications Plan are to effectively convey that 

(1) a potential consolidation of local operations may be analyzed for the purpose 

of determining whether it could improve efficiency and/or service and (2) to 

provide an opportunity for mail senders and recipients in the affected service 

area to provide input regarding potential service changes. 

 

11 Go to http://www.usps.com/all/amp.htm. 

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Communications to the public occur when the Postal Service: 

• declares its intent to undertake a specific AMP feasibility study 

• schedules a public meeting to solicit input within 45 days of an AMP study 

being submitted to an Area VP for consideration 

• makes a final agency decision regarding an AMP proposal12 

• terminates a feasibility study, places it on hold or resumes a 

 previously suspended study. 

Postings at the Area Mail Processing webpage at www.usps.com are updated to 

reflect changes to the progress of the study. 

ii. Public Input Process 

Without specifying the format, PAEA § 302(c)(3)(D) requires an opportunity for 

public input regarding certain proposed consolidations. The Postal Service 

permits interested parties to provide input in two ways, either through oral 

comments at a public meeting or in writing. Following the public meeting, the 

public has 15 days to submit additional written comments to the District Manager, 

Consumer Affairs. Input from the public meeting is summarized and submitted to 

the AVP for consideration. Additional review by the USPS Consumer Advocate 

ensures that adequate attention and resolution is given to the public input at the 

District and Area level prior to final consideration by the SVP Operations. 

Immediately after the announcement of its intent to conduct an AMP feasibility 

study, the Postal Service initiates a comment period and solicits input from the 

public that will be discussed during the subsequent public meeting. At this stage, 

an AMP operational consolidation opportunity has been identified, but its 

feasibility has not been analyzed. Accordingly, the Postal Service is able to 

provide only very general information as a part of this initial solicitation of 

comments. 

When the review of an AMP consolidation opportunity has advanced to the point 

where District management has submitted a feasibility study to the AVP for 

review, a public meeting is scheduled to take place within 45 days. The notice 

inviting the public to that meeting includes a public summary of the AMP study. 

Consistent with PAEA §§ 302(c)(1)(D)(ii) and (c)(3)(A), the Postal Service 

incorporates a public summary description of the AMP consolidation proposal in 

correspondence to local and other elected officials. This summary also is 

 

12 Copies of final agency decision AMP documents, as well copies of post-implementation 

reviews, are provided to national postal employee union and management association 

representatives, subject to the condition that sensitive commercial and personnel data not be 

publicly disclosed. 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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included in press releases the Postal Service distributes to newspaper, television 

and radio news organizations for broadcast to the general public, and in notices 

to BMEU customers. It also is posted on the Internet at the Postal Service’s 

public website -- www.usps.com -- on a page set aside for Area Mail Processing, 

consistent with the spirit of PAEA § 302(c)(3)(D). 

As required by § 302(c)(3)(D)(ii), each AMP public summary narrative highlights 

anticipated changes in the affected service area, including but not limited to retail 

or business mail entry, service standard upgrades or downgrades, collection box 

pickup times, postmarking practices and retail access. The summary also 

includes a description of impacts on postal employees and a projection of 

associated postal cost savings. 

f. Network Plan AMP Consolidation Approach 

The Postal Service plans to take an incremental approach to consolidating 

operations.13 Using both computer modeling and site-specific data under the 

AMP Guidelines, analysis determines if an AMP feasibility study should begin 

and assesses the potential advantages of consolidating local operations. 

 

As is described above, the process from start to finish for an AMP evaluation 

(from initiation of a study to SVP Operations review) is five months. The specific 

impacts on postal costs, postal employees and customer service will be identified 

during the AMP process and communicated in accordance with the Postal 

Service AMP Communications Plan. 

Although the goal is to achieve overall network efficiency, the AMP analytical 

process will be incremental and will involve multiple, simultaneous reviews of 

site-specific operational consolidation opportunities. Until the individual AMP 

 

13 There are approximately 851,000 different origin-destination 3-digit ZIP Code pair combinations 

in the postal network. It is anticipated that the cumulative impact of the various local AMP 

operational consolidations that could be implemented as a part of this Network Plan could result 

in isolated instances in which, on a cumulative basis, an extremely small percentage of ZIP Code 

pairs will experience a First-Class Mail service standard downgrade. For the sake of clarity, it is 

emphasized that an operational consolidation that produces a service standard downgrade is one 

that results in the overnight service standard applicable to a particular 3-digit ZIP Code pair 

changing to a 2-day standard, or a 2-day standard changing to a 3-day standard. The expected 

delivery day, as indicated by the service standard, would change in those hypothetical cases. An 

operational consolidation can result in mail being processed at a different Processing & 

Distribution Center at origin or destination, without a change in the service standard applicable to 

the 3-digit ZIP Code origin-destination pair associated with a mail piece. Local mail processing 

operational changes, whether arising from an operational consolidation, an overwhelming spike in 

mail volume, or some other phenomenon, may result in carrier delivery being later in the day for 

some customers on particular delivery routes. Where delivery by a guaranteed time of day is not 

part of a mail product offering, as is the case with First-Class Mail, the Postal Service does not 

consider such a shift in delivery time during the day to constitute a change in the service, as 

measured against the applicable service standard. 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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studies are completed and approved, the Postal Service is unable to project the 

potential cost savings that AMP consolidations, as a whole, may generate as a 

component of the Network Plan. The Postal Service will provide such 

information, on an annual basis in accordance with PAEA § 302(c)(4). 

3. BULK MAIL CENTER TRANSFORMATION

The final major component of the Network Plan is the transformation of the 

Postal Service’s Bulk Mail Center (BMC) network. The following section 

describes a plan currently under consideration to transform BMCs into state-ofthe-art processing facilities that meet future postal needs. 

a. Evolution of the BMC Network

The Postal Service currently operates a national network of 21 BMCs. These 

facilities primarily support the distribution and transportation of Standard Mail, 

Periodicals, and Package Services. The BMCs were built and began operations 

in the 1970’s. BMCs process container handlings, not single-piece sortation. 

Mail is processed through manual and mechanized operations, and then loaded 

onto trailers for surface transportation. Originally, because nearly all customer 

mail volume was entered at origin locations, BMC facility and transportation 

utilization was very efficient. 

With the introduction of mail preparation and transportation discounts, mailers 

began bypassing origin BMCs, presorting mail and entering it downstream at 

destination postal facilities. That trend has accelerated over the last several 

years. In FY 2007, 52 percent of Parcel Post was dropped at delivery units and 

45 percent of Standard Mail was dropped at destination mail processing plants, 

thus bypassing BMC processing completely. Consequently, BMCs have excess 

distribution capacity. Some have reduced operations from 24 to 16 hours a day, 

and have closed some weekend operations. 

BMC facilities are strategically situated near major metropolitan areas and 

transportation centers. Therefore, they are valuable assets that provide excellent 

logistical reach for various mail product lines. However, because of increased 

mailer sortation and downstream drop shipments, these postal assets are 

currently underutilized. This factor, in combination with increased highway 

contract expenses and an aging postal distribution infrastructure, has prompted 

an intense evaluation of the BMC network to determine how it can best support 

future postal operations. 

Simultaneously, the Postal Service is considering the Phase II deployment of 

Flats Sequencing System (FSS) equipment. At destination, FSS equipment 

employs automation and reads barcodes to sort flat-shaped mail pieces to carrier 

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routes and in walk sequence. In order to realize the benefits of future FSS 

deployments, significant capital investment will be required to secure sufficient 

floor space in postal facilities to locate this large piece of equipment. 

In addition to the high capital cost facing the Postal Service, the majority of the 

products that move through the current BMC network are market-dominant mail 

products subject to the new price cap regime. With an aging infrastructure, 

inefficient processing and transportation methods, rising energy prices, and 

declining network volume, it will be increasingly difficult for these products to 

cover their costs moving forward, let alone provide a positive contribution to the 

financial bottom line of the Postal Service for the benefit of the American mailing 

public. 

Consequently, having engaged in extensive consultations with affected employee 

collective bargaining units, the Postal Service is considering the pursuit of an 

outsourcing solution – combining enhanced mail distribution, product visibility, 

and advanced transportation management techniques – for some of the existing 

BMC workload. Outsourcing may provide the Postal Service with the best 

opportunity to improve distribution and transportation efficiencies, and to add 

superior product visibility without major capital investments. 

This potential solution would move the distribution and transportation of this mail 

volume into a contractor’s transportation and processing network before it is 

ultimately delivered by the Postal Service, thus freeing up the BMCs for other 

postal operations. Outsourcing may also provide an opportunity to realize 

significant cost avoidances in support of future FSS deployments by permitting 

existing BMC facilities to house this new equipment. This outcome has the 

potential to result in a more cost-effective and service-responsive Time-Definite 

Surface Network for postal customers. It also is anticipated that outsourcing may 

result in a more consistent and predictable postal mail processing cost 

environment. 

b. Time-Definite Surface Network 

The operating concept under consideration for the Time-Definite Surface 

Network (TDSN) program is for the Postal Service to outsource the origin and 

destination distribution, as well as the long-haul surface transportation for all 

origin-entered Package Services mail, Standard Mail, sacks, trays/tubs, and 

pallets. The Postal Service may also recommend outsourcing the destination 

distribution for destination BMC entry Package Services and Standard Parcels 

only. 

In addition to the distribution and transportation requirements, TDSN suppliers 

would be required to provide detailed mail tracking information for all products 

moving in their networks and would be held to strict service performance goals. 

These contract performance goals would be aligned with Postal Service service 

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standards and targets, the compliance with which is monitored by the Postal 

Regulatory Commission. 

The Postal Service anticipates that an optimal network design would include the 

integration of its products with a supplier’s products in a Shared Network 

concept. The Postal Service anticipates the following benefits from any potential 

Time-Definite Surface Network: 

• a reduction in total network surface miles through floor-loading and 

tandem trailers, and by leveraging shared resources (e.g., empty backhauls) 

• a decrease in the number of hours required to complete processing and 

distribution 

• better service for customers, as a result of the reduced transportation and 

distribution cycle time 

• advanced information technology systems, including the ability to track 

each handling unit before, during, and at conclusion of all transportation 

and distribution processes, for both service measurement and operational 

diagnostics 

• enhanced environmental sustainability through reductions in fuel 

consumption, as well as highway miles driven. 

A core component of the proposed TDSN program is the future use of the space 

made available in the current BMCs. If mail volumes currently processed in 

BMCs were to migrate to a Shared Network, existing BMC equipment (i.e., 

Primary and Secondary Parcel Sorters and Sack Sorters) could be removed to 

create space for other operations. To realize the most benefit of utilizing the 

vacated space, the Postal Service is evaluating the relocation of various mail 

processing operations, which when combined, yield both operational savings as 

well as capital cost avoidance. The operations to be evaluated on a case-bycase basis include, but are not limited to: 

• future Flat Sequencing System (FSS) deployment requirements 

• Processing & Distribution Center (P&DC) replacement opportunities 

• consolidation of bundle distribution 

• consolidation of leased annex or other operations. 

c. Program Status 

This Network Plan represents the culmination of realignment analysis, the origins 

of which can be traced to 2001, when the Postal Service initiated the Network 

Integration and Alignment (NIA) program that later became the Evolutionary 

Network Development (END) program. The backbone of the proposed END 

network included a number of Regional Distribution Centers (RDCs), which were 

expected to perform bulk processing operations, and act as Surface Transfer 

Centers and mailer entry points. However, due to the impacts of the passage of 

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the PAEA in late 2006, the approval of the Phase I Flat Sequencing Systems 

(FSS), the 2007 postal rate changes which included significant shape-based 

price differentials, and the significant amount of capital investment required to 

implement the END network concept, the Postal Service determined that the 

RDC concept would not generate the benefits originally anticipated. In addition, 

the Postal Service received negative feedback from commercial customers 

regarding potential plans to require drop shipments at approximately 70 facilities 

rather than the current 28. Accordingly, in early 2007, the END program was 

stopped and the Postal Service began to consider an alternative strategy.14 By 

mid-2007, the concept of an outsourced Time-Definite Surface Network began to 

emerge. 

In July 2007, the Postal Service issued a Request for Information (RFI), thereby 

conducting market research which could identify interested service providers with 

the capability to design and manage a time-definite distribution and 

transportation network. The primary objectives of the RFI were to: 

 

• receive feedback on its strategy and approach for implementing a timedefinite surface network, including potential alternative turnkey solutions 

based on industry and commercial best practices 

• substantiate the extent to which capable suppliers can provide the 

 services and solutions to design and manage a network of the size, scope 

 and complexity envisioned 

• obtain rough order-of-magnitude cost information to assist with postal 

 planning and budgeting. 

The Postal Service evaluated all of the industry responses in late 2007. 

At the same time, the Postal Service has been developing an operating concept 

which will optimize the benefits of not only the Time-Definite Surface Network, 

but also the future use of its BMCs. In September 2007, the Postal Service 

began discussing the program in detail with unions that represent potentially 

affected postal employees. As required by applicable collective bargaining 

agreements, the Postal Service will give due consideration to their views during 

evaluation. If its network analysis suggests that the Time-Definite Surface 

Network is a viable alternative, the Postal Service could issue a Request for 

Proposal (RFP), which ultimately could result in TDSN contracts. While 

decisions as to whether to proceed with formal issuance of the RFP remain 

under consideration, work towards completion of a RFP is well underway. 

Given the status of the program, it is premature to estimate potential costs, 

savings, labor impacts and timelines. Should an RFP be issued, its evaluation 

 

14 Thus, in accordance with PAEA § 302(b)(3), the Postal Service emphasizes that the RDCbased network plan referenced at page 35 of the USPS Strategic Transformation Plan 2006-2010

(September 2005) is no longer being pursued. 

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criteria would focus on identifying the best solution which combines enhanced 

mail distribution, product visibility, and advanced transportation management 

techniques resulting in a cost-effective, service-responsive network. 

 

C. Integration of Network Initiatives

As demonstrated above, the Postal Service is planning to streamline its 

distribution and transportation networks to achieve an efficient, flexible, 

environmentally sound system that improves the consistency of service at the 

lowest combined cost for the Postal Service and its customers. Although the 

plan has several components that focus on different segments of the network, 

the overall impacts and execution of each initiative are tightly integrated. 

Completion of the Airport Mail Center closures illustrates the importance of 

understanding other network initiatives. For example, the first step in the process 

was to remove the non-core operations from the AMCs and return them to the 

Processing & Distribution Centers. If operations were returned to a P&DC that 

was going to be subjected to the Area Mail Processing guidelines for 

consolidation analysis, these particular operations potentially would be relocated 

twice, increasing cost, unnecessary environmental impacts, and potentially 

adversely impacting service. Similarly, assuming the removal of existing 

equipment in Bulk Mail Centers, the availability of BMC floorspace for other 

operations may affect surrounding Processing & Distribution Centers. If Flats 

Sequencing Systems and bundle sortation equipment are deployed to BMCs, the 

P&DCs will experience a reduction in flat and bundle processing. This would 

create opportunities for AMP consolidations at those P&DCs which may have 

previously been deemed infeasible due to insufficient capacity at potential 

absorbing facilities. The integration of all of these potential initiatives is a 

complex undertaking for which Headquarters and Area Operations personnel are 

prepared. 

D. Regulatory Concerns 

PAEA § 302(c)(4)(B)(iv) directs the Postal Service to annually identify to 

Congress any statutory or regulatory obstacles that have prevented or will 

prevent or hinder the Postal Service from taking action to realign or consolidate 

facilities. In the spirit of that section, the Postal Service acknowledges the 

existence of current Congressionally-imposed delays of potential AMP 

consolidations. The Consolidated Appropriations Act, 2008, Public Law 110-161, 

121 Stat. 1844 (December 26, 2007), currently restricts the Postal Service from 

implementing several AMP proposals, with approximately $14 million in 

cumulative annual savings, in several locations. 

The Joint Explanatory Statement accompanying the measure directs the Postal 

Service not to initiate implementation of these AMP consolidations until the 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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Government Accountability Office evaluates both the recently revised version of 

the USPS Handbook PO-408 Area Mail Processing Guidelines (March 2008) and 

this Network Plan. The Postal Service looks forward to the completion of the 

GAO’s current Handbook PO-408 review, so that it can consider any constructive 

suggestions and, as soon as possible, reap the operational and cost benefits 

expected from these potential consolidations. Likewise, the Postal Service is 

hopeful that the upcoming GAO review of its Network Plan can be completed 

without causing a delay in its implementation. The Postal Service will continue to 

work with Congress to eliminate barriers to the pursuit of the goals of PAEA §302 

and this Network Plan. 

As Congress has recognized in PAEA § 302(c)(1)(C), network consolidation 

decisions must be made by postal managers who, by virtue of their knowledge 

and experience, are uniquely qualified to make them. The long-term viability of 

the Postal Service and thus, the general interests of the mailing public, are not 

served -- nor is the Postal Service able to satisfy the § 302(c)(1)(D) mandate that 

it act expeditiously – when unnecessary barriers to effective and timely 

implementation of critical decisions are imposed. 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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IV. WORKFORCE RATIONALIZATION &

EMPLOYEE IMPACT POLICIES 

The United States Postal Service regards its employees as its most valuable 

asset. It also recognizes the advantages of having a diverse workforce that is 

able to address the needs of over 300 million customers throughout the United 

States and its territories. The Postal Service currently is faced with significant 

changes in the marketplace during a period of regulatory transformation. Now 

more than ever, the Postal Service appreciates the importance of placing the 

right people in the right jobs, and ensuring that employees are aware of 

opportunities for leadership development and career advancement. 

A. Long-Term Workforce Vision and Complement Planning 

Advances in mail processing technology, increased employee productivity and 

management improvements have required the Postal Service to constantly 

reassess its personnel needs. Because its workforce is the largest source of 

cost, the Postal Service has developed a variety of human resource 

management tools to help local managers more reliably determine the optimal 

staffing mix necessary to improve productivity and to meet customer service 

expectations. The Postal Service has improved efficiency while reducing its 

career employee complement by over 100,000 positions since FY 2000, with 

minimal impact on its employees. In the face of declining mail volumes and 

recent changes in the mail mix, effective workforce complement planning is an 

even more important objective under the newly established price cap regime for 

annual rate adjustments. 

Complement planning is a business process that focuses on transitioning the 

workforce to meet operating changes, while minimizing disruptions to customer 

service. The Postal Service has developed and implemented national 

complement planning, tracking and management systems with standardized 

procedures and processes. Modeling tools allow field managers to develop 

budget-based complement plans. Actionable data give managers opportunities 

to monitor staffing and workhours by day of the week, operational group and 

operation. A recently-developed web-based application enables and tracks 

employee requests for voluntary transfers to any other postal facility throughout 

the country. Another web-based tool assists management in effectively 

addressing change events that have an impact on the workforce. Attrition reports 

facilitate adjustments to complement plans and replacement decisions. The 

efficient use of temporary and flexible employees and voluntary employee 

reassignments are additional methods of aligning employee complement and 

workload. 

 

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B. Employee Impact Policies 

Implementation of the different components of the Network Plan described in the 

preceding chapter will have impacts on operations and personnel in facilities in 

various locations in the postal network. It is premature to project what the 

personnel or cost impacts may be for locations where the necessary operational 

consolidation analysis has yet to be performed, or for the network as a whole. 

The Postal Service has long-standing policies and collective bargaining 

agreements that address the treatment of employees who accept, process, 

transport and/or deliver mail. Also, the Postal Service consults with associations 

that represent the interests of its non-bargaining management and supervisory 

employees. The Postal Service is acutely aware of the potential disruption that 

the automation of mail processing functions, the closing of facilities, the 

consolidation of operations, and the restructuring of administrative units can have 

on its employees. Accordingly, it has developed communications plans that 

explain the necessity of change and that disseminate vital information well in 

advance of the effective dates of personnel changes. 

The Postal Service has long-standing procedures in place to minimize employee 

impact and potential disruption resulting from organization change, and to keep 

any such impacts site-specific and event-driven. These procedures, as a first 

step, explore the possibility of internally reassigning career employees affected 

by an organizational change. Should the implementation of the Network Plan 

make it necessary to apply these processes, all Postal Service career employee 

personnel actions will follow a general sequential escalation of impact and will 

comply with applicable rules and regulations, including Veterans’ Preference 

laws. 

 1. Bargaining Unit Employees 

As augmented by Postal Service policies, collective bargaining 

agreements between the Postal Service and the various unions contain 

provisions governing the treatment of bargaining unit employees impacted 

by organizational changes. These agreements vary by craft and include 

some or all of the following provisions. 

a. No Layoff/No Reduction In Force (RIF) 

Provisions 

These provisions prohibit the involuntary separation of most employees 

due to organizational changes. Employees who are not now covered by 

these provisions gain their protection in the future when they meet 

necessary conditions. 

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b. Reassignment And Saved Rate/Protected 

Rate Provisions 

Reassignment provisions specify the procedure for reassigning employees 

to vacant positions within or outside their facilities due to organizational 

changes. The saved rate/protected rate provisions (as augmented by 

Postal Service policies) specify the terms of grade/wage rate protection 

afforded to eligible employees who are involuntarily changed to lower-level 

positions due to organizational changes. 

c. Recall Rights Provisions 

Eligible employees who are involuntarily separated due to organizational 

changes are placed and remain on a recall list within their seniority unit for 

up to two years. 

d. Voluntary Early Retirement Provisions 

Under these provisions, the Postal Service requests authority from the 

Office of Personnel Management (OPM) to offer eligible impacted 

employees opportunities to apply for voluntary early retirement. It is the 

Postal Service’s policy to request such voluntary early retirement authority 

from OPM even for impacted employees covered by collective bargaining 

agreements that do not contain voluntary early retirement provisions. 

 e. Severance Pay Provisions 

Under these provisions, as augmented by Postal Service policies, 

qualified employees who are involuntarily separated due to organizational 

changes, and who are not eligible to apply for discontinued service 

retirement or optional retirement, receive severance pay. 

 2. Non-Bargaining Employees 

When there is a potential that one or more non-bargaining employees will be 

involuntarily separated and/or changed to lower-level positions due to 

organizational changes in a facility or organization, the Postal Service uses 

various tools to attempt to avoid or minimize those involuntary separations and/or 

changes. In most cases, the Postal Service’s use of the tools outlined below 

results in most, if not all, impacted employees in a facility or organization 

avoiding involuntary separations or changes to lower-level positions. These tools 

Cited 

include offering impacted employees the following options. 

in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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a. Voluntary Promotion-ReassignmentDowngrade Opportunities and Grade/Salary 

Protection 

The Postal Service offers impacted employees opportunities to voluntarily 

apply for vacant positions (at higher levels, the same levels, and/or lower 

levels than their former positions) within and/or outside their facilities or 

organizations. This may include restricting the candidate pool for vacant 

positions in the relevant facility or organization to impacted employees. 

Eligible employees who voluntarily accept lower-level non-bargaining 

positions due to organizational changes are provided with grade/salary 

protection. 

b. Voluntary Early Retirement Opportunities 

The Postal Service requests authority from OPM to offer eligible impacted 

employees opportunities to apply for voluntary early retirement. This 

authority may be requested for employees in positions in the impacted 

facility or organization, or in another facility or organization not impacted 

by the organizational changes at issue, but which could provide 

assignment opportunities for impacted employees. 

 c. Directed Reassignments 

The Postal Service may make involuntary assignments of impacted 

employees to vacant positions in another facility or organization that are 

the same as their former positions. Most directed reassignments are 

within the same local commuting area as the impacted employee’s former 

facility or organization. 

 

Eligible employees who are involuntarily changed to lower-level positions due to 

organizational changes are provided with grade/salary protection. 

Eligible employees who are involuntarily separated due to organizational 

changes may request that their names be placed and remain on a reinstatement 

list for up to two years, during which time they are given priority consideration for 

certain positions. 

Qualified employees who are involuntarily separated due to organizational 

changes, and who are not eligible to apply for discontinued service retirement or 

optional retirement, receive severance pay. 

 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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C. Conclusion 

In fulfillment of its obligation under 39 U.S.C. § 1001(e)(4) “to maintain the 

efficiency of the operations entrusted to it[,]” the Postal Service approaches the 

task of workforce reductions with a high degree of sensitivity to its employees. At 

the same time, the Postal Service recognizes the interests of its customers who 

generate mail and who often have access to private-sector alternatives to postal 

products and services. Over the past decade, the Postal Service has reduced its 

employee complement largely through attrition, but has used the various tools 

described above as necessary on a site-specific basis. 

The Area Mail Processing consolidations and proposed Bulk Mail Center network 

reconfiguration will involve numerous site-specific employee impact 

determinations which cannot be quantified until the changes proposed for 

particular facilities have been identified and thoroughly analyzed. The Postal 

Service considers that, for purposes of its Network Plan, it has sufficient flexibility 

with which to make the workforce changes that may be necessary. To the extent 

that implementation of the plan requires the accomplishment of workforce 

reductions more expeditiously than can be achieved through attrition, the Postal 

Service’s vision is to use its available complement management options in a 

manner that respects its employees concerns and places a high priority on 

remaining competitive in the marketplace. 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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V. ALTERNATE RETAIL OPTIONS 

PAEA § 302(d) requires the Postal Service to describe its plans to expand and 

market retail customer access to its services through channels other than 

traditional Post Office locations. As the Postal Service adjusts to the financial 

and cost-containment challenges that arise under the newly enacted price cap 

regime, it is increasingly important that it develop and promote efficient and costeffective methods of providing retail customers access to products and services. 

The Postal Service manages the most extensive retail operation in the country – 

over 37,000 Post Office locations, stations and branches, as well as an additional 

63,000 alternate retail options – making it quick, easy, and convenient for 

customers to conduct a variety of transactions. The Postal Service serves more 

than 9 million customers daily throughout its retail network. These transactions 

generate approximately $19 billion in annual receipts through the sale of postal 

products and services, the purchase of postage stamps, packaging supplies, 

other postal-related items, as well as passport application services. 

The Postal Service is committed to continuously improving the quality and 

functionality of its retail network, with a focus on providing customer 

convenience. The Postal Service offers traditional “brick-and-mortar” retail 

outlets and a variety of easy-to-use alternate retail options close to where 

customers live, work and shop. Future retail network initiatives will be developed 

based on market research and an assessment of customer needs, as well as the 

availability of new alternatives and technologies that enhance customer access. 

Advertising and marketing campaigns will be aligned to inform customers of 

expanded and new alternate retail access solutions. 

Below, the Postal Service generally describes the mix of alternate postal retail 

channels currently available, including those listed in PAEA § 302(d)(5). As will 

be observed below, some are either being expanded or phased out, while others 

are currently being market tested for potential deployment. 

A. www.usps.com 

The Postal Service’s public website -- www.usps.com -- tallied nearly 387 million 

visits in FY 2007. Approximately 232 million were from self-described personal 

users. Surveys indicate that 85 percent of personal users and 78 percent of 

business users consider visiting the website to conduct transactions they 

routinely would perform at a Post Office unit. 

Initially launched in 1997, www.usps.com now has more than 20 online 

applications and thousands of pages of useful information. Today’s online 

household and/or small business postal customers expect online access to as 

many products and as much information as is provided in post offices, with 

essentially the same quality of service. Accordingly, the website serves as a vital 

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extension of the Postal Service’s mainline retail operations. Today, the tasks that 

household and small business customers can perform and the services they can 

obtain at the website include: 

• finding ZIP Codes 

• calculating postage 

• printing shipping labels – with or without postage 

• scheduling carrier pickup 

• tracking packages and confirming delivery 

• locating post offices 

• ordering shipping supplies 

• purchasing stamps and philatelic items 

• filing change-of-address or mail forwarding notices 

• filing requests for a temporary hold on mail delivery 

• requesting redelivery of missed packages or other mail pieces. 

As the Postal Service, and use of the Internet, evolve, so will www.usps.com. 

The website is expected to continue to drive volume growth and increase postal 

revenue, create future opportunities to support new product and service 

offerings, and reduce costs. 

B. USPS Approved Shippers 

The USPS Approved Shipper concept was created in 2005 to help the Postal 

Service become more competitive in the retail package market. Under this 

program, the Postal Service executes contracts with existing commercial 

enterprises that are in the business of tendering retail parcels to the Postal 

Service or its competitors. Enterprises which become USPS Approved Shippers 

sign a licensing agreement with the Postal Service and are authorized to display 

postal signage advertising postal products and services. They are trained to 

apply postal aviation security and hazardous materials guidelines in accepting 

letters and packages, before tendering them on behalf of their customers to the 

Postal Service. These retailers are not compensated by the Postal Service; 

however, they do charge their customers fees for the services they provide. 

The USPS Approved Shipper initiative increases postal package volume growth, 

improves ease of access to postal services, and promotes the USPS brand to 

customers, without adding any significant permanent postal infrastructure costs. 

The program has grown rapidly, and currently includes over 2,000 participating 

retail locations. 

C. Contract Postal Units 

Contract Postal Units (CPUs) are located inside private sector retail 

establishments and are operated by each retailer’s employees. CPUs provide 

postal products and services to communities that are remotely located, where 

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populations fluctuate substantially on a seasonal basis, where traditional post 

offices are either not available or the nearest ones are overburdened. By 

creating alternate access points for customers, the CPU program helps the 

Postal Service to retain and/or increase its market share for certain products, 

reduce operational costs, and improve customer satisfaction. There are 

approximately 4,100 CPUs across the country. As local circumstances warrant, 

the Postal Service will explore the costs and benefits of CPU expansion. 

D. Post Office Express 

The Postal Service currently is field testing the Post Office Express (POE) retail 

concept in 16 locations around the country. A Post Office Express operates as a 

small Post Office unit located within a private sector commercial retail 

establishment – typically a large supermarket. It differs from a CPU in that it is 

staffed by postal employees, rather than the retailer’s employees. Most of the 

test units are open seven days a week, with evening and weekend hours that 

reflect local retail shopping patterns. As opportunities are identified, additional 

POEs may be added to the postal retail network. 

E. Retail Facilities with Overhead Costs Shared by Other 

Government Agencies 

The Postal Service operates Post Office units in nearly 170 Federal buildings 

managed by the General Services Administration (GSA). Many of these 

buildings have had a postal retail presence for half a century or more. As long as 

the location of Post Office units in these facilities can result in effective service to 

the mailing public in a manner that is economical and consistent with applicable 

postal retail policies, the location of Post Office units in GSA buildings will remain 

a viable option. 

At over 180 military installations throughout the United States and its territories, 

the Postal Service operates Post Office units in buildings provided by the military. 

The Postal Service assumes responsibility for the payment of utilities. These 

facilities provide access to postal services for military personnel and their families 

who otherwise may have limited access to Post Office units located in civilian 

communities. The availability and location of these retail outlets is subject to the 

needs of these military installations. 

F. Stamps on Consignment 

The long-standing Stamps on Consignment program allows customers to 

purchase postage stamps at banks, supermarkets, wholesale clubs, convenience 

stores and drug stores. Though paying full value to the Postal Service, retailers 

sell postage stamps to their customers either at or below face value as an 

additional incentive for customers to frequent their establishments. Stamps on 

Consignment reduces demand for postal window services from customers who 

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only need to purchase stamps, and allows postal customers to purchase stamps 

while banking, shopping or picking up prescriptions. The number of participating 

private sector retail establishments has grown to approximately 50,000. The 

Postal Service intends to continue to explore additional opportunities to expand 

this alternate channel. 

G. Stamps by Mail 

The Stamps by Mail program offers customers the ability to easily place a mail 

order for stamps, postal cards, and stamped envelopes through a Postal Service 

brochure. Customers may obtain the brochures and order forms at post offices 

or receive them through the mail. Completed order forms are mailed or 

otherwise transmitted to postal fulfillment centers, where orders are filled and the 

requested postal products are mailed to the purchaser. 

H. Postal Carrier Retail Transactions 

Known as “post offices on wheels”, Postal Service rural letter carriers make it 

possible for customers on their routes to complete a wide range of postal retail 

transactions without having to travel to a post office. There are approximately 

77,000 rural routes that serve more than 38 million addresses six days a week. 

Rural carriers sell stamps, accept packages, sell Postal Money Orders, and other 

special services such as Certified Mail, Registered Mail, Delivery Confirmation, 

and Signature Confirmation. These services may be obtained from the carrier by 

leaving a note in the mailbox, along with the appropriate payment. The carrier will 

provide the services and leave a customer receipt in the mailbox. 

Carrier Pick-up service allows customers needing to ship Express Mail, Priority 

Mail, or international packages to request that their packages be picked up when 

their mail is delivered by their regular Postal Service carrier. By preparing 

packages with postage-paid mailing labels created via www.usps.com, many 

customers can avoid a trip to the post office. There is no additional fee for this 

service, and any number of packages can be picked up at one time. Pick-ups 

can be scheduled up to three months in advance through www.usps.com. 

Carrier Pick-up service began in 2004 and has grown exponentially over the 

years. In FY 2007, there were approximately 4.2 million requests for the service 

and over 40 millions packages were picked up. 

I. Automated Postal Centers 

The Automated Postal Center (APC) is a state-of-the-art self-service kiosk 

designed to offer retail customers a wide range of postal products, services, and 

information. There are approximately 2,500 APCs deployed in post offices 

throughout the country. In many locations, customers enjoy the convenience and 

reliability of 24-hour access, seven days a week. APCs enhance access to a 

variety of postal products, services and transactions, such as: 

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• weighing and rating letters, flats and parcels up to 70 pounds 

• dispensing postage in any denomination for Express Mail, Priority Mail, 

First-Class Mail, international mail, Parcel Post and selected special 

services 

• providing information regarding different mail products or special services 

• printing Express Mail forms 

• providing ZIP Code look-up 

• providing the option to purchase Delivery Confirmation, Signature 

 Confirmation, Insurance, Certified Mail, and Return Receipt services. 

J. Vending Machines 

As postage stamp vending machines become outdated and obsolete, they are 

being phased out. Vending machine maintenance, including the cost of 

obtaining, warehousing and distributing spare parts, has become prohibitive. 

Changes in United States currency that are necessary to combat counterfeiting 

schemes require the application of additional software upgrades to vending 

machine bill validators. In addition, the Presidential $1 Coin Act of 2005, Public 

Law 109-145, 119 Stat. 2664 (December 22, 2005) requires all vending 

machines on Federal property to accept and dispense dollar coins. Upgrading 

the hardware on vending machines that do not comply with this requirement is 

not cost-effective. The cost associated with packaging stamps for sale in the 

vending machines continues to escalate. Over time, the vending stamp channel 

has evolved into the most expensive of the alternate stamp purchasing channels. 

The advent of Automated Postal Centers and the growing popularity of the 

various other retail options described above have led the Postal Service to 

beginning phasing out its vending machines. At the same time, the Postal 

Service is currently researching the feasibility of a Print-on-Demand Postage 

kiosk, which would allow customers to purchase stamps via automated 

equipment that accepts cash, as well as credit/debit cards. 

Accordingly, in 2007, the Postal Service initiated a four-year plan for the 

retirement of its current vending fleet. Machines in locations with the lowest 

revenue were the first priority, followed by machines not in compliance with 

Public Law 109-145. In 2009 and 2010, machines will be removed on the basis 

of lowest revenue until all have been retired. As machines are removed, critical 

parts will be harvested in order to keep remaining machines in working order until 

they are removed. 

In order to minimize any adverse customer impact caused by vending machine 

removal, the Postal Service has developed a communications plan. Signs have 

been created for display in post office lobbies during the removal process to help 

customers understand alternate postage purchase options. Information has 

been prepared for dissemination to local newspapers, to help spread public 

awareness. Retail employee training has been undertaken to ensure that postal 

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window clerks can readily inform customers of available options. Available 

information indicates that Postal Service efforts so far have been successful -- 

the sale of stamps at the retail window and vending machines has decreased, 

while stamp sales at other alternate access locations have increased. 

K. Postage Meters 

Postage meters have been an important alternate postage access channel for 

customers for over 80 years. Approximately 1.6 million customers, primarily 

businesses and other institutions, use postage meters and generate over $18 

billion in postage revenue annually. 

The most dramatic change in postage meters since their introduction is the 

development of Information-Based Indicia (IBI) meters. IBI meters produce 

postage indicia that have information embedded in a two-dimensional barcode in 

combination with human readable information. The embedded data make each 

IBI unique; this attribute allows the Postal Service to detect duplicates in the 

mailstream as they are read by automated mail processing equipment. In 

addition, IBI meters contain a Postal Security Device that is certified to meet 

Federal Information Processing Standards by a laboratory approved by the 

National Institute of Standards and Technology. 

Postage meters are offered to customers by private vendors that have systems 

and products approved by the Postal Service. These vendors develop products 

and submit them to the Postal Service for testing, evaluation and approval. The 

Postal Service evaluates these products for operational stability, revenue 

security, and their ability to extend the accessibility and convenience of postal 

products and services. Once approved, the meters are offered by the vendor to 

postal customers under lease agreements. 

IBI meters now account for nearly 60 percent of all postal meters in use.15 The 

Postal Service intends to continue encouraging a natural migration of customers 

and the industry to IBI meters in a variety of ways, including the development of 

products and services that take advantage of the information-rich capability of the 

IBI barcode to add value to metered mail for customers. 

L. PC Postage 

PC Postage allows customers to print evidence of postage payment for all postal 

products and services (with the exception of Periodicals Mail) using personal 

 

15 The Postal Service intends to complete its long-standing Meter Decertification Plan, which 

requires the removal of the remaining letter press meters from the market by December 31, 2008. 

The decertification of letter press postage meters is in response to a GAO determination that 

such meters are susceptible to fraud. 

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computers and printers in offices and homes, twenty-four hours a day, seven 

days a week. Using a credit card, customers can purchase postage indicia via 

the Internet from an approved PC Postage provider. Certain PC Postage 

products have evolved into package shipping solutions with the integration of 

electronic Delivery Confirmation, Express Mail and United States Customs forms. 

Currently, several implementations of PC Postage technology provide postal 

small business customers with convenient access to postage indicia: 

• Commercial PC Postage solutions - Commercial vendors approved by the 

Postal Service market PC Postage services directly to customers. 

• Click-N-Ship - Through a contract with an approved vendor, the Postal 

Service makes PC Postage technology available at www.usps.com to 

mailers of Package Services pieces. Customers who access PC Postage 

in this manner tend to be low-volume household and small-business 

mailers who cannot be served in a cost-effective manner directly by 

commercial PC Postage providers. 

• Partnerships - The Postal Service has partnered with a major Internet 

auction and sales website and an approved commercial PC Postage 

vendor to make PC Postage payment available to merchandise shippers 

who operate through that website. The Postal Service will continue to 

explore additional partnerships to integrate PC Postage technology into 

other on-line trading, auction, and retail sites with high-volume package 

 shippers. 

• Customized Postage - Customized Postage uses PC Postage technology 

to allow customers, including households and small businesses, to order 

postage indicia that include a personalized image. The indicia can be 

affixed to mail pieces in the same manner as postage stamps. 

Customized Postage is currently being offered by commercial PC Postage 

providers or their partners under a market test. 

 

PC Postage has increased the attractiveness of Postal Service products and 

services by providing online solutions to customers similar to those offered by 

postal competitors. Some PC Postage products allow shipping customers to 

compare prices among competitors. In addition, because PC Postage 

technology includes an electronic Delivery Confirmation capability and the use of 

an Information Based Indicia (IBI), the products contribute to mailstream 

intelligence. 

Going forward, the Postal Service plans to increase the functionality and 

availability of all PC Postage implementations. 

 

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M. Conclusion 

Customer service is at the heart of the United States Postal Service brand, and is 

the key to increased competitiveness. Evolving customer needs, shaped by the 

Internet and a new generation of customers, are redefining expectations for 

service and convenience. The Postal Service is committed to continuously 

improving the quality and functionality of its retail network, with a focus on 

improving customer service and convenience. Accordingly, the Postal Service 

offers a variety of alternate channels through which customers can access core 

postal services, conduct a variety of postal transactions, and obtain product 

information – either at home, while out shopping, or via the Internet. New retail 

channels are under development that require less capital expenditure and 

minimize the incremental cost of providing service. The Postal Service is poised 

to meet the needs of the general mailing public and will continue to explore future 

options that make being a postal customer easier and more convenient than ever 

before. 

 

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NETWORK PLAN CONCLUSION 

The Postal Service has developed this network plan after consultations with the 

Postal Regulatory Commission that were initiated in February 2008. As always, 

the Postal Service appreciates the opinions and insights offered by the 

Commissioners and their technical staff. Ultimately, however, the responsibility 

of determining the nature of future mail processing and transportation networks, 

postal personnel policies, and the manner in which alternate retail options are 

promoted, rests with postal management. The network plan explained above 

reflects various major initiatives that are expected to result in better and more 

efficient operations and customer service. As the Postal Service strives to 

achieve its goal of continuous improvement, it will rely on a comprehensive set of 

market-dominant product service measurement systems that will provide the 

Commission with a basis for fulfilling its responsibilities under PAEA § 

3653(b)(2). As it embraces the increased accountability required by the Postal 

Accountability and Enhancement Act, the Postal Service looks forward to 

exercising its responsibility for making any necessary and difficult network 

rationalization decisions with the full support of a watchful Congress. 

Cited in American Postal Workers Union, AFL-CIO v. PRC, 15-1156. Archived on 5/11/17.

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