POSTAL REGULATORY COMMISSION

Analysis of the Postal 

Service’s FY 2021 Annual

Performance Report and 

FY 2022 Performance Plan

June 30, 2022

Postal Regulatory Commission

Submitted 6/30/2022 3:17:49 PM

Filing ID: 122180

Accepted 6/30/2022
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TABLE OF CONTENTS

Page

CHAPTER I: INTRODUCTION............................................................................................................................1

A. Background.................................................................................................................................1

B. FY 2022 Plan and FY 2021 Report.......................................................................................4

1. Evaluation of Performance Goals.........................................................................4

2. Observations and Recommendations ................................................................6

C. Procedural History...................................................................................................................8

CHAPTER II: COMPLIANCE WITH LEGAL REQUIREMENTS............................................................. 10

A. Legal Requirements.............................................................................................................. 10

B. Commission Analysis ........................................................................................................... 12

1. FY 2022 Plan ............................................................................................................. 12

2. FY 2021 Report........................................................................................................ 15

3. Non-Public Performance Indicators ................................................................ 21

4. FY 2022 Performance Indicator Changes ...................................................... 22

CHAPTER III: EVALUATION OF PERFORMANCE GOALS.................................................................... 24

A. High-Quality Service............................................................................................................. 24

1. Background ............................................................................................................... 24

2. Comments .................................................................................................................. 29

3. Commission Analysis............................................................................................. 34

B. Excellent Customer Experience ....................................................................................... 58

1. Background ............................................................................................................... 58

2. Comments .................................................................................................................. 63

3. Commission Analysis............................................................................................. 63

C. Safe Workplace and Engaged Workforce..................................................................... 85

1. Background ............................................................................................................... 85

2. Comments .................................................................................................................. 89

3. Commission Analysis............................................................................................. 89

D. Financial Health ...................................................................................................................101

1. Background .............................................................................................................101

2. Comments ................................................................................................................102

3. Commission Analysis...........................................................................................104

CHAPTER IV: STRATEGIC INITIATIVES..................................................................................................120

A. Background............................................................................................................................120

B. Commission Analysis .........................................................................................................123

Appendix A—Commission Findings and Recommendations

Appendix B—Checklists for Compliance with Major Legal Requirements
Analysis of FY 2021 Performance Report Introduction

and FY 2022 Performance Plan

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CHAPTER I: INTRODUCTION

A. Background

The Postal Service is required by Title 39 of the United States Code to submit to the 

Commission an annual performance report for the previous fiscal year and an annual 

performance plan for the current fiscal year.1 On December 29, 2021, the Postal Service 

filed its fiscal year (FY) 2021 Annual Report to Congress in Docket No. ACR2021.

2 The 

FY 2021 Annual Report contains the Postal Service’s FY 2021 annual performance report

(FY 2021 Report) and FY 2022 annual performance plan (FY 2022 Plan).3

The FY 2021 Report and FY 2022 Plan discuss the Postal Service’s performance goals,4

which are:

• High-Quality Service—deliver mail and packages on-time

• Excellent Customer Experience—improve Postal Service customer 

satisfaction with services provided through every primary touchpoint or 

interaction

• Safe Workplace and Engaged Workforce—promote employee safety in 

the workplace and increase employee satisfaction and engagement

• Financial Health—achieve financial stability and improve the Postal 

Service’s financial position by generating revenue, controlling expenses, 

and improving efficiency5

A performance goal is “a target level of performance expressed as a tangible, measurable 

objective, against which actual achievement shall be compared, including a goal expressed 

as a quantitative standard, value or rate[.]” 39 U.S.C. § 2801(3). The FY 2021 Report

discusses the Postal Service’s progress in meeting its performance goals during FY 2021. 

The FY 2022 Plan describes the Postal Service’s plans for meeting its performance goals in 

FY 2022.

1 39 U.S.C. §§ 2803, 2804, and 3652(g); 39 C.F.R. § 3050.43.

2 See United States Postal Service Annual Report to Congress; see also Library Reference USPS-FY21-17, December 29, 2021, folder 

“FY21.17.Annual.Report” file “FY 2021 Annual Report to Congress.pdf” (FY 2021 Annual Report). On May 12, 2022, the Postal Service filed a 

CHIR response noting some revisions to the FY 2021 Annual Report. Response of the United States Postal Service to Question 1 of Chairman’s 

Information Request No. 31, May 12, 2022 (Response to CHIR No. 31).

3 FY 2021 Annual Report at 32-53. This Analysis cites to pages from the FY 2021 Annual Report when referring to the FY 2021 Report and 

FY 2022 Plan.

4 The Postal Service refers to the performance goals as “corporate performance outcomes.” See id. at 32-33.

5 See Docket No. ACR2020, Responses of the United States Postal Service to Questions 2-3 of Chairman’s Information Request No. 27, April 9, 

2021, question 2.b.ii.; Docket No. ACR2020, Motion of the United States Postal Service for Late Acceptance of Responses to Questions 2 and 3 

of Chairman’s Information Request No. 27, April 9, 2021.
Analysis of FY 2021 Performance Report Introduction

and FY 2022 Performance Plan

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The Postal Service uses performance indicators or metrics to measure outcomes and assess 

whether it has achieved the performance goals. See 39 U.S.C. § 2801(4). For example, the 

performance indicators for the High-Quality Service performance goal measure the 

percentage of various categories of mail delivered on-time. Figure I-1 lists the four 

performance goals and their corresponding performance indicators in FY 2021:

Figure I-1

FY 2021 Performance Goals and Performance Indicators

Source: FY 2021 Annual Report at 33.

For each performance indicator, the Postal Service sets a target in the annual performance 

plan and provides the result in the annual performance report for that fiscal year.6 Table 

I-1 lists the four performance goals, their corresponding performance indicators, results 

from FY 2018 through FY 2021, and targets for FY 2021 and FY 2022.

6 See FY 2021 Annual Report at 33. Initially, the Postal Service did not set FY 2021 targets for the High-Quality Service performance indicators in 

the FY 2022 Plan. See Docket No. ACR2020, United States Postal Service Annual Report to Congress; see also Library Reference USPS-FY20-17, 

December 29, 2020, file “FY2020.Annual.Report.USPS.FY20.17.pdf,” at 33 n.6. On May 14, 2021, the Postal Service filed a revised version of the 

FY 2020 Annual Report that included FY 2021 High-Quality Service targets. Docket No. ACR2020, Notice of the United States Postal Service of 

Supplements to Annual Compliance Report Folders 17 and NP30 – Errata, May 14, 2021; see Docket No. ACR2020, Library Reference USPSFY20-17, December 29, 2020, file “FY2020 Annual Report.USPS.FY20.17.Rev.5.14.2022.pdf,” at 2 (FY 2020 Annual Report).

Single-Piece First-Class Mail

2-Day

3-5-Day

Presorted First-Class Mail

Overnight

2-Day

3-5-Day

First-Class Mail Letter and Flat 

Composite

USPS Marketing Mail and 

Periodicals Composite

Market Dominant Composite

Customer Experience Composite Index

Customer Experience Surveys

Business Service Network

Point of Sale

Delivery

Customer Care Center

Customer 360

Business Mail Entry Unit

USPS.com

Total Accident Rate

Survey Response Rate

Controllable Income (Loss)

High-Quality 

Service

Excellent 

Customer 

Experience

Safe 

Workplace 

and Engaged 

Workforce

Financial 

Health
Analysis of FY 2021 Performance Report Introduction

and FY 2022 Performance Plan

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Table I-1

Performance Goals and Associated Performance Indicators, Targets, and Results

Performance 

Goal Performance Indicator

FY TARGETS FY RESULTS

2022 2021 2021 2020 2019 2018

High-Quality 

Serviceac

Single-Piece

First-Class Mail

2-Day 90.25% 87.81% 86.44% 91.47% 92.05% 93.78%

3-5-Day 90.00% 68.64% 63.20% 78.83% 80.88% 82.48%

Presorted

First-Class Mail

Overnight 94.75% 93.99% 93.38% 94.72% 95.46% 96.00%

2-Day 93.00% 89.20% 88.29% 92.77% 94.10% 94.92%

3-5-Day 90.50% 84.11% 80.87% 89.89% 91.95% 91.96%

First-Class Mail Letter and Flat Composited 91.00 84.88 82.69 89.73 91.36 92.07

USPS Marketing Mail and Periodicals 

Composited

91.50 86.62 87.12 88.38 88.73 89.26

Market Dominant Compositebd 91.25 85.86 85.30 89.00 89.86 89.66

Excellent 

Customer 

Experience

Customer Experience Composite Indexcd 72.99 76.90 68.49 72.40 69.04 67.47

Business Service Network 97.33% 97.20% 97.89% 97.33% 96.68% 95.90%

Point of Sale 87.46% 90.42% 84.39% 87.46% 87.77% 87.98%

Deliveryd 80.94 86.33 70.41 80.94 80.40 80.47

Customer Care Centercd 63.02 60.03 61.85 60.03 46.94 39.19

Customer 360e 40.05% 55.00% 33.34% 40.05% 37.45% 36.73%

Business Mail Entry Unit 96.72% 96.73% 95.66% 96.72% 96.00% 95.33%

USPS.com 73.41% 73.41% 67.13% 73.41% 72.94% 57.54%

Safe 

Workplace

and Engaged

Workforce

Total Accident Rate 13.45 13.75 13.48 13.09 14.19 15.09

Survey Response Ratef N/A 51% 25% 33% 38% 42%

Grand Mean Engagement Scoref 3.38 N/A 3.36 3.29 3.36 3.34

Financial 

Health

Deliveries per Total Workhours % Change N/A N/A N/A 0.90% (0.60)% (0.50)%

Controllable Income (Loss) $ in billions ($4.10) ($5.60) ($2.39) ($3.75) ($3.42) ($1.95)g

 Target Met Target Not Met

N/A – Not used as a performance indicator for that fiscal year.

a Table I-1 lists targets and results for public performance indicators measuring High-Quality Service for Market Dominant products. The Postal Service 

filed under seal information for non-public performance indicators measuring High-Quality Service for certain Competitive products. FY 2021 Annual 

Report 33 n.1; see Chapter II, Section B.3., infra.

b TheMarket Dominant Composite is an additional performance indicator the Postal Service began using in FY 2021 to measure High-Quality Service. See

FY 2020 Annual Report at 34. Results from FY 2018 through FY 2020 are shown for comparison purposes.

c Results of the High-Quality Service performance indicators, as well as the Customer Experience Composite Index and Customer Care Center, are not 

comparable from FY 2018 through FY 2021. See Chapter II, Section B.2.b., infra.

d Targets and results for these performance indicators are not presented as percentages because they are calculated by weighting and aggregating 

various survey results.

e The Customer 360 performance indicator was called Enterprise Customer Care from FY 2017 through FY 2019. See FY 2020 Annual Report at 38.

f

In FY 2022, the Postal Service is changing the performance indicator for measuring an engaged workforce from the Survey Response Rate to the Grand 

Mean Engagement Score. See Chapter III, Section C.1.b., infra.

g Responses of the United States Postal Service to Questions 1-15 of Chairman’s Information Request No. 25, March 25, 2022, question 15 (Response to 

CHIR No. 25).

Source: FY 2021 Annual Report at 33; Docket No. ACR2020, Postal Regulatory Commission, Analysis of the Postal Service’s FY 2020 Annual Performance 

Report and FY 2021 Performance Plan, June 2, 2021, at 6 (FY 2020 Analysis).
Analysis of FY 2021 Performance Report Introduction

and FY 2022 Performance Plan

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B. FY 2022 Plan and FY 2021 Report

Each year, the Commission must evaluate whether the Postal Service met its performance 

goals established in the annual performance plan and annual performance report. 39 U.S.C. 

§ 3653(d). The Commission may also “provide recommendations to the Postal Service 

related to the protection or promotion of public policy objectives set out in [Title 39].” Id.

1. Evaluation of Performance Goals

The Commission evaluates whether the Postal Service met each performance goal by 

comparing targets and results for each performance indicator measuring progress toward 

that goal. It considers the Postal Service to have met a performance goal if the result of each 

performance indicator for that performance goal meets or exceeds the target established in 

the applicable performance plan. FY 2020 Analysis at 7. The Commission considers the 

Postal Service to have partially met a performance goal if the Postal Service meets or 

exceeds some but not all targets for each performance indicator measuring progress 

toward that goal. The Commission considers the Postal Service to have not met a 

performance goal if it missed targets for each performance indicator measuring progress 

toward that goal.

The Commission compared FY 2021 targets and results for each performance indicator. 

Table I-1 and Figure I-2 show which performance indicators met or exceeded targets for 

each performance goal and which ones failed to meet targets. Based on this comparison, 

the Commission finds that in FY 2021:

• The Postal Service partially met the High-Quality Service performance 

goal because it missed all but one target for the High-Quality Service 

performance indicators.

• The Postal Service partially met the Excellent Customer Experience 

performance goal because it exceeded targets for two performance 

indicators but missed targets for the other six performance indicators.

• The Postal Service partially met the Safe Workplace and Engaged 

Workforce because the Postal Service exceeded the FY 2021 Total 

Accident Rate target but missed the FY 2021 Survey Response Rate 

target.

• The Postal Service met the Financial Health performance goal because the

FY 2021 Controllable Income (Loss) result was better than the target.
Analysis of FY 2021 Performance Report Introduction

and FY 2022 Performance Plan

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Figure I-2

FY 2021 Performance Indicators That

Met, Exceeded, or Failed to Meet Targets

Source: FY 2021 Annual Report at 34, 38, 42-43, 48.

Chapter III discusses the Postal Service’s explanations for why it did not meet, partially 

met, or met the High-Quality Service, Excellent Customer Experience, Safe Workplace and 

Engaged Workforce, and Financial Health performance goals, as well as its plans and 

timelines for achieving each performance goal in FY 2022.
Analysis of FY 2021 Performance Report Introduction

and FY 2022 Performance Plan

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2. Observations and Recommendations

When evaluating whether the Postal Service met its performance goals, the Commission 

may provide recommendations related to protecting or promoting public policy objectives 

in Title 39. 39 U.S.C. § 3653(d). In this Analysis, the Commission provides observations and 

recommendations for each performance goal. These observations and recommendations 

are discussed in detail in Chapter III and include the following:

High-Quality Service:

• Setting performance indicator targets is a highly fact- and context-specific 

undertaking that balances the need for inspiring continuous 

improvement with the importance of being realistic and achievable under 

the existing operational circumstances. In striking this balance, it is 

important to avoid setting performance indicator targets that are neither 

too high as to be wholly unachievable nor too low as to be wholly

unreasonable for purposes of evaluating whether a performance goal was 

achieved.

• Although High-Quality Service performance indicator quarterly results 

began to improve in Quarter 2 of FY 2021, it remains to be seen whether 

this represents real year-over-year improvement or simply a return to 

the pattern of seasonal variation that was typical prior to the outbreak of 

the COVID-19 pandemic.

• The Commission finds that the measures the Postal Service has 

undertaken to improve employee availability appear reasonable. The 

Commission recommends that the Postal Service leverage data from the 

past 2 years to identify patterns that might enable the Postal Service to 

better anticipate when and where future employee availability problems 

are likely to have the largest impact on High-Quality Service.

• The Commission recommends that the Postal Service:

o Consider implementing some of the best practices identified by the United 

States Postal Service Office of Inspector General (OIG) to better recruit and 

retain truck drivers and increase the efficiency of truck usage.

o Focus its efforts on reducing Critically Late Trips (CLTs) in the Districts with 

the highest concentrations of them.

o Restart the Disruptive Events initiative and report on its progress in the 

FY 2022 Annual Report to Congress.

o Develop methods to quantitatively measure the effectiveness of its service 

improvement initiatives to improve resource allocation.
Analysis of FY 2021 Performance Report Introduction

and FY 2022 Performance Plan

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Excellent Customer Experience:

• The Commission finds the FY 2022 targets for the Excellent Customer 

Experience performance indicators are reasonable. To improve 

transparency, the Commission recommends that the FY 2023 annual 

performance plan (FY 2023 Plan) discuss the rationale for setting the 

FY 2023 targets.

• The Commission recommends that the Postal Service continue to use the 

Net Promoter System score to measure and assess customer experience

(CX) in FY 2022. The Commission also recommends that the Postal 

Service measure and assess CX using the Customer Effort Score and 

consider adding the Customer Effort Score question to the Point of Sale, 

USPS.com, and other CX surveys.

• The Commission commends the Postal Service for its efforts to keep up 

with private sector and other federal agencies by engaging with 

customers on social media and using social media to evaluate CX and 

obtain other insights. The Postal Service’s efforts to respond to customer 

inquiries on social media in FY 2021 are commendable given the small 

number of staff available to address customer questions and issues. To 

alleviate the high workload, the Commission recommends that the Postal 

Service consider hiring more employees for the Social Business 

Intelligence and Social Customer Response teams, as well as use 

automated technologies to address the most common issues.

Safe Workplace and Engaged Workforce:

• The Commission commends the Postal Service for meeting the Total 

Accident Rate target for the third year in a row. The FY 2022 Total 

Accident Rate target appears achievable because it is close to the FY 2021 

result. The Postal Service’s plans for improving workplace safety in 

FY 2022 are reasonable.

• If the Survey Response Rate continues to decline in FY 2022, the 

Commission recommends that the Postal Service investigate and address 

the root causes. The Postal Service should take steps to improve the 

response rate by, for example, designating a specific time to take the 

survey and prioritizing changes based on feedback received from the 

Postal Pulse survey.

• The Commission commends the Postal Service for improving the Grand 

Mean Engagement Score in FY 2021 despite the COVID-19 pandemic, 

organizational restructuring, and other factors impacting employee 

engagement. The FY 2022 target is reasonable considering the range of 

Grand Mean Engagement Scores during the past few years. The 

Commission recommends that the Postal Service continue taking steps to 

improve mean scores for all Postal Pulse survey items, especially for 

Items 4, 7, 11, and 13.
Analysis of FY 2021 Performance Report Introduction

and FY 2022 Performance Plan

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Financial Health:

• The Commission recommends that the Postal Service revise the existing 

Controllable Income (Loss) performance indicator in future reports to 

exclude revenues accumulated from the retirement-based rate authority. 

This change would ensure that revenues collected using the retirementbased rate authority are excluded from the Controllable Income (Loss) 

metric.

• The Commission continues to recommend that the Postal Service adopt 

additional performance indicators for measuring progress towards the 

Financial Health performance goal. Specifically, the Commission suggests 

that the Postal Service consider using either total factor productivity or 

labor productivity as performance indicators.

The Commission’s findings, observations, and recommendations contained in this Analysis 

are listed in Appendix A.

C. Procedural History

Since Docket No. ACR2013, the Commission has evaluated whether the Postal Service met 

its performance goals in reports separate from the Annual Compliance Determination

(ACD).7 By issuing separate reports, the Commission provides a more in-depth analysis of 

the Postal Service’s progress toward meeting its performance goals and plans to improve 

performance in future years. The Commission continues this current practice by issuing its

analysis of the FY 2022 Plan and FY 2021 Report separately from the FY 2021 ACD.8

In conducting this review, the Commission designated a Public Representative and invited 

comments on whether the Postal Service met its performance goals and satisfied applicable 

statutory and regulatory requirements.

9 It also sought input on public policy 

recommendations, strategic initiatives, and other relevant matters. Order No. 6082 at 3.

7 See Docket No. ACR2013, Postal Regulatory Commission, Review of Postal Service FY 2013 Performance Report and FY 2014 Performance Plan, 

July 7, 2014; Docket No. ACR2014, Postal Regulatory Commission, Analysis of the Postal Service’s FY 2014 Program Performance Report and 

FY 2015 Performance Plan, July 7, 2015; Docket No. ACR2015, Postal Regulatory Commission, Analysis of the Postal Service’s FY 2015 Annual 

Performance Report and FY 2016 Performance Plan, May 4, 2016 (FY 2015 Analysis); Docket No. ACR2016, Postal Regulatory Commission, 

Analysis of the Postal Service’s FY 2016 Annual Performance Report and FY 2017 Performance Plan, April 27, 2017 (FY 2016 Analysis); Docket 

No. ACR2017, Postal Regulatory Commission, Analysis of the Postal Service’s FY 2017 Annual Performance Report and FY 2018 Performance 

Plan, April 26, 2018 (FY 2017 Analysis); Docket No. ACR2018, Postal Regulatory Commission, Analysis of the Postal Service’s FY 2018 Annual 

Performance Report and FY 2019 Performance Plan, May 13, 2019 (FY 2018 Analysis); Docket No. ACR2019, Postal Regulatory Commission, 

Analysis of the Postal Service’s FY 2019 Annual Performance Report and FY 2021 Performance Plan, June 1, 2021 (FY 2019 Analysis); FY 2020 

Analysis.

8 See Annual Compliance Determination Report, Fiscal Year 2021, March 29, 2022 (FY 2021 ACD).

9 Notice Requesting Comments on the Postal Service FY 2021 Annual Performance Report and FY 2022 Annual Performance Plan, January 6, 

2022, at 2-3 (Order No. 6082).
Analysis of FY 2021 Performance Report Introduction

and FY 2022 Performance Plan

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Several CHIRs were issued seeking clarification of the FY 2022 Plan and FY 2021 Report.

10

The Postal Service filed responses to all information requests.11 The Public Representative, 

the Association for Postal Commerce, and the Prison Policy Initiative filed comments,12

which the Postal Service addressed in reply comments.13

The Commission analyzes the FY 2022 Plan and FY 2021 Report in the following chapters:

• Chapter II analyzes the FY 2022 Plan and FY 2021 Report for compliance 

with the legal requirements of 39 U.S.C. §§ 2803 and 2804.

• Chapter III evaluates whether the Postal Service met its four performance 

goals in FY 2021 and contains related observations and 

recommendations for each performance goal.

• Chapter IV discusses the Postal Service’s strategic initiatives and its new 

strategic plan for achieving financial sustainability and service excellence 

during the next 10 years (10-Year Strategic Plan).

10 Chairman's Information Request No. 4, January 21, 2022 (CHIR No. 4); Chairman's Information Request No. 8, January 28, 2022 (CHIR No. 8);

Chairman's Information Request No. 15, February 11, 2022 (CHIR No. 15); Chairman's Information Request No. 21, February 25, 2022 (CHIR No. 

21); Chairman's Information Request No. 24, March 9, 2022 (CHIR No. 24); Chairman's Information Request No. 25, March 18, 2022 (CHIR No. 

25); Chairman's Information Request No. 26, March 25, 2022 (CHIR No. 26); Chairman's Information Request No. 27, March 29, 2022 (CHIR 

No. 27); Chairman's Information Request No. 28, April 1, 2022 (CHIR No. 28); Chairman's Information Request No. 29, April 18, 2022 (CHIR 

No. 29); Chairman's Information Request No. 30, April 25, 2022 (CHIR No. 30); Chairman's Information Request No. 31, May 5, 2022 (CHIR 

No. 31).

11 Responses of the United States Postal Service to Questions 1-3 of Chairman's Information Request No. 4, January 28, 2022 (Response to CHIR 

No. 4); Responses of the United States Postal Service to Questions 1-19 of Chairman’s Information Request No. 8, February 4, 2022 (Response 

to CHIR No. 8); Responses of the United States Postal Service to Questions 1-2 of Chairman’s Information Request No. 15, February 18, 2022

(Response to CHIR No. 15); Responses of the United States Postal Service to Questions 1-2 of Chairman’s Information Request No. 21, March 4, 

2022 (Response to CHIR No. 21); Responses of the United States Postal Service to Questions 1-2 of Chairman’s Information Request No. 24, 

March 16, 2022 (Response to CHIR No. 24); Response to CHIR No. 25; Responses of the United States Postal Service to Questions 1-6 of 

Chairman’s Information Request No. 26, April 1, 2022 (April 1 Response to CHIR No. 26); Revised Responses of the United States Postal Service 

to Questions 2 and 3 of Chairman’s Information Request No. 26—Errata, April 25, 2022 (April 25 Response to CHIR No. 26); Response of the 

United States Postal Service to Question 1 of Chairman’s Information Request No. 27, April 5, 2022 (Response to CHIR No. 27); Response of the 

United States Postal Service to Question 1 of Chairman’s Information Request No. 28, April 8, 2022 (Response to CHIR No. 28); Responses of the 

United States Postal Service to Questions 1-11 of Chairman’s Information Request No. 29, April 25, 2022 (Response to CHIR No. 29); Response 

of the United States Postal Service to Question 1 of Chairman’s Information Request No. 30, May 2, 2022 (Response to CHIR No. 30); Response 

to CHIR No. 31.

12 Public Representative Comments on the FY 2021 Performance Report and FY 2022 Performance Plan, March 1, 2022 (PR Comments); 

Comments of the Association for Postal Commerce on FY 2021 Performance Report and FY 2022 Performance Plan, March 1, 2022 (PostCom 

Comments); Opening Comments of Prison Policy Initiative, March 1, 2022 (PPI Comments).

13 Reply Comments of the United States Postal Service, March 15, 2022 (Postal Service Reply Comments).
Analysis of FY 2021 Performance Report Compliance with Legal Requirements

and FY 2022 Performance Plan

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CHAPTER II: COMPLIANCE WITH LEGAL 

REQUIREMENTS

A. Legal Requirements

The FY 2022 Plan and FY 2021 Report must meet the requirements of 39 U.S.C. §§ 2803 and 

2804.14 Section 2803 establishes requirements for the Postal Service’s annual performance 

plan, which must cover “each program activity set forth in the Postal Service budget,”15 and 

must:

• Establish performance goals that define the performance level to be 

achieved by a program activity

• Express the performance goals in an objective, quantifiable, and 

measurable form unless an alternative form is used16

• Briefly describe the operational processes, skills and technology, and the 

human, capital, information, or other resources needed to meet the 

performance goals

• Establish performance indicators to measure or assess each program 

activity’s relevant outputs, service levels, and outcomes

• Provide a basis for comparing actual program results with established 

performance goals

• Describe the means to be used to verify and validate measured values

39 U.S.C. § 2803(a). The annual performance plan may aggregate, disaggregate, or 

consolidate program activities, provided that doing so does not omit or minimize the 

14 Chapter 28 of Title 39, which includes sections 2803 and 2804, was added by the Government Performance and Results Act (GPRA) of 1993, 

Pub. L. 103-62, 107 Stat. 285 (1993). Sections 2803 and 2804 were not affected by the GPRA Modernization Act of 2010, which does not apply 

to the Postal Service. See Pub. L. 111-352, 124 Stat. 3866 (2011).

15 A “program activity” is “a specific activity related to the mission of the Postal Service[.]” 39 U.S.C. § 2801(5). The Commission discusses 

program activities below. See Section B.1., infra.

16 See 39 U.S.C. § 2803(b). The Postal Service may use an alternative form if it determines that it is not feasible to express the performance goals 

for a particular program activity in an objective, quantifiable, and measurable form. Id. The alternative form must either: (1) include separate 

descriptive statements of a minimally effective program and a successful program, with sufficient precision and in such terms to allow for an 

accurate, independent determination of whether the program activity’s performance meets the criteria of either descriptive statement; or (2)

“state why it is infeasible or impractical to express a performance goal in any form for the program activity.” Id. §§ 2803(b)(1), (b)(2).
Analysis of FY 2021 Performance Report Compliance with Legal Requirements

and FY 2022 Performance Plan

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significance of any program activity constituting a major function or operation. Id.

§ 2803(c).

39 U.S.C. § 2804 sets forth requirements for the Postal Service’s annual performance 

report, which must:

• Evaluate whether the Postal Service has met the performance goals 

previously established by the annual performance plan for that fiscal year

• “[S]et forth the performance indicators established in the Postal Service 

performance plan, along with the actual program performance achieved 

compared with the performance goals expressed in the plan for that fiscal 

year”17

• Include “actual results for the three preceding fiscal years”

• Evaluate the annual performance plan for the current fiscal year (in this 

case, the FY 2022 Plan) relative to the performance achieved toward 

those goals in the year covered by the annual performance report (in this 

case, the FY 2021 Report)

• If the Postal Service does not meet a performance goal, explain why the 

goal was not met and describe plans and schedules for achieving the 

performance goal18

• Include summary findings of program evaluations completed during the 

fiscal year covered by the report

39 U.S.C. § 2804(b)(1), (c), (d).

CHIR Nos. 4 and 15 were issued to help evaluate compliance with 39 U.S.C. §§ 2803 

and 2804. The Public Representative asserts that the FY 2022 Plan and FY 2021 

Report complies with sections 2803 and 2804. PR Comments at 6. She states that the 

Postal Service included all the necessary information to evaluate its performance in 

FY 2021, as well as the required information on program activities in the Postal 

Service’s FY 2022 budget. Id.

17 Id. § 2804(b)(1). If performance goals are specified in an alternative form by descriptive statements of a minimally effective program activity 

and a successful program activity, the annual performance report must describe results of these program activities in relation to these 

categories, including whether the performance failed to meet the criteria of either category. Id. § 2804(b)(2); see id. § 2803(b).

18 Id. § 2804(d)(3)(A) and (B). If the performance goal is impractical or infeasible, the annual performance report must explain why and 

recommend further action. Id. § 2804(d)(3)(C).
Analysis of FY 2021 Performance Report Compliance with Legal Requirements

and FY 2022 Performance Plan

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B. Commission Analysis

The Postal Service substantially complied with the requirements of 39 U.S.C. §§ 2803 and 

2804. The Commission commends the Postal Service for its attention to the Commission’s 

past instructions concerning statutory compliance of the FY 2022 Plan and FY 2021 Report. 

The transparency and completeness of the Postal Service’s annual performance plan and 

annual performance report filings have improved over the past few years and thereby 

facilitate the evaluation of the information provided by the Postal Service.

The FY 2021 Report presents one issue regarding strict compliance with 39 U.S.C. § 2804(c) 

related to the Customer Care Center (CCC) performance indicator. Specifically, the FY 2021 

Report lacks an indication that CCC results from FY 2018 through FY 2021 are not 

comparable. Moreover, although the applicable methodology changes to the CCC 

performance indicator are explained in the FY 2021 Annual Compliance Report (ACR), 

neither the explanation nor a cross-reference to the explanation appears in the FY 2021 

Report.

As previously stated, the Commission will only “review information submitted within the 

annual performance reports and annual performance plans to determine statutory 

compliance.” FY 2016 Analysis at 9. The Commission will not consider information 

appearing in other documents unless they are cross-referenced in the FY 2023 Annual 

Performance Plan (FY 2023 Plan) and the FY 2022 Annual Performance Report (FY 2022 

Report). The Commission expects that the Postal Service will strictly comply in future 

filings, and Appendix B includes guidance for FY 2022 compliance with the major 

requirements of 39 U.S.C. §§ 2803 and 2804.

This issue is discussed in more detail in Section B.2.b., infra.

1. FY 2022 Plan

The FY 2022 Plan must meet the requirements of 39 U.S.C. § 2803. The Commission 

evaluates legal compliance based on the following seven elements.

First, the FY 2022 Plan must “cover[] each program activity set forth in the Postal Service 

budget... .” See 39 U.S.C. § 2803(a). The Commission previously found that “Postal Service 

budget” in section 2803(a) means the Postal Service’s operating budget that is part of the 

Integrated Financial Plan (IFP). See FY 2016 Analysis at 13. In the FY 2020 Analysis, the 

Commission stated that to comply with 39 U.S.C. § 2803(a), the FY 2022 Plan must “identify 

all program activities in the FY 2022 IFP and explain how the FY 2022 Plan covers each one 

by relating each program activity to one or more performance goals or indicators.” FY 2020

Analysis at 18.
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and FY 2022 Performance Plan

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In the FY 2022 Plan, the Postal Service explains that FY 2022 targets for each performance 

indicator are aligned with the FY 2022 IFP, which includes the Postal Service’s planned 

revenue and expenses for FY 2022. FY 2021 Annual Report at 32. It notes that each fiscal 

year, it develops a plan and budget intended to be sufficient to meet targeted financial and 

nonfinancial performance outcomes. Id. It states that it sets all performance indicator 

targets “to be achievable given the planned expenses in the IFP.” Id.

The FY 2022 Plan also links program activities to the Controllable Income (Loss) 

performance indicator, which measures progress toward the Financial Health performance 

goal. Id. at 46. The Postal Service explains that Controllable Income (Loss) projections “are 

based on planned revenues and expenditures for every program activity included in the 

Postal Service’s [IFP].” Id. The program activities in the FY 2022 IFP19 are total revenue and 

controllable expenses, which are divided into several categories: compensation and 

benefits, Federal Employees Retirement System (FERS) normal cost, Postal Service Retiree 

Health Benefits Fund (RHBF) normal cost (controllable), transportation, depreciation, 

supplies and services, and rent, utilities, and other controllable expenses. FY 2021 Annual 

Report at 46. The FY 2022 Plan includes information for each program activity in a table 

listing total revenue and controllable expenses from FY 2018 through FY 2021 and planned 

revenue and expenses for FY 2022. See id. at 47. For these reasons, the FY 2022 Plan

complies with the Commission’s directive to “identify all program activities in the FY 2022 

IFP and explain how the FY 2022 Plan covers each one.” See FY 2020 Analysis at 18.

Second, the FY 2022 Plan must “establish performance goals to define the level of 

performance to be achieved by a program activity[.]” 39 U.S.C. § 2803(a)(1). Section 

2803(a)(1) requires the FY 2022 Plan to set forth the performance goals and establish 

targets for each performance indicator the Postal Service will use to evaluate performance 

during FY 2022. See FY 2016 Analysis at 10. If no target is set, the Postal Service must 

explain why.

The FY 2022 Plan lists targets for each public performance indicator the Postal Service will 

use to evaluate performance during FY 2022.20 The Postal Service did not set FY 2022 

targets for Large Business Panel and Survey Response Rate because the Postal Service 

stopped using them as performance indicators. In FY 2019, the Postal Service removed 

Large Business Panel as a performance indicator to reduce customer segment survey 

19 See United States Postal Service, Fiscal Year 2022 Integrated Financial Plan, November 2021 (FY 2022 IFP).

20 See FY 2021 Annual Report at 33. The Postal Service also uses several non-public performance indicators for Competitive products to measure 

progress toward the High-Quality Service performance goal. See Section B.3., infra. FY 2022 target(s) are included in a non-public annex filed 

with the FY 2021 ACR. See FY 2021 Annual Report at 33 n.1; Library Reference USPS-FY21-NP30, December 29, 2021, folder “USPS-FY21-NP30,” 

file “NONPUBLIC Preface USPS-FY21-NP30.pdf,” at 8 (Library Reference USPS-FY21-NP30, Preface).
Analysis of FY 2021 Performance Report Compliance with Legal Requirements

and FY 2022 Performance Plan

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redundancies because business CX is already measured by other surveys.21 In FY 2022, the 

Postal Service explains that it is using the Grand Mean Engagement Score instead of the 

Survey Response Rate as a performance indicator for the Safe Workplace and Engaged 

Workforce performance goal.22

Third, the FY 2022 Plan must “express [performance] goals in an objective, quantifiable, 

and measurable form unless an alternative form is used under [section 2803](b)[.]” See 

39 U.S.C. § 2803(a)(2). Section 2803(a)(2) requires the FY 2022 Plan to express 

performance goals as quantitative targets that can be compared with objectively measured 

results for each performance indicator unless an alternative form is used under section 

2803(b). FY 2016 Analysis at 10. The FY 2022 Plan meets this requirement because each 

FY 2022 target is expressed in a measurable form, such as a percentage or dollar amount. 

See FY 2021 Annual Report at 33.

Fourth, the FY 2022 Plan must “briefly describe the operational processes, skills and 

technology, and the human, capital, information, or other resources required to meet the 

performance goals[.]” See 39 U.S.C. § 2803(a)(3). The FY 2022 Plan meets this requirement 

by explaining what resources are necessary to meet each performance goal. For example, to 

meet the High-Quality Service performance goal in FY 2022, the Postal Service states it will 

stabilize the career workforce, hire more than 40,000 seasonal delivery and plant 

personnel, and install new processing equipment to accommodate customer delivery 

needs. FY 2021 Annual Report at 36.

Fifth, the FY 2022 Plan must “establish performance indicators to be used in measuring or 

assessing the relevant outputs, service levels, and outcomes of each program activity[.]” See

39 U.S.C. § 2803(a)(4). Performance indicators are metrics established by the Postal 

Service for measuring progress toward each performance goal.23 The FY 2022 Plan meets 

this requirement because each performance goal has at least one performance indicator 

that evaluates outputs, service levels, and outcomes. For example, the Safe Workplace and 

Engaged Workforce performance goal uses two performance indicators to measure 

workplace safety and employee engagement. See FY 2021 Annual Report at 42-45.

Sixth, the FY 2022 Plan must “provide a basis for comparing actual program results with 

the established performance goals[.]” See 39 U.S.C. § 2803(a)(5). The FY 2022 Plan meets 

this requirement by listing the performance indicators that will provide a basis for 

21 See Docket No. ACR2018, United States Postal Service Annual Report to Congress; see also Docket No. ACR2018, Library Reference USPS-FY18-

17, December 28, 2018, at 21 (FY 2018 Annual Report).

22 FY 2021 Annual Report at 44. The Grand Mean Engagement Score and Survey Response Rate are discussed in Chapter III, Section C., infra.

23 Specifically, a performance indicator is “a particular value or characteristic used to measure output or outcome[.]” 39 U.S.C. § 2801(4).
Analysis of FY 2021 Performance Report Compliance with Legal Requirements

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comparing FY 2022 results with the targets established in the FY 2022 Plan. See FY 2021 

Annual Report at 33.

Seventh, the FY 2022 Plan must “describe the means to be used to verify and validate 

measured values.” See 39 U.S.C. § 2803(a)(6). Section 2803(a)(6) requires the Postal 

Service to explain how it verifies and validates targets and results for each performance 

indicator using objective measurement systems. FY 2020 Analysis at 19. The FY 2022 Plan

meets this requirement by, for example, explaining that it uses an internal Service 

Performance Measurement (SPM) system “that measures and reports service performance 

from the time mail is deposited in a Postal Service facility to when a USPS employee 

delivers it to a home, business, or PO Box.” See FY 2021 Annual Report at 34.

For these reasons, the Commission finds that the FY 2022 Plan complies with all requirements 

of 39 U.S.C. § 2803(a).

Appendix B contains guidance to assist the Postal Service’s efforts to ensure the FY 2023 

Plan complies with section 2803(a).

2. FY 2021 Report

The FY 2021 Report substantially complies with 39 U.S.C. § 2804. However, the FY 2021 

Report presents one issue regarding strict compliance. The Commission expects that the FY 

2022 Report will strictly comply and provides guidance to facilitate the Postal Service’s 

efforts to comply. This issue is discussed in Section B.2.b., infra.

a. Comparable FY 2021 Targets and Results

The annual performance report must “set forth the performance indicators established in 

the Postal Service performance plan, along with the actual program performance achieved 

compared with the performance goals expressed in the plan for that fiscal year.” 39 U.S.C. § 

2804(b)(1). Section 2804(b)(1) requires results expressed in the annual performance 

report to be comparable with targets set in the annual performance plan for that fiscal year. 

FY 2016 Analysis at 16. Initially, the Postal Service did not set FY 2021 High-Quality Service 

targets and did not include all the FY 2021 Excellent Customer Experience targets in the 

FY 2021 Annual Performance Plan (FY 2021 Plan). FY 2020 Analysis at 17, 20-23. On May 14, 

2021, the Postal Service filed a revised version of the FY 2020 Annual Report that included 

FY 2021 High-Quality Service targets.24 It also provided FY 2021 Excellent Customer 

Experience targets in a CHIR response. FY 2020 Analysis at 22-23. The Commission stated 

that to comply with 39 U.S.C. § 2804(b)(1), “the FY 2021 Report must include the FY 2021 

targets for the High-Quality Service performance indicators that were submitted to the 

24 See Docket No. ACR2020, Notice of the United States Postal Service of Supplements to Annual Compliance Report Folders 17 and NP30 --

Errata, May 14, 2021.
Analysis of FY 2021 Performance Report Compliance with Legal Requirements

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Commission in a much delayed filing on May 14, 2021, as well as all of the FY 2021 targets 

for the Excellent Customer Experiences performance indicators” provided in a CHIR 

response. Id. at 24.

The Commission also directed that the FY 2021 Report express results for each 

performance indicator that are comparable to FY 2021 targets set in the FY 2021 Plan or 

provided by the Postal Service. Id. The Commission stated, “[i]f a comparable FY 2021 

result cannot be provided, the FY 2021 Report must explain why and either: (1) explain 

how to compare results between the current and former methodologies; or (2) explain why 

making this comparison is not feasible.” It also recommended that the Postal Service 

maintain the same performance indicators, methodologies, and targets once they are set in 

the applicable annual performance plan. Id.

The FY 2021 Report includes the same performance indicators and targets the Postal 

Service set in the FY 2021 Plan and provided in subsequent filings.25 It also compares FY 

2021 targets and results for each performance indicator. See FY 2021 Annual Report at 33. 

The Postal Service confirms that the FY 2021 target and result for each performance 

indicator are comparable.26

The Commission finds that the FY 2021 Report complies with 39 U.S.C. § 2804(b)(1). To 

comply with 39 U.S.C. § 2804(b)(1) next year, the FY 2022 Annual Performance Report 

(FY 2022 Report) must set forth the same performance indicators and targets as the FY 2022 

Plan and compare FY 2022 targets and results for each performance indicator.

Also, the FY 2022 result for each performance indicator must be comparable to the 

corresponding FY 2022 target set in the FY 2022 Plan. If a comparable FY 2022 result is not

provided, the FY 2022 Report must include the following:

1. Explain why a comparable result cannot be provided; and

2. Address the lack of comparability by explaining either of the following:

a. How to compare results between the current and former methodologies; 

or

b. Why making this comparison is not feasible.

The Commission recommends that the Postal Service not change performance indicators, 

methodologies, or targets once they are set for a given fiscal year.

25 Compare FY 2021 Annual Report at 33, with FY 2020 Annual Report at 33 and Docket No. ACR2020, Responses of the United States Postal 

Service to Questions 1-6 of Chairman’s Information Request No. 10, February 11, 2021, question 1.

26 Response to CHIR No. 4, question 1.a.; Response to CHIR No. 15, question 1.a.
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b. Comparable Three-Year Results

The annual performance report must also “include actual results for the three preceding 

fiscal years” as required by 39 U.S.C. § 2804(c). The Commission previously found that 

“actual results” under section 2804(c) must be comparable across the three preceding 

fiscal years. See FY 2016 Analysis at 18. In the FY 2020 Analysis, the Commission stated that 

“[t]o comply with 39 U.S.C. § 2804(c) next year, the FY 2021 Report must include 

comparable results for each performance indicator for, at a minimum, FYs 2018, 2019, 

2020, and 2021. To be comparable, results for each fiscal year must be calculated and 

expressed using the same methodology.” FY 2020 Analysis at 25. If comparable results 

cannot be provided, the Commission directed the Postal Service to explain in the FY 2021 

Report why results are not directly comparable across these fiscal years. Id. The 

Commission also directed the Postal Service to explain in the FY 2021 Report either how to 

compare results between the current and former methodologies or explain why making 

this comparison is not feasible. Id.

The FY 2021 Report includes comparable results for FYs 2018, 2019, 2020, and 2021 for the 

Financial Health and Safe Workplace and Engaged Workforce performance goals, as well as 

for most Excellent Customer Experience performance indicators. Response to CHIR No. 4, 

question 2.a. The FY 2021 Report does not include comparable results for the High-Quality 

Service performance indicators and two Excellent Customer Experience performance 

indicators.27 However, as discussed below, the Postal Service provides the requisite 

explanations.

High-Quality Service. In FY 2019, the Postal Service began using an internal SPM system to 

measure progress toward the High-Quality Service performance goal.28 The former 

external measurement system used a different methodology for calculating service 

performance results than the current internal SPM system.29 Consequently, FY 2018 

results, which were calculated using the former measurement system, are not comparable 

with results from FY 2019 through FY 2021, which were calculated using the current SPM 

system.

In the FY 2020 Analysis, the Commission stated that for the High-Quality Service 

performance goal to comply with 39 U.S.C. § 2804(c), “the FY 2021 Report must describe 

27 Response to CHIR No. 4, question 2.b.; FY 2021 Annual Report at 33; United States Postal Service FY 2021 Annual Compliance Report, 

December 29, 2021, at 58 (FY 2021 ACR).

28 FY 2018 Annual Report at 19. The Commission approved the use of an internal SPM system in FY 2018. See Docket No. PI2015-1, Order 

Approving Use of Internal Measurement Systems, July 5, 2018 (Order No. 4697); Docket No. PI2015-1, Errata to Order No. 4697, August 21, 

2018 (Order No. 4771).

29 Docket No. ACR2020, Responses of the United States Postal Service to Questions 1-7 of Chairman’s Information Request No. 2, January 21, 

2021, question 4.b.i. (Docket No. ACR2020 Response to CHIR No. 2).
Analysis of FY 2021 Performance Report Compliance with Legal Requirements

and FY 2022 Performance Plan

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the methodological differences between the former and current measurement systems and 

explain why results are not directly comparable across FYs 2018, 2019, 2020, and 2021.” 

FY 2020 Analysis at 26. The Commission also directed that the FY 2021 Report “must either 

explain how to compare results between the current and former measurement systems or 

explain why making this comparison is not feasible.” Id.

In the FY 2021 Report, the Postal Service cross-references a CHIR response containing the 

explanations required to comply with section 2804(c).30 The Postal Service explains that 

because the former external measurement system was retired at the end of FY 2018, FY 

2018 data are not available from this system. Docket No. ACR2020 Response to CHIR No. 2, 

question 4.b.ii. It refers to three library references that explain the differences between the 

former external system and new internal SPM system.31 Thus, the High-Quality Service 

performance indicators comply with section 2804(c) because the FY 2021 Report includes 

the explanations the Commission required in the FY 2020 Analysis.

Excellent Customer Experience. Two Excellent Customer Experience performance indicators 

do not have comparable results from FY 2018 through FY 2021: CX Composite Index and 

CCC. The FY 2021 Report cross-references a CHIR response in Docket No. ACR2020 

explaining that the FY 2018 CX Composite Index result was based on survey responses 

from eight surveys, including the Large Business Panel.32 Results from FY 2019 through FY 

2021 were based on survey responses from seven surveys that do not include the Large 

Business Panel survey.33 These explanations are sufficient to demonstrate compliance with 

section 2804(c).

In FY 2021, the Postal Service also changed the methodology for calculating the CCC result, 

which is a composite of overall satisfaction results with the Live Agent and Interactive 

Voice Response (IVR) system. FY 2021 ACR at 58. From FY 2018 through FY 2020, the Live 

Agent result was weighted 25 percent, and the IVR system result was weighted 75 percent. 

Id. In FY 2021, the Postal Service states it discontinued weighting the Live Agent and IVR 

system results and instead consolidated all responses into one overall calculation. Id.

Although this change affected comparability of results, the Postal Service asserts that the 

impact was minor because there was only a small difference in the FY 2021 CCC result 

calculated using the new methodology (61.85) compared to the former methodology 

30 FY 2021 Annual Report at 33 n.3; see Docket No. ACR2020 Response to CHIR No. 2.

31 Id. (citing Docket No. ACR2018, Library Reference USPS-FY18-29, December 28, 2018; Docket No. ACR2019, Library Reference USPS-FY19-29, 

December 27, 2019; Docket No. ACR2020, Library Reference USPS-FY20-29, December 29, 2020).

32 Docket No. ACR2020 Response to CHIR No. 2, question 4.b.i. The CX Composite Index, CCC, and other Excellent Customer Experience 

performance indicators are discussed in Chapter III, Section B., infra.

33 Docket No. ACR2020 Response to CHIR No. 2, question 4.b.i.; FY 2021 Annual Report at 33 n.5.
Analysis of FY 2021 Performance Report Compliance with Legal Requirements

and FY 2022 Performance Plan

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(60.14). Id. It states that the impact on the FY 2021 CX Composite Index result was even 

smaller given that the result decreased by only 0.34 points using the new methodology. Id.

The Commission previously stated that it will only “review information submitted within 

the annual performance reports and annual performance plans to determine statutory 

compliance.” FY 2016 Analysis at 9. The FY 2021 Report lacks any reference to the noncomparability of the CCC results from FY 2018 through FY 2021. Further, the information 

appearing on page 58 of the FY 2021 ACR was neither included nor cross-referenced in the 

FY 2021 Report.

34 Although the FY 2021 Report did not strictly comply with section 2804(c), 

the information appearing on page 58 of the FY 2021 ACR substantially complies with the 

requirements of section 2804(c). Consistent with its previous statements, the Commission 

will only consider information submitted within the FY 2022 Report to determine 

compliance with section 2804(c) next year.

The Commission finds that the FY 2021 Report substantially complies with 39 U.S.C. § 2804(c). 

To comply with 39 U.S.C. § 2804(c) next year, the FY 2022 Report must include comparable 

results for each performance indicator for FYs 2019, 2020, 2021, and 2022. To be comparable, 

results for each fiscal year must be calculated and expressed using the same methodology. If 

comparable results from FY 2019 through FY 2022 are not provided for any performance 

indicator, the FY 2022 Report must include the following:

1. Identify each performance indicator with non-comparable results from 

FY 2019 through FY 2022;

2. Explain why results are not directly comparable from FY 2019 through 

FY 2022; and

3. Address the lack of comparability by explaining either of the following:

a. How to compare results from FY 2019 through FY 2022 between the 

current and former methodologies; or

b. Why making this comparison is not feasible.

The FY 2022 Report must include all information necessary to evaluate compliance with 

39 U.S.C. § 2804. Inclusion of this information in the FY 2022 Report may be satisfied by 

either: (1) including the information itself in the text of the FY 2022 Report; or (2) including 

34 The Commission acknowledges that the FY 2021 Report includes a footnote with a cross-reference to other documents filed in the ACR 

proceeding pertaining to the High-Quality Service performance indicators. However, the FY 2021 Report lacks any reference to the FY 2021 ACR 

discussion of the non-comparability of the CCC results. See FY 2021 Report at 33 n.1 (“The Postal Service is providing nonpublic service 

performance data for certain competitive products as part of the Nonpublic Annex in the Annual Compliance Report proceeding conducted by 

the Postal Regulatory Commission (PRC)).”
Analysis of FY 2021 Performance Report Compliance with Legal Requirements

and FY 2022 Performance Plan

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cross-references identifying the documents containing this information in the text of the 

FY 2022 Report.

Appendix B contains guidance to assist the Postal Service’s efforts to comply with 

section 2804(c) and other statutory requirements for the FY 2022 Report. The 

requirements apply to each performance indicator used in FY 2022.

c. Goals Not Met

In FY 2021, the Postal Service met the Financial Health performance goal and partially met 

the High-Quality Service, Excellent Customer Experience, and Safe Workplace and Engaged 

Workforce goals. See Chapter I, Section B.1., supra. If a performance goal has not been met, 

the annual performance report must explain why the Postal Service did not meet the goal 

and describe the plans and schedules for achieving the goal. 39 U.S.C. § 2804(d)(3). The FY 

2021 Report explains why it did not meet the High-Quality Service, Excellent Customer 

Experience, and Safe Workplace and Engaged Workforce performance goals. FY 2021 

Annual Report at 34-35, 38-39, 44. It also describes plans and schedules for meeting FY 

2022 targets for each public performance indicator that did not meet its FY 2021 target. See 

id. at 35-36, 40, 44-45. The Postal Service provides more detailed explanations, plans, and 

schedules in the FY 2021 ACR. FY 2021 ACR at 61-72.

The Commission finds that the FY 2021 Report complies with 39 U.S.C. § 2804(d)(3) for each 

public performance indicator because it explains why performance goals were not met and 

describes plans and schedules for meeting the goals in FY 2022. To comply with 39 U.S.C. 

§ 2804(d)(3) next year, for each FY 2022 target that is not met, the FY 2022 Report must both 

explain why and describe plans and schedules for meeting FY 2023 targets.

d. Other Annual Performance Report Requirements

The FY 2021 Report meets other requirements of 39 U.S.C. § 2804. First, the annual 

performance report must review the Postal Service’s success in achieving its performance 

goals by stating whether the Postal Service met targets for each performance indicator in 

FY 2021. 39 U.S.C. § 2804(d)(1). The FY 2021 Report provides this information in tables 

that compare targets and results and state whether the target was met. See FY 2021 Annual 

Report at 33-34, 38, 42-44, 48. These tables enhance the FY 2021 Report by allowing the 

reader to easily evaluate whether the Postal Service met targets.

Second, the annual performance report must “evaluate the performance plan for the 

current fiscal year relative to the performance achieved towards the performance goals in 

the fiscal year covered by the report[.]” 39 U.S.C. § 2804(d)(2). Section 2804(d)(2) requires 

the FY 2021 Report to evaluate the FY 2022 Plan relative to the performance achieved 

toward the performance goals during FY 2021. This provision requires the FY 2021 Report

to compare FY 2022 targets with FY 2021 results for each performance indicator the Postal 
Analysis of FY 2021 Performance Report Compliance with Legal Requirements

and FY 2022 Performance Plan

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Service will use during FY 2022. See FY 2016 Analysis at 15. The FY 2021 Report provides 

this information in a master table listing FY 2021 and FY 2022 targets, as well as results 

from FY 2018 through FY 2021. See FY 2021 Annual Report at 33.

Third, the annual performance report must “include the summary findings of those 

program evaluations completed during the fiscal year covered by the report.” 39 U.S.C. 

§ 2804(d)(4). “Program evaluations” are “assessment[s], through objective measurement 

and systematic analysis, of the manner and extent to which Postal Service programs 

achieve intended objectives.” Id. § 2801(6). Section 2804(d)(4) requires the FY 2021 Report

to include summary findings of program evaluations completed during FY 2021 that 

evaluate how programs helped the Postal Service meet targets in FY 2021. See FY 2017 

Analysis at 16. The FY 2021 Report meets this requirement by, for example, including 

summary findings of a program evaluation describing how the Postal Service met the 

FY 2021 target for the Total Accident Rate performance indicator. See FY 2021 Annual 

Report at 42. The FY 2021 Report states that the Postal Service targeted poor performance, 

developed strategies for reducing accidents, and conducted nearly 2.7 million workplace 

and driver observations. Id.

The Commission finds that the FY 2021 Report complies with 39 U.S.C. §§ 2804(d)(1), (2), 

and (4).

3. Non-Public Performance Indicators

The annual performance plan may include a non-public annex covering program activities 

or parts of program activities relating to the avoidance of interference with criminal 

prosecution or matters otherwise exempt from public disclosure under 39 U.S.C. § 410(c). 

39 U.S.C. § 2803(d). In FY 2021, the Postal Service measured progress toward the HighQuality Service performance goal using two non-public performance indicators for 

Competitive products. FY 2020 Analysis at 31. To comply with 39 U.S.C. §§ 2803 and 2804 in 

FY 2021, the FY 2020 Analysis directed the Postal Service to file under seal with the 

FY 2021 ACR: “(1) FY 2021 and FY 2022 targets; (2) comparable FY 2021 targets and 

results; and (3) comparable results from FYs 2018 through 2021” for each non-public 

performance indicator. Id. at 32. The Commission further stated that “[i]f the Postal Service 

does not meet one or both of the FY 2021 targets, the Postal Service must explain why and 

describe the plans and schedules for meeting the FY 2022 target(s).” Id. The Commission 

stated that the “FY 2021 ACR should continue to identify the library reference that contains 

this information.” Id.

The FY 2022 Plan and FY 2021 Report identify that the Postal Service is providing nonpublic service performance data for certain Competitive products as part of the non-public 

annex of the ACR. FY 2021 Annual Report at 33 n.1. The Postal Service filed information on 

non-public performance indicators in the preface to Library Reference USPS-FY21-NP30 
Analysis of FY 2021 Performance Report Compliance with Legal Requirements

and FY 2022 Performance Plan

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and identified this library reference in the FY 2021 ACR.35 The Postal Service confirms that 

for each non-public performance indicator, the FY 2021 Report contains comparable 

FY 2021 targets and results, as well as comparable results from FY 2018 through FY 2021. 

Response to CHIR No. 4, questions 3.a., d. For each non-public performance indicator that 

did not meet the FY 2021 target, the Postal Service provides an explanation. Library 

Reference USPS-FY21-NP30, Preface at 8-9. The Postal Service set FY 2022 target(s) for the 

Competitive products’ non-public performance indicator(s) the Postal Service will use in 

FY 2022. Id. at 8.

The Commission finds that Library Reference USPS-FY21-NP30 complies with the 

Commission’s directive to file under seal with the FY 2021 ACR: (1) FY 2021 and FY 2022 

targets; (2) comparable FY 2021 targets and results; and (3) comparable results from 

FY 2018 through FY 2021 for each non-public performance indicator. The FY 2022 Plan 

complies with 39 U.S.C. § 2803 by setting measurable FY 2022 target(s) for each non-public 

performance indicator the Postal Service will use in FY 2022. See Section B.1., supra. The 

FY 2021 Report complies with 39 U.S.C. § 2804(b)(1) and 2804(c) because it provides 

comparable FY 2021 targets and results as well as comparable results from the past 3 fiscal 

years. See Sections B.2.a., b., supra. The FY 2021 Report also complies with 39 U.S.C. § 

2804(d)(3) because the Postal Service explains why it did not meet FY 2021 targets.

To ensure that the FY 2023 Plan and FY 2022 Report comply with 39 U.S.C. §§ 2803 and 2804, 

respectively, the Commission recommends that the FY 2022 Report explain where the nonpublic service performance information can be found, such as in a footnote in the master table 

of targets and results. For the new Competitive products’ non-public performance 

indicator(s), the Postal Service must file under seal with the FY 2022 ACR: (1) FY 2022 and 

FY 2023 targets; (2) comparable FY 2022 targets and results; and (3) comparable results 

from FY 2019 through FY 2022. If the Postal Service does not meet the FY 2022 target(s), the 

Postal Service must explain why and describe the plans and schedules for meeting the FY 2023 

target(s). The FY 2022 ACR should continue to identify the library reference that contains this 

information.

4. FY 2022 Performance Indicator Changes

The Commission previously recommended that the Postal Service describe any 

performance indicator or methodology changes in the Annual Report to Congress and 

analyze the impact of methodology changes on results. See FY 2016 Analysis at 18. The 

Commission also recommended that the Postal Service provide the rationale for making 

these changes. FY 2020 Analysis at 33.

35 Library Reference USPS-FY21-NP30, Preface at 7-9; FY 2021 ACR at 4 n.4.
Analysis of FY 2021 Performance Report Compliance with Legal Requirements

and FY 2022 Performance Plan

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As previously discussed, in FY 2021 the Postal Service changed the methodology for 

calculating the CCC performance indicator result, which also affected the CX Composite 

Index. See Section B.2.b., supra. Also, in FY 2022, the Postal Service is changing the 

performance indicator for measuring workforce engagement from the Survey Response 

Rate to the Grand Mean Engagement Score.36

The Postal Service adopted the Commission’s recommendation to limit the number of 

changes to performance indicators and methodologies for calculating targets and results. 

See FY 2020 Analysis at 33. Describing and explaining the rationale for these changes 

provides greater transparency into the Postal Service’s process for changing performance 

indicators and methodologies.

To ensure meaningful comparisons across fiscal years, the Commission recommends that the 

Postal Service continue to limit the number of changes to performance indicators and 

methodologies for calculating targets and results. If the Postal Service plans to add or change 

any performance indicators or methodologies, the Commission recommends that the Annual 

Report to Congress describe these changes, provide the rationale for making them, and 

analyze the impact of these changes on results. To help ensure compliance with 39 U.S.C. § 

2804(c), the Commission recommends that the Postal Service employ a performance indicator 

or methodology change for at least 3 consecutive fiscal years before revising it unless the 

change is clearly not beneficial or effective.

36 FY 2021 Annual Report at 44-45. These metrics are discussed in Chapter III, Section C., infra.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

and FY 2022 Performance Plan

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CHAPTER III: EVALUATION OF

PERFORMANCE GOALS

In this chapter, the Commission discusses each performance goal individually. It evaluates 

whether the Postal Service met the performance goals in FY 2021 as required by 39 U.S.C. 

§ 3653(d). The Commission also makes related observations and recommendations for 

each performance goal.

A. High-Quality Service

1. Background

In FY 2021, the Postal Service measured service performance using internal SPM, which

provides data from the time a mailpiece is first scanned (either at the collection point by 

the carrier or during the first processing operation on mail processing equipment) to the 

time when the carrier scans the mailpiece at the delivery point. See FY 2021 Annual Report

at 34. For most Market Dominant products, the Postal Service sets a service standard for 

the number of days allowed for delivery of a mailpiece considered to be on-time. Service 

performance results are expressed as the percentage of mail meeting the applicable 

service standard.

The Postal Service uses the percentage of selected and combined mail products delivered 

on-time to assess whether its performance meets the High-Quality Service performance 

goal.37 To evaluate progress toward the High-Quality Service performance goal in FY 2021, 

the Postal Service used eight public performance indicators measuring service 

performance for Market Dominant products:

• Single-Piece First-Class Mail, 2-Day

• Single-Piece First-Class Mail, 3-5-Day

• Presorted First-Class Mail, Overnight

• Presorted First-Class Mail, 2-Day

37 The Postal Service also reports service performance on all Market Dominant products in the ACR. 39 U.S.C. § 3652(a)(2)(B)(i). Service

performance measurement reporting in the ACR is independent of service performance measurement reporting in annual performance plans 

and annual performance reports under 39 U.S.C. §§ 2803 and 2804. The reporting of these service performance measurements in the FY 2021 

Annual Report does not meet the same class- or group-specific granular reporting criteria as the service performance measurements required 

in the Commission’s rules for purposes of the ACR. See 39 C.F.R. §§ 3055.20 through 3055.24. For instance, the Single-Piece First-Class Mail 

and the Presorted First-Class Mail performance indicators in the FY 2021 Annual Report combine service performance results for different 

products. By contrast, the ACR requires the Postal Service to disaggregate service performance results by mail subject to the Overnight, 2-Day, 

or 3-5-Day service standards by First-Class Mail product. See, e.g., 39 C.F.R. § 3055.20(a).
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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• Presorted First-Class Mail, 3-5-Day

• First-Class Mail Letter and Flat (FCLF) Composite

• USPS Marketing Mail and Periodicals Composite

• Market Dominant Composite

The Single-Piece First-Class Mail performance indicators measure the performance of 

Single-Piece First-Class Mail letters, postcards, and flats throughout the fiscal year. 

FY 2021 Annual Report at 34. Results are expressed as the estimated percentage of 

Single-Piece First-Class Mail by service standard (2-Day and 3-5-Day) delivered on-time. 

Id.

The Presorted First-Class Mail performance indicators measure the performance of 

commercial Presorted First-Class Mail letters, postcards, and flats delivered throughout 

the fiscal year. Id. Results are expressed as the estimated percentage of total Presorted 

First-Class Mail delivered on-time by service standard (Overnight, 2-Day, and 3-5-Day). Id.

The FCLF Composite performance indicator measures the weighted average of the 

performance of Single-Piece First-Class Mail and Presorted First-Class Mail across all 

service standards, weighted by volume. Id.

The USPS Marketing Mail and Periodicals Composite performance indicator measures the 

percentage of all USPS Marketing Mail and Periodicals mailpieces that were delivered 

within the applicable service standard during the fiscal year. Id. This performance 

indicator is a composite measuring USPS Marketing Mail letters and flats, as well as 

Periodicals. Id. Approximately two-thirds of the volume in this composite indicator 

consists of USPS Marketing Mail letters; the remainder is made up of USPS Marketing Mail 

flats and Periodicals. Id.

The Market Dominant Composite is a new performance indicator used for the first time in 

FY 2021. It is a composite indicator measuring the percentage of First-Class Mail, USPS 

Marketing Mail, Periodicals, and Bound Printed Matter letters and flats, as well as USPS 

Marketing Mail, Media Mail/Library Mail, and Bound Printed Matter parcels, that were 

delivered within their applicable service standards during the fiscal year. Id.; Response to 

CHIR No. 28, question 1, Excel file “ChIR No.28 Response.Attachment.xlsx.” Approximately 

97 percent of the volume in this composite indicator consists of First-Class Mail and USPS 

Marketing Mail letters and flats; the remainder is made up of Periodicals and Bound 

Printed Matter flats and USPS Marketing Mail, Media Mail/Library Mail, and Bound 

Printed Matter parcels. Response to CHIR No. 28, question 1, Excel file “ChIR No.28 

Response.Attachment.xlsx.”

In FY 2021, the Postal Service also used one non-public performance indicator to measure 

service performance for Competitive products. See Chapter II, Section B.3., supra. The 
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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Postal Service announced, at the time of filing the FY 2020 Annual Report, that in FY 2021 

it would begin using this new performance indicator as its sole performance indicator for 

Competitive products.38 The new performance indicator aggregates Competitive products’ 

data at a higher level compared to the non-public performance indicators used previously.

The Postal Service filed results from FY 2017 through FY 2021 for this non-public 

performance indicator, as well as for the legacy performance indicators for Competitive 

products, in a library reference. Library Reference USPS-FY21-NP30, Preface at 8. The 

Postal Service states that it will continue to use this non-public performance indicator to 

measure service performance for Competitive products in FY 2022. Id.

In FY 2021, the Postal Service met only one of its targets for the public Market Dominant 

performance indicators—the Marketing Mail and Periodicals Composite. FY 2021 Annual 

Report at 34. Additionally, the Postal Service also failed to meet its FY 2021 target for the 

non-public Competitive products performance indicator.39

The Postal Service explains that four main variables negatively affected service 

performance in FY 2021: poor peak season performance, employee absenteeism, reduced 

supplier capacity, and weather and natural disaster disruptions. FY 2021 Annual Report

at 35. Explanations for missing FY 2021 targets are discussed in more detail below. See

Section A.3.b., infra.

Despite failing to achieve most of its targets, the Postal Service highlights as positive its 

performance with respect to Election Mail in FY 2021 associated with the calendar year 

(CY) 2020 primary and general election cycle. Id. The Postal Service stated that 

“extraordinary measures to ensure Election Mail [was] prioritized and delivered on-time 

[were] instituted[,]” including “expedited handling of all election mail irrespective of mail 

class or postage paid, extra deliveries when needed and special pickups to deliver blank 

ballots to voters or completed ballots to boards of elections.” FY 2020 Annual Report at 36. 

The Postal Service states that “[t]hroughout the enterprise, ballots were prioritized in 

processing operations and regular sweeps were conducted in facilities to ensure ballots 

were quickly moving through the system.” FY 2021 Annual Report at 35. In addition, the 

Postal Service states that:

The organization added extra transportation, staff, and overtime to 

support these efforts. Letter carriers checked all mailboxes on their 

route, regardless of inbound or outbound mail, for ballots. Mail was 

collected and processed on the Sunday before the election, and mail 

at risk of being delivered late was prioritized and routed to the 

express network at no extra charge. These extraordinary efforts 

38 Docket No. ACR2020, Library Reference USPS-FY20-NP30, December 29, 2020, file “NONPUBLIC Preface USPS-FY20-NP30.pdf,” at 4; see also 

Docket No. ACR2020, Library Reference USPS-FY20-NP30, May 14, 2021, file “NONPUBLIC Preface USPS-FY20-NP30.Rev.5.14.2021,” at 4.

39 Compare Docket No. ACR2020, Library Reference USPS-FY20-NP30, file “NONPUBLIC Preface USPS-FY20-NP30.pdf,” at 4, and Docket 

No. ACR2020, Library Reference USPS-FY20-NP30, file “NONPUBLIC Preface USPS-FY20-NP30.Rev.5.14.2021,” at 4, with Library Reference 

USPS-FY21-NP30, Preface at 8.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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resulted in a successful election mail performance and reinforced 

the Postal Service’s commitment to providing high-quality service.

Id.

Multiple preliminary injunctions were issued by federal courts against the Postal Service 

in September and October 2020. On September 21, 2020, the United States District Court 

for the Southern District of New York issued a preliminary injunction requiring the Postal 

Service to develop a guidance memorandum concerning its treatment of Election Mail.40

Following the issuance of a preliminary injunction, on September 21, 2020, the Postal 

Service management disseminated written clarification to address confusion about 

overtime, hiring, retail hours, collection boxes, late and extra trips, mail processing, and 

Election Mail. On September 25, 2020, Postal Service management disseminated another 

written memorandum across the nation clarifying its operational instructions concerning 

its treatment of Election Mail and describing the additional resources that the Postal 

Service would dedicate to delivery of Election Mail beginning on October 1, 2020.41

40 On September 17, 2020, the first nationwide preliminary injunction was issued requiring the Postal Service to discontinue implementation 

or enforcement of the changes to the late and extra trips policy announced in July 2020. See Washington v. Trump, 487 F. Supp. 3d 976, 984-

85, order clarified, No. 1:20-CV-03127-SAB, 2020 WL 6588502 (E.D. Wash. Oct. 20, 2020), and appeal dismissed, No. 20-36047, 2021 WL 

824476 (9th Cir. Jan. 26, 2021). Several other federal courts also issued similar preliminary injunctions on related claims in late September 

through October 2020. See Jones v. United States Postal Serv., 488 F. Supp. 3d 103, 141-43 (S.D.N.Y. 2020), order clarified, No. 20 Civ. 6516 

(VM), 2020 WL 6554904 (S.D.N.Y. Sept. 29, 2020); New York v. Trump, 490 F. Supp. 3d 225, 231, 245 (D.D.C. 2020), order clarified, No. 20-CV2340(EGS), 2020 WL 6572675 (D.D.C. Oct. 22, 2020), appeal dismissed, No. 20-5352, 2021 WL 672390 (D.C. Cir. Feb. 10, 2021), and appeal 

dismissed, No. 20-5352, 2021 WL 672390 (D.C. Cir. Feb. 10, 2021), and opinion clarified, No. 20-CV-2340(EGS), 2021 WL 7908123 (D.D.C. Apr. 

3, 2021), and opinion clarified sub nom. New York v. Biden, No. CV 20-2340(EGS), 2021 WL 7908124 (D.D.C. Aug. 23, 2021); Commonwealth of 

Penn. v. DeJoy, 490 F. Supp. 3d 833, 844, 891-92 (E.D. Pa. 2020), order clarified, No. CV 20-4096, 2020 WL 6580462 (E.D. Pa. Oct. 9, 2020); Vote 

Forward v. DeJoy, 490 F. Supp. 3d 110, 115, 131-32 (D.D.C. 2020), appeal dismissed sub nom. Forward v. DeJoy, No. 20-5353, 2021 WL 672395 

(D.C. Cir. Feb. 10, 2021); Nat’l Ass'n for Advancement of Colored People v. United States Postal Serv., 496 F. Supp. 3d 1, 5 (D.D.C. 2020), 

enforcement granted, No. 20-CV-2295 (EGS), 2020 WL 6441317 (D.D.C. Oct. 27, 2020), and appeal dismissed, No. 20-5375, 2021 WL 672392 

(D.C. Cir. Feb. 10, 2021). The Postal Service initially appealed these cases; however, the courts granted the Postal Service’s unopposed 

voluntary motions to dismiss its appeals. See, e.g., Nat’l Ass'n for Advancement of Colored People v. United States Postal Serv., 2021 WL 

672392, at *1 (D.C. Cir. Feb. 10, 2021). Subsequently, several of the cases in the district courts have been settled and voluntarily dismissed. 

See Washington v. Trump, No. 1:20-CV-03127-SAB, Order Closing File, ECF Document #131, at 2 (E.D. Wash. Feb. 17, 2021); Jones v. United 

States Postal Serv., No. 20 Civ. 6516 (VM), Stipulation and Order of Settlement and Dismissal, ECF Document #124, at 1-3 (S.D.N.Y. May 13, 

2021); Commonwealth of Penn. v. DeJoy, Civ. A. No. 20-4096, Order, ECF #192, at 1 (E.D. Pa. May 17, 2022); Vote Forward v. DeJoy, Civ. A. No. 

20-2405 (EGS), Notice of Voluntary Dismissal Pursuant to Federal Rule of Civil Procedure 41, ECF Document #184, at 1 (D.D.C. May 24, 2021); 

National Ass'n for Advancement of Colored People v. United States Postal Serv., No. 20-CV-2295(EGS), Minute Order, (D.D.C. Dec. 20, 2021). 

The Postal Service maintains that it committed no wrongdoing and has agreed to engage in specific outreach and communication related to 

future elections. See generally National Ass'n for Advancement of Colored People v. United States Postal Serv., No. 20-CV-2295(EGS), 

Stipulation of Settlement and Proposed Order, ECF #170 (D.D.C. Dec. 17, 2021) (adopted by subsequent Minute Order); Commonwealth of 

Penn. v. DeJoy, Civ. A. No. 20-4096, Ex. A Settlement Agreement, ECF #190-1 (E.D. Pa. May 17, 2022) (adopted by subsequent Order). The 

preliminary injunction granted in New York v. Trump, has been further clarified sub nom. New York v. Biden to reflect that the Postal Service is 

not prohibited “from declining approval for extra network trips pursuant to the following principles: (1) where an extra trip would not be 

service responsive, and (2) where not using an extra trip would delay a volume of mail that is no greater than 15% of the truck’s total 

capacity.” New York v. Biden, No. 20-CV-2340(EGS), 2021 WL 7908124, at *5 (D.D.C. Aug. 23, 2021).

41 United States Department of Justice, September 25, 2020 Letter, Jones v. United States Postal Serv., No. 20 Civ. 6516 (VM), ECF Document 

#58 (describing that the Postal Service issued the memoranda on September 21, 2020 and September 25, 2020); Memorandum from the 

United States Postal Service, Chief Retail and Delivery and Chief Logistics and Processing Operations to Officers, PCES [Postal Career Executive 

Service], and Pay Band Managers, Clarifying Operational Instructions, September 21, 2020, ECF Document #58-4; Memorandum from United 

States Postal Service, Chief Retail and Delivery and Chief Logistics and Processing Operations to Officers, PCES [Postal Career Executive 

Service], and Pay Band Managers, Additional Resources for Election Mail Beginning October 1, September 25, 2020, ECF Document #58-5.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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The Postal Service asserts that service performance for Election Mail was strong. The 

Postal Service delivered more than 135 million ballots;42 combined exceeding 4.6 billion 

pieces—a 114 percent increase over the CY 2016 election cycle. FY 2021 Annual Report at 

22, 35. The Postal Service reports that 97.9 percent of ballots were delivered from voters 

to election officials within 3 days, and 99.89 percent were delivered within 7 days. Id. at 

35. On average, ballots were delivered to voters in 2.1 days and were returned from voters 

to election officials in 1.6 days. Id. at 22.

The Commission commends the Postal Service for the additional resources devoted—such as 

extra transportation and overtime—and heightened measures undertaken to deliver 

Election Mail and Political Mail during the CY 2020 election cycle.43 These efforts were 

undertaken notwithstanding the adverse effects of the COVID-19 pandemic, in furtherance of 

the vital role the Postal Service plays in the American democratic process.

To improve High-Quality Service in FY 2022, the Postal Service reports that it plans to 

continue implementing its 10-Year Strategic Plan.44 To that end, the Postal Service intends 

to establish site-specific operating plans, complete the installation of new package sorting 

machines, and complete its processing network redesign, which will expand surface 

transfer centers (STCs). FY 2021 Annual Report at 36. The Postal Service states that it 

proactively planned for the FY 2022 peak season, including hiring full-time and seasonal 

personnel, expanding the Postal Service’s facility footprint, and installing new processing 

equipment. Id. The Postal Service reports that at the beginning of FY 2022, it implemented 

service standard changes for First-Class Mail and Periodicals which the Postal Service 

asserts will “increase delivery reliability, consistency, and efficiency for customers.” Id. 

These changes increased service standards by up to two additional days for First-Class 

Mail and Periodicals mailpieces travelling longer distances.45 Prior to implementation, the 

Postal Service estimated that approximately 38.5 percent of First-Class Mail volume and 

approximately 7 percent of Periodicals volume would be affected by the changes. Id. The 

Postal Service also states that for FY 2022 it has reconstituted the Election Mail Committee 

to oversee, review, and monitor the Postal Service’s preparations for the CY 2022 primary 

and general elections. FY 2021 Annual Report at 36. The Postal Service is increasing 

42 The Commission uses the term “Election Mail” to refer to any item mailed to or from authorized election officials that enables citizens to 

participate in the voting process, such as balloting materials, voter registration cards, absentee applications, and polling place notifications, 

and uses the term “Political Mail” to refer to any item mailed for campaign purposes by a registered political candidate, campaign committee 

or committee of a political party, political action committee, or organization engaging in issue advocacy or voter mobilization. See United 

States Postal Service, Postal Bulletin No. 22539, February 13, 2020, at 4, available at https://about.usps.com/postalbulletin/2020/pb22539/pb22539.pdf.

43 See FY 2020 ACD at 134-39; FY 2021 ACD at 119-20; see also United States Postal Service, Office of Inspector General, Report No. 20-318-

R21, Service Performance of Election and Political Mail During the November 2020 General Election, March 25, 2021, available at 

https://www.uspsoig.gov/sites/default/files/document-library-files/2021/20-318-R21.pdf.

44 FY 2021 Annual Report at 36; see United States Postal Service, Delivering for America: Our Vision and Ten-Year Plan to Achieve Financial 

Sustainability and Service Excellence, March 23, 2021, available at https://about.usps.com/what/strategic-plans/delivering-foramerica/assets/USPS_Delivering-For-America.pdf (10-Year Strategic Plan).

45 See generally Docket No. N2021-1, Advisory Opinion on Service Changes Associated with First-Class Mail and Periodicals, July 20, 2021, at 1-

2 (Docket No. N2021-1 Advisory Opinion).
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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interim targets for all High-Quality Service performance indicators in FY 2022. Id. at 35-

36. The Postal Service’s plans are discussed in detail in Section A.3.c., infra.

2. Comments

The Public Representative observes that “the Postal Service failed to meet all its 

targets...except for the Marketing Mail and Periodicals Composite[,]” and “[f]or the fourth 

year in a row, the Postal Service’s performance declined in every category.” PR Comments 

at 4. She notes that “[a]s in previous years, the highest gap between actual service and the 

applicable target is observed for the Three-to-Five-Day delivery standard for Single-Piece 

First-Class Mail.” Id. She takes the position that “[b]ecause the Postal Service missed nearly 

all of its...targets...in FY 2021...[it] did not meet its Deliver High-Quality Service 

performance goal.” Id.

PostCom comments that “the Postal Service failed to meet service standards for most of its 

market dominant products during FY 2021 despite waiting until well into FY 2021 to 

create service targets.” PostCom Comments at 2. PostCom asserts that the one 

performance indicator that the Postal Service did achieve its target for—the Marketing 

Mail and Periodicals Composite—is “an amalgam of different products with markedly 

different customers, service standards, and uses[,]” the purpose of which “appears to be to 

obscure how truly poor service performance on Periodicals...has been.” Id.

PostCom maintains that service performance is worse than the reported High-Quality 

Service performance indicator scores suggest and is obscured by the fact that: (1) the 

performance indicators are highly aggregated; (2) compliance with service standards is 

only measured from the time a mailpiece has an acceptance scan, thus not reflecting any 

delays in unloading; and (3) mailpieces are excluded from measurement for various 

reasons, including getting lost in the network. Id. at 3-5. PostCom also asserts that “[l]ate 

in FY 2020, the Postal Service implemented structural changes in its field operations that 

will further reduce the amount and specificity of service reporting information.” Id. at 5. 

PostCom states that given the greater availability of performance data now compared to 

when the PAEA was enacted, “the Commission’s continued reliance on quarterly data that 

is highly aggregated and edited by the Postal Service is a disservice to the mailers.” Id. at 5, 

6. Furthermore, PostCom states that “[t]he current classification schedule, largely 

unchanged in [50] years, does not provide a usable framework...” for evaluating service 

performance, because mail classes and products contain disparate types of mailers who 

use the mail differently and have different needs and expectations; thus “[r]eporting at a 

class level obscures differences in performance and hinders a meaningful evaluation of 

service results.” Id. at 5-6. For these reasons, PostCom expresses the opinion that “the ACR 

process has not been effective in driving improved service performance[,]” and “[a] new 

approach is needed.” Id. at 4. PostCom asserts that “[t]o help increase the proportion of 

mail that is measured, the Postal Service should make available piece-level data for pieces 

that are excluded from measurement.” Id.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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PostCom notes that none of the High-Quality Service performance indicator on-time 

targets for FY 2022 are set at or above 95 percent, despite 95 percent on-time delivery 

being the stated long-term goal of the Postal Service’s 10-Year Strategic Plan. Id. at 6. 

PostCom asserts that “[t]he Commission must demonstrate some willingness to hold the 

Postal Service accountable for providing the level of service that customers pay for.” Id.

While PostCom states that it finds the FY 2022 targets more realistic than targets in 

previous years, PostCom nevertheless asserts that the FY 2022 targets “still reflect an 

apparent effort to craft a pleasing narrative rather than achieve improved performance.” 

Id. at 6-7.

PostCom notes that FY 2022 performance indicator scores will be based on reduced 

service standards for First-Class Mail and Periodicals due to the service standard revisions 

implemented at the beginning of FY 2022, and it states that, as a result, comparisons with 

prior years “will present a distorted picture of service performance changes.” Id. at 2.

PostCom asserts that “[w]hile the Commission might lack the authority necessary to 

prohibit degradation of service standards, the Commission must require that the Postal 

Service report on service performance for [M]arket [D]ominant products relative to the 

standards in place [prior to FY 2022].” Id.

In its reply comments, the Postal Service argues that in evaluating High-Quality Service 

results for FY 2021 two overarching considerations must be taken into account: (1) 

service performance in FY 2021 was undeniably impacted by the effects of the COVID-19 

pandemic, and service performance improved over the course of the fiscal year as the 

Postal Service worked to overcome those negative effects; and (2) during FY 2021 the 

Postal Service published its 10-Year Strategic Plan, which “sets forth a comprehensive and 

balanced set of initiatives to address the Postal Service’s long-standing financial, service, 

and operational challenges.” Postal Service Reply Comments at 1-2.

With respect to PostCom’s criticisms of the Postal Service’s composite performance 

indicators, the Postal Service disputes that the purpose of the composites is to obscure 

results. Id. at 4. The Postal Service maintains that composites constitute only an additional 

metric on top of the disaggregated service performance reporting that the Postal Service 

provides pursuant to 39 C.F.R. part 3055. Id. at 4-5. With respect to PostCom’s comments 

concerning the desirability of more granular levels of service performance reporting, the 

Postal Service responds that there are sound reasons for the class groupings that currently 

exist, including the “need[ ] to ensure that...measurement and reporting remain 

statistically accurate, reliable, and representative....” Id. at 5. With respect to PostCom’s 

comment that quarterly service performance data are filed weeks after the end of each 

quarter and are highly edited, the Postal Service responds that PostCom offers no reason 

to question the veracity or completeness of the quarterly data. Id. at 7. The Postal Service 

maintains that it provides all of the data required by the Commission; the timing of the 

quarterly data reporting is consistent with the Commission’s rules, which provide for a 40-

day period following the end of the quarter; and that the 40-day period is necessary to 
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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provide the Postal Service with sufficient time to gather the relevant data and ensure that 

they are final and accurate. Id.

The Postal Service disputes the assertion that service performance measurement does not 

account for delays in unloading, asserting that business rules do account for such delays. 

Id. at 5-6. With respect to PostCom’s comments concerning the effects of structural 

changes in field operations on service performance reporting, the Postal Service responds 

that for FY 2021, the Postal Service continued to report results using the legacy 

operational structure. Id. at 3-4. The Postal Service maintains that even if that were not the 

case, changes to its geographic operational structure do not alter the substance of the 

performance reported, and “[i]t makes little sense to evaluate performance and develop 

improvements using data reflecting outdated operations.” Id. at 4. The Postal Service 

responds to PostCom’s comment that the Postal Service should provide piece-level data on 

mail not in measurement by stating that it already reports quarterly on the amount of mail 

in measurement, and “mailers already have access to piece-level scan data for mail... even 

if not in measurement [ ] through the Postal Service’s Informed Visibility-Mail Tracking 

[and] Reporting tool.” Id. at 6-7. The Postal Service argues that given the extensive data 

collection and reporting that the Postal Service already performs, additional reporting is 

unnecessary and would be counterproductive. Id.

With respect to PostCom’s comments concerning FY 2022 performance indicator targets, 

the Postal Service responds that, pursuant to its 10-Year Strategic Plan, it intends to 

transition to 95 percent on-time targets over several years as it implements the necessary 

infrastructure and network changes. Id. at 3.

Finally, the Postal Service argues that any requests for the Commission to require the 

Postal Service to take specific actions are beyond the scope of 39 U.S.C. § 3653(d). Id. at 12.

In Section A.3., infra, the Commission addresses issues raised by commenters that are 

relevant to the Commission carrying out its duty under 39 U.S.C. § 3653(d). The 

Commission finds that many of the issues raised by PostCom in its comments fall outside 

the scope of the Commission’s review of the Postal Service’s FY 2021 Annual Report. 

Section 2803 requires the Postal Service to prepare annual performance plans for each 

upcoming fiscal year that, inter alia, “establish performance goals....” and “establish 

performance indicators....” 39 U.S.C. § 2803(a)(1), (4). Section 2804 requires the Postal 

Service to prepare annual performance reports reviewing performance for prior fiscal 

years. 39 U.S.C. § 2804(a)-(b). These reports must, inter alia, “set forth the performance 

indicators established in the...performance plan, along with the actual...performance 

achieved compared with the performance goals expressed in the plan....” 39 U.S.C. 

§ 2804(b)(1). The reports must “include actual results for the three preceding fiscal 

years.” 39 U.S.C. § 2804(c). The reports must “explain and describe, where a performance 

goal has not been met...why the goal was not met[,]” and they must provide “plans and 

schedules for achieving the established performance goal[.]” 39 U.S.C. § 2804(d)(3)(A)-

(B). Each year the Commission is required to “evaluate...whether the Postal Service has 
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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met the goals established under sections 2803 and 2804, and may provide 

recommendations to the Postal Service related to the protection or promotion of public 

policy objectives set out in [Title 39].” 39 U.S.C. § 3653(d).

For purposes of sections 2803 and 2804, then, the PAEA directs the Postal Service to 

establish performance goals and performance indicators (and, by extension, performance 

indicator targets) as part of its annual plan, and to review its performance in achieving its 

performance goals as part of its annual report. The PAEA directs the Commission to 

evaluate whether the Postal Service met the performance goals that the Postal Service 

established in its performance plan and make recommendations to the Postal Service 

related to the protection or promotion of public policy objectives. This is a different 

posture than the one the Commission occupies under 39 U.S.C. § 3653(b)-(c), where the 

Commission is directed as part of its ACD to “determin[e]...whether any service standards 

in effect...were not met[,]” and where the Commission is empowered to take remedial 

action in the case of a finding of noncompliance.

Pursuant to 39 U.S.C. § 3652(a)(2)(B), (d), and (e), the Commission has promulgated 

service performance reporting requirements at 39 C.F.R. part 3055.46 Many of PostCom’s 

comments—particularly those concerning the granularity and frequency of required 

service performance reporting and the reporting of mailpieces excluded from service 

performance measurement—appear to seek changes to these reporting requirements. The 

instant proceeding is not the proper venue for such a request, as its scope is limited to 

evaluating whether the Postal Service met the performance goals established in the Postal 

Service’s annual plan for FY 2021. The Commission is currently considering revisions to 

update these reporting requirements in a rulemaking docket.47 In addition, any interested 

party, including PostCom, may file a petition to “initiate proceedings...to improve the 

quality, accuracy, or completeness of Postal Service data required by the 

Commission...whenever it shall appear that...the quality of service data has become 

significantly inaccurate or can be significantly improved....” See 39 U.S.C. § 3652(e)(2)(B); 

39 C.F.R. § 3050.11. The Commission invites any interested party, including PostCom, to 

submit such a petition if they believe that changes to periodic reporting requirements are 

warranted. Likewise, the proper venue for proposing changes to the current service 

performance measurement systems and/or methodologies, including issues pertaining to 

how time is calculated for purposes of service performance measurement, would be a 

rulemaking proceeding. Any interested party, including PostCom, may file such a petition. 

39 U.S.C. § 3652(e)(2)(B); 39 C.F.R. § 3050.11. The proper venue for comments pertaining 

to the effectiveness of the ACR process is in response to the ACR itself.48

46 See Docket No. RM2009-11, Order Establishing Final Rules Concerning Periodic Reporting of Service Performance Measurements and 

Customer Satisfaction, May 25, 2010 (Order No. 465).

47 See Docket No. RM2022-7, Advance Notice of Proposed Rulemaking to Revise Periodic Reporting of Service Performance, April 26, 2022 

(Order No. 6160).

48 See, e.g., Docket No. ACR2021, Notice of Postal Service’s Filing of Annual Compliance Report and Request for Public Comments, January 3, 

2022 (Order No. 6079).
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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PostCom asserts that “the amount of specificity” of service performance reporting will be 

“further reduce[d]” by structural changes in the Postal Service’s operations implemented 

in FY 2020. PostCom Comments at 5. The changes PostCom refers to involve the 

restructuring of the Postal Service’s field operations and headquarters into three core 

business units: (1) Retail and Delivery Operations; (2) Logistics and Processing 

Operations; and (3) Commerce and Business Solutions. See FY 2020 ACD at 140-41. As the 

Commission has explained, 39 C.F.R. part 3055 subpart B requires the Postal Service to 

provide service performance data at the legacy Postal Administrative Area (Area) and 

District levels; if the Postal Service wishes to have those regulations revised to reflect its 

new organizational structure, then it must file a petition requesting either to change the 

rule(s) and/or for reporting exception(s).49 The Postal Service has indicated that it 

understands this, and that it will submit a petition at a future time.50 If and when the 

Postal Service does file such a petition, PostCom, along with the rest of the public, will 

have the opportunity to comment on the Postal Service’s proposed revisions to the 

reporting requirements. Until such time, service performance reporting should be 

unaffected by the Postal Service’s structural changes.

In order to promote greater transparency and accountability with respect to the Postal 

Service’s service performance, the Commission has been in the process of developing an 

online dashboard with visual data and interactive tools to allow the public to view 

national-level service performance results for many of the Postal Service’s Market 

Dominant mail products (and product levels).51 The United States Postal Service Office of 

Inspector General (OIG) also has an online dashboard with national-, division-, and 

district-level service performance results.52 Moreover, the Postal Service Reform Act of 

2022 (PSRA), which was enacted on April 6, 2022, requires the Postal Service to “develop 

and maintain a publicly available Website with an interactive web-tool that provides 

performance information for market-dominant products that is updated on a weekly 

basis.”53 This dashboard is required to include, among other things, “performance 

information for different geographic areas[,]” “performance information for different time 

periods, including annual, quarterly, monthly, and weekly segments[,]” and “comparisons 

of service performance information for market-dominant products to performance 

information for previous time periods to facilitate identification of performance trends[.]”

Id., § 3692(c)(2)(B)-(D).

49 See Order Granting Extension of Time and Providing Additional Instruction Regarding Future Reports, March 8, 2021 (Order No. 5844).

50 See Responses of the United States Postal Service to Questions 1-29 of Chairman’s Information Request No. 1, January 18, 2022, question 26

(Response to CHIR No. 1).

51 See Docket No. PI2022-2, Notice and Order Providing an Opportunity to Comment on the Service Performance Dashboard, February 10, 

2022 (Order No. 6104). The beta version of the Commission’s online dashboard can be accessed at https://www.prc.gov/dash-deploy.

52 The OIG dashboard can be accessed at https://www.uspsoig.gov/service-performance.

53 See Postal Service Reform Act of 2022 § 3692(c)(1), Pub. L. 117-108, 136 Stat. 1127, 1145 (April 6, 2022).
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

and FY 2022 Performance Plan

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Under the PSRA, the Postal Service is required each fiscal year, within 60 days of the 

beginning of the fiscal year, to provide the Commission with service performance targets 

for the upcoming fiscal year. Id., § 3692(a)(1). Within 90 days of the Commission’s first 

receipt of service performance targets under § 3692(a)(1), the Commission is required to 

provide the Postal Service with requirements for the Postal Service’s service performance 

dashboard with respect to the dashboard’s organizational structure, geographic coverage, 

granularity, and temporal coverage, as well as recommendations for any corresponding 

modifications to the Postal Service’s service performance measurement systems that the 

Commission finds to be necessary. Id., § 3692(b). The Postal Service is required to release 

the dashboard within 60 days after receiving requirements and recommendations from 

the Commission. Id., § 3692(c)(8). The Commission has initiated a docket to consider, inter 

alia, what specific data should be required for the Postal Service’s service performance 

dashboard, and what, if any, modifications to the Postal Service’s measurement systems 

should be recommended. See Order No. 6160.

3. Commission Analysis

In FY 2021, the Postal Service achieved only one of its targets for the public performance 

indicators related to Market Dominant products that measure progress toward the HighQuality Service performance goal. FY 2021 Annual Report at 34. It also missed its target for 

the sole non-public performance indicator related to Competitive products.54

The Commission finds that the High-Quality Service performance goal was partially met in 

FY 2021, with the Postal Service meeting only a single performance indicator.

Below, the Commission provides observations and recommendations related to the Postal 

Service’s explanations for its failure to meet the High-Quality Service performance goal in 

FY 2021—notably, the continuing COVID-19 pandemic and related network disruptions. 

The Commission also provides discussion and recommendations concerning the Postal 

Service’s plans to meet the High-Quality Service performance goal in FY 2022.

a. Observations on Results and Targets

As an initial matter, the Commission notes that the Postal Service reduced targets in 

FY 2021 for all of the High-Quality Service performance indicators. Prior to FY 2021, ontime targets were historically set in the mid-90s for all performance indicators. In 

FY 2021, they were reduced by anywhere from 2.81 to 26.61 percentage points, as shown 

in Table III-1.

54 Compare Docket No. ACR2020, Library Reference USPS-FY20-NP30, file “NONPUBLIC Preface USPS-FY20-NP30.pdf,” at 4, and Docket No. 

ACR2020, Library Reference USPS-FY20-NP30, file “NONPUBLIC Preface USPS-FY20-NP30.Rev.5.14.2021,” at 4, with Library Reference USPSFY21-NP30, Preface at 8. The Commission notes that the Postal Service would have met its FY 2021 targets under the legacy non-public 

performance indicators for Competitive products that the Postal Service relied on prior to FY 2021. See Library Reference USPS-FY21-NP30, file 

“NONPUBLIC Preface USPS-FY21-NP30.pdf,” at 7-8.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

and FY 2022 Performance Plan

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Table III-1

Public High-Quality Service Performance Indicators

Comparison of Targets

High-Quality Service

Performance Indicators

FY 

2022

FY 

2021

FY 2014

through

FY 2020

Single-Piece

First-Class Mail

2-Day 90.25 87.81 96.50

3-5-Day 90.00 68.64 95.25

Presorted

First-Class Mail

Overnight 94.75 93.99 96.80

2-Day 93.00 89.20 96.50

3-5-Day 90.50 84.11 95.25

First-Class Mail Letter and Flat 

Compositea

91.00 84.88 96.00

USPS Marketing Mail and 

Periodicals Compositea 91.50 86.62 91.80b

Market Dominant Composite 91.25 85.86 N/Ac

a The Postal Service did not begin using First-Class Mail Letter and Flat Composite and USPS Marketing Mail and 

Periodicals Composite until FY 2017. Docket No. ACR2017, Library Reference USPS-FY17-17, December 29, 

2017, file “USPS-FY17.17.Annual Report.pdf,” at 15 (FY 2017 Annual Report).

b The FY 2017 USPS Marketing Mail and Periodicals Composite target was 91.00. Id. at 14.

c The Postal Service did not begin using the Market Dominant Composite as a performance indicator until 

FY 2021. FY 2020 Annual Report at 34.

Source: FY 2021 Annual Report at 33; FY 2020 Annual Report at 33; Docket No. ACR2019, Library Reference 

USPS-FY19-17, December 27, 2019, file “FY19.Annual.Report.USPS.FY19.17.pdf,” at 20 (FY 2019 Annual Report); 

FY 2018 Annual Report at 17; FY 2017 Annual Report at 14; Docket No. ACR2016, Library Reference USPS-FY16-

17, file “FY16.17 2016 Annual Report.pdf,” December 29, 2016, at 15 (FY 2016 Annual Report).

The Postal Service explained the change in targets by stating that, historically, it has been 

unable to meet service targets for most Market Dominant products, and “regulators have 

requested [that] the Postal Service establish realistic targets instead of what were 

determined to be aspirational.” Response to CHIR No. 1, question 24.a. According to the 

Postal Service, its FY 2021 targets were based on historical data and “an operational 

performance improvement factor predicated on known network and operational 

changes.” Id. question 24.b. The Postal Service explained that when the FY 2021 targets 

were established they were expected to be only single-year targets to take into account 

the exceptional circumstances surrounding the COVID-19 pandemic.55 The Postal Service 

asserted that “[t]his was done with an expectation targets would be adjusted upward for 

FY 2022 with the continued implementation of the 10-Year Strategic Plan, which will 

ultimately provide an opportunity for the Postal Service to achieve excellence by meeting 

or exceeding 95 percent on-time delivery.” Response to CHIR No. 6, question 15.a.

55 Responses of the United States Postal Service to Questions 1-15 of Chairman’s Information Request No. 6, February 1, 2022, question 15.a. 

(Response to CHIR No. 6).
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

and FY 2022 Performance Plan

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The Postal Service will be changing all of its performance indicator targets once again in 

FY 2022. FY 2021 Annual Report at 35-36. The Postal Service describes the FY 2022 targets 

as “ambitious” inasmuch as they “greatly exceed[ ] the FY 2021 actuals....” Id. at 36. The 

Postal Service contends that the new targets “reflect the organizational strategic vision 

from the [10-Year Strategic Plan] and will position the Postal Service to achieve 95 percent 

on-time service performance...once the plan is fully implemented.” Id.

It is true, as the Postal Service asserts, that the Commission has in the past recommended 

that the Postal Service “strive to develop targets that balance the need to inspire 

continuous improvement with the importance of being realistic and achievable[,]” and 

which “take into account operational realities....” See, e.g., FY 2019 Analysis at 30. This 

finding has typically been made in the context of arguments by the Postal Service that it 

was unable to achieve performance indicator targets due to network disruptions caused 

by natural disasters and/or industrial accidents, with the Commission emphasizing that “it 

is important that targets not be set so high that they leave the Postal Service with little 

margin for error.” See id. at 28-29. Striking the correct balance between aspiration and 

realism in setting targets is a highly fact- and context-specific undertaking based on 

existing operational realities.

However, while it is important that targets not be so aspirational as to be unachievable, it 

is equally important that they serve to inspire improvement, and that they are not set so 

low as to be unreasonable for purposes of evaluating whether the High-Quality Service 

performance goal was achieved. For a typical fiscal year, a target of 68.64, as the Postal 

Service set for the Single-Piece First-Class Mail 3-5-Day performance indicator, 

approaches the lower bound of what is reasonable. FY 2021 Annual Report at 34. 

Nevertheless, the Commission accepts the Postal Service’s explanation that FY 2021 was a 

highly aberrant year in which the Postal Service’s operations were significantly impacted 

by the COVID-19 pandemic and other exceptional circumstances. The Commission is

satisfied that the targets for FY 2022 have been increased and have been set closer to their 

historic levels.

Due to the implementation of the internal SPM system in FY 2019, the FY 2019 results for 

the public performance indicators were not comparable to prior years, which limited the 

Commission’s ability to analyze changes in High-Quality Service in FY 2019 and FY 2020. 

FY 2020 Analysis at 41. FY 2021 was the third year that High-Quality Service performance 

indicator results were measured using internal SPM, so comparable High-Quality Service 

performance indicator results now exist for 3 years—FY 2019, FY 2020, and FY 2021.

Table III-2 compares FY 2021 performance indicator results with FY 2021 targets and 

shows the percentage point performance gap between the target and the result. It also 

displays the results from FY 2020 and FY 2019.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

and FY 2022 Performance Plan

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Table III-2

Public High-Quality Service Performance Indicators

Comparison of FY 2021 Targets and Results and FY 2019-FY 2020 Results (%)

High-Quality Service 

Performance Indicator

FY 2021 FY 2020 FY 2019 

Target Result Percentage Point 

Performance Gap Result Result

Single-Piece

First-Class Mail

2-Day 87.81 86.44 -1.37 91.47 92.05

3-5-Day 68.64 63.20 -5.44 78.83 80.88

Presorted

First-Class Mail

Overnight 93.99 93.38 -0.61 94.72 95.46

2-Day 89.20 88.29 -0.91 92.77 94.10

3-5-Day 84.11 80.87 -3.24 89.89 91.95

First-Class Mail Letter and Flat 

Composite 84.88 82.69 -2.19 89.73 91.36

USPS Marketing Mail and 

Periodicals Composite 86.62 87.12 +0.50 88.38 88.73

Market Dominant Compositea 85.86 85.30 -0.56 89.00 89.86

 Target Met Target Not Met 

a The Postal Service did not begin using the Market Dominant Composite as a performance indicator until FY 2021. The Postal Service 

provided FY 2020 and FY 2019 results for comparison purposes only. FY 2021 Annual Report at 33 n.4.

Source: FY 2021 Annual Report at 33-34.

As Table III-2 shows, only one of the FY 2021 performance indicator targets was met. As 

has often been the case in the past, the shorter service standard categories came closer to 

their targets than the longer service standard categories. Within First-Class Mail, the 

Presorted categories generally outperformed their Single-Piece analogs. For both 

First-Class Mail and USPS Marketing Mail and their respective composite performance 

indicators, High-Quality Service results declined from FY 2019 to FY 2021. Only the USPS 

Marketing Mail and Periodicals Composite performance indicator achieved its target in 

FY 2021. However, as discussed above, the targets for these indicators were lowered 

considerably for FY 2021. In fact, all the performance indicators in FY 2020 would have 

met their targets if FY 2020 targets had been set at FY 2021 levels. Targets have been 

increased for each performance indicator for FY 2022 to move them incrementally closer 

to the 95 percent on-time level, which is the Postal Service’s stated long-term goal in its 

10-Year Strategic Plan. See 10-Year Strategic Plan at 27.

In recent years, the Commission has looked to quarterly service performance and/or 

performance indicator results to attempt to trace the impact of the COVID-19 pandemic 

and other factors on the Postal Service’s operations.56 Historically, results during the 

second half of a given fiscal year (Quarters 3 and 4) have tended to outperform the first 

half of the fiscal year (Quarters 1 and 2), largely due to seasonal trends. See, e.g., FY 2019 

ACD at 105. However, beginning in FY 2020 that historic pattern was disrupted.

56 See FY 2020 Analysis at 36-37; see also FY 2021 ACD at 145; FY 2020 ACD at 164-65.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

and FY 2022 Performance Plan

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Tables III-3 to III-5 show results for each High-Quality Service performance indicator 

disaggregated by quarter for FY 2019, FY 2020, and FY 2021.

Table III-3

Public High-Quality Service Performance Indicators FY 2019 by Quarter (%)

High-Quality Service

Performance Indicators FY 2019 Targets

FY 2019 Results

Q1 Q2 Q3 Q4

Single-Piece

First-Class Mail

2-Day 96.50 89.53 91.55 93.90 93.97

3-5-Day 95.25 72.11 79.67 86.55 87.78

Presorted

First-Class Mail

Overnight 96.80 94.68 94.80 96.30 96.20

2-Day 96.50 92.79 93.30 95.25 95.27

3-5-Day 95.25 89.90 90.43 93.61 94.10

First-Class Mail Letter and Flat Composite 96.00 88.47 90.33 93.38 93.76

USPS Marketing Mail and Periodicals Composite 91.80 84.57 88.21 90.93 91.79

Market Dominant Compositea N/A N/A N/A N/A N/A

a

The Postal Service did not begin using the Market Dominant Composite as a performance indicator until FY 2021. No targets or quarterly 

results exist for this performance indicator for FY 2019.

Source: FY 2019 Annual Report at 20, 21; Docket No. ACR2020, Responses of the United States Postal Service to Questions 1-17 of Chairman’s 

Information Request No. 24, March 18, 2021, question 5 (Docket No. ACR2020 Response to CHIR No. 24.)
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

and FY 2022 Performance Plan

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Table III-4

Public High-Quality Service Performance Indicators FY 2020 by Quarter (%)

High-Quality Service

Performance Indicators FY 2020 Targets

FY 2020 Results

Q1 Q2 Q3 Q4

Single-Piece

First-Class Mail

2-Day 96.50 91.88 93. 00 92.38 88.24

3-5-Day 95.25 78.18 83.31 81.37 72.06

Presorted

First-Class Mail

Overnight 96.80 94.41 95.87 95.70 92.75

2-Day 96.50 93.50 94.41 93.25 89.64

3-5-Day 95.25 91.25 92.55 90.67 84.63

First-Class Mail Letter and Flat Composite 96.00 90.37 92.18 90.82 85.58

USPS Marketing Mail and Periodicals 

Composite 91.80 88.90 91.18 88.70 85.34

Market Dominant Compositea N/A 89.50 91.66 89.73 85.43

a The Postal Service did not begin using the Market Dominant Composite as a performance indicator until FY 2021. The Postal Service provided 

FY 2020 quarterly results for comparison purposes only. FY 2020 Annual Report at 33 n.5; Docket No. ACR2020, Responses of the United States Postal 

Service to Questions 1-24 of Chairman’s Information Request No. 22, March 9, 2021, questions 23 (Docket No. ACR2020 Response to CHIR No. 22).

Source: FY 2020 Annual Report at 33, 35; Docket No. ACR2020 Response to CHIR No. 22, question 23.

Table III-5

Public High-Quality Service Performance Indicators FY 2021 by Quarter (%)

High-Quality Service

Performance Indicators FY 2021 Targets

FY 2021 Results

Q1 Q2 Q3 Q4

Single-Piece

First-Class Mail

2-Day 87.81 81.60 85.90 90.80 90.90

3-5-Day 68.64 54.60 57.90 73.80 75.10

Presorted

First-Class Mail

Overnight 93.99 91.30 92.70 95.20 94.60

2-Day 89.20 84.70 84.80 92.20 92.30

3-5-Day 84.11 78.00 73.80 85.90 87.00

First-Class Mail Letter and Flat Composite 84.88 78.40 78.10 87.60 88.50

USPS Marketing Mail and Periodicals 

Composite 86.62 83.90 84.50 90.50 91.90

Market Dominant Composite 85.86 81.70 81.60 89.30 90.70

Source: FY 2021 Annual Report at 33, 34; Response to CHIR No. 8, question 3.

In FY 2020, contrary to the normal pattern of seasonal variation, performance indicator 

scores began declining in Quarters 3 and 4, before ultimately reaching a nadir in Quarter 1 

of FY 2021. As the Commission has found previously, the timing of the service 

performance declines in late FY 2020 generally correspond with the onset of the 

COVID-19 pandemic and tend to corroborate the Postal Service’s assertions that the 
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

and FY 2022 Performance Plan

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COVID-19 pandemic significantly affected the Postal Service’s operations.57 Beginning in 

FY 2021 Quarter 2, performance indicator results began to improve, and that pattern 

continued through the end of FY 2021. It remains to be seen, however, whether this 

represents real year-over-year improvement or simply a return to the typical pattern of 

seasonal variation.

In the FY 2020 Analysis, the Commission recommended that the Postal Service discuss how 

combining different Market Dominant products with potentially different service 

performance results affected the FY 2021 result of the Market Dominant Composite 

performance indicator, including by indicating which products’ performance were 

primarily reflected in the results. FY 2020 Analysis at 52-53. The Commission also 

recommended that the Postal Service consider creating composites based strictly on 

product shape or class, “as these may retain the benefits of simplification and focus sought 

by the Postal Service while ensuring that incongruous products are not being compared.” 

Id.

In response to an information request, the Postal Service explained that a product that 

represents more volume has a greater impact on the Market Dominant Composite score 

than a product with lower volume. Response to CHIR No. 8, question 10.a. The Postal 

Service stated that the highest-volume category represented in the Market Dominant 

Composite is USPS Marketing Mail. Id. The Postal Service stated that it “has considered 

creating composites based strictly on product shape but has concluded that because the 

category of shape includes items with varying service standards, a composite score for 

that grouping would be less meaningful.” Id. question 10.c. Therefore, the Postal Service 

“has decided to use more aggregated composites, including the Marketing Mail and 

Periodicals Composite and the Market Dominant Composite[.]” Id. These “are desirable in 

lieu of purely class[ ] based composites, as previous experience has shown them to enable 

the Postal Service to concentrate its focus, streamline reporting, and avoid 

overemphasizing some indicators at the expense of others.” Id.

The Commission continues to have concerns about the use of highly-aggregated 

composites as performance indicators that incorporate disparate mail classes, shapes, and 

products. Whatever merits such composites might have in terms of “concentrating focus” 

and “streamlining reporting,” it is equally true, as the Commission has observed 

previously, that such composites inherently obfuscate results for lower-volume 

components within the composite while simultaneously over-emphasizing the 

performance of components with greater volumes. See, e.g., FY 2020 Analysis at 52. Such 

composites are also subject to being affected by changes in weights arising from changes 

in the mail mix. As a result, such composites do not provide significant insight into the full 

extent to which High-Quality Service is being achieved, which is the relevant inquiry with 

57 See FY 2021 ACD at 160; FY 2020 ACD at 165; FY 2020 Analysis at 36-37. It should be noted, however, that the Postal Service acknowledged

that COVID-19-related operational disruptions were not the sole cause of service declines over this period, which were also attributable, at 

least in part, to Postal Service operational initiatives. See generally FY 2020 ACD at 99-150.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

and FY 2022 Performance Plan

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respect to the High-Quality Service performance goal. The Postal Service argues that “the 

category of shape includes items with varying service standards...[,]” which would render 

“a composite score for that grouping...less meaningful[,]”58 but that is equally true, if not 

more so, with respect to the USPS Marketing Mail and Periodicals and Market Dominant 

Composites. Thus, the Postal Service’s own argument weighs in favor of more granular 

composites, not more aggregated ones.

The Commission continues to recommend that the Postal Service consider developing more 

granular composites based on significant class, shape, and product-level differences between 

mailpieces in terms of service standards and how they are processed and delivered. If the 

Postal Service intends to continue using highly-aggregated composites as performance 

indicators, then the Commission recommends that the Postal Service also develop more 

granular performance indicators, such as it currently uses for First-Class Mail, to supplement 

the highly-aggregated composites. Finally, the Commission also continues to recommend 

that the Postal Service include with each Annual Report supporting workpapers containing 

the inputs for, and the calculation of, the High-Quality Service performance indicator results, 

to the extent that they are not included elsewhere in the ACR filing.

The implementation of the service standard changes for First-Class Mail and Periodicals at 

the beginning of FY 2022 and for First-Class Package Services during FY 2022 Quarter 359

may affect the meaningfulness of comparing High-Quality Service performance indicator 

results for FY 2022 to prior fiscal years. The Commission notes that reports prepared 

pursuant to 39 U.S.C. § 2804 must “include actual results for the three preceding fiscal 

years[,]” and the Commission has previously found that such actual results must be 

comparable across all three preceding fiscal years. 39 U.S.C. § 2804(c); FY 2015 Analysis 

at 17-18. A lack of comparability with respect to performance indicator results makes 

them less valuable to both the Postal Service and the Commission in terms of diagnosing 

progress in addressing service performance issues.

In the FY 2022 Annual Report, the Postal Service should address whether service standard 

changes implemented in FY 2022 impacted the comparability of performance indicator 

results. If comparability has been affected, the Postal Service should propose a way for the 

Commission to compare FY 2022 High-Quality Service performance indicator results to 

results from prior fiscal years. If the Postal Service asserts that comparability is unaffected, 

the Postal Service should fully explain the rationale and supporting basis for this assertion.

58 Response to CHIR No. 8, question 10.c.

59 See United States Postal Service, U.S. Postal Service Implements New First-Class Package Service Standards and Updates Priority Mail Service 

Standards, April 18, 2022, available at https://about.usps.com/newsroom/national-releases/2022/0418-usps-implements-new-first-classpackage-service-standards.htm (announcing implementation date of May 1, 2022). Additionally, the Postal Service announced that it may 

implement its planned changes to service standards for two additional Competitive products, Retail Ground (RG) and Parcel Select Ground 

(PSG), on or after June 19, 2022. See Docket No. N2022-1, United States Postal Service’s Request for an Advisory Opinion on Changes in the 

Nature of Postal Services, March 21, 2022, at 5.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

and FY 2022 Performance Plan

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b. Explanations for Missing Targets in FY 2021

As a general matter, the Commission notes that although the Postal Service discusses four 

reasons for the failure to meet High-Quality Service targets, the Postal Service has 

reported that it is unable to quantify the individual effect of any of these causes on service 

performance results. See, e.g., FY 2021 ACD at 111, 113, 117; Response to CHIR No. 1, 

question 19.b.iii. Furthermore, the Postal Service has reported that it cannot say with any 

specificity what the impact of any given initiative to correct these issues has been. See, e.g., 

FY 2021 ACD at 148, 163, 172, 183. Moreover, comparisons across fiscal years’ data in an 

effort to isolate the effects of individual causes of service performance declines is made 

difficult by the fact that the causes identified by the Postal Service, as well as the Postal 

Service’s various improvement initiatives, have all been occurring at the same time, and as 

a result there has been a lack of ceteris paribus—“all other things being equal”—

conditions.

(1) Poor Peak Season Performance

The Postal Service states that the FY 2021 peak season “was significantly more challenging 

than anticipated.” FY 2021 Annual Report at 35. The Postal Service explains that while it 

plans each fiscal year for the level of increased mail and package volume expected during 

peak season, the Postal Service received a record level of package volume between 

November 2020 and January 2021. Id. This increase in demand for package delivery was a 

result of the public, in response to the COVID-19 pandemic, substantially increasing its 

reliance on e-commerce and mail ordering.60 A backlog arose because of package volumes 

being inducted into the Postal Service’s network faster than they could be processed, and 

this resulted in gridlock due to a lack of space to stage the backlogged volumes. See 

Response to CHIR No. 1, question 17.a. This lack of space also led to other disruptions, 

such as crowded staging areas and longer wait times for drop shipments. Id. The Postal 

Service reports that “[m]any facilities were unable to maintain First-In-First-Out (FIFO) 

order, leading to increased cycle time and, by extension, diminished service performance.” 

Id.

The Postal Service states that “[t]he unprecedented surge in package volume affected the 

entire delivery industry...[,]” with the Postal Service’s limited resources being further 

strained due to “many other delivery companies instituting volume capacity controls for 

their customers, resulting in a substantial diversion of their package volume to the Postal 

Service and creating gridlock and backlogs throughout the network.” FY 2021 Annual 

Report at 35. The Postal Service stated that it does not have sufficient information to 

quantify the number of packages offloaded by private delivery companies. Response to 

CHIR No. 1, question 27.

60 See Docket No. ACR2020, Responses of the United States Postal Service to Questions 1-21 of Commission Information Request No. 1, 

January 15, 2021, question 3.a. (Docket No. ACR2020 Response to CIR No. 1); Docket No. ACR2020, Responses of the United States Postal 

Service to Questions 1-26 of Chairman’s Information Request No. 3, January 22, 2021, question 22.a. (Docket No. ACR2020 Response to CHIR 

No. 3).
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

and FY 2022 Performance Plan

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To mitigate the effects of processing backlogs and accommodate larger package volumes, 

the Postal Service reports that it hired additional employees to improve timely processing 

and dispatch; acquired long-term and peak season annexes to create additional space and 

allow for more efficient management of mail volumes; and added more package/bundle 

processing machines, which allowed the Postal Service to process more packages at a time 

and at a faster rate.61 According to the Postal Service, these changes occurred in the 

second half of FY 2021, leading to improved service performance in fiscal Quarters 3 and 

4. Response to CHIR No. 1, question 18.a.-b.

Additionally, for FY 2021, the traditional Quarter 1 peak season volume continued into 

Quarter 2.62 In response to an information request concerning the Postal Service’s use of 

seasonal employment, the Postal Service explained that seasonal employment is governed 

by various collective bargaining agreements with labor unions, and the period of seasonal 

employment typically does not extend into Quarter 2. Response to CHIR No. 8, question 

13.b.i. Depending on the function involved, seasonal employment typically begins 

anywhere from early October to early December and lasts through December 31. Id.

question 13.b.ii. The Postal Service asserts that any effort to extend seasonal employment 

into Quarter 2 to address residual mail delays from peak season would require a specific 

agreement or memorandum of understanding between the Postal Service and relevant 

labor unions. Id. question 13.b.iii.

The Commission considers that during the FY 2021 peak season, which spanned November 

2020 through January 2021, the Postal Service experienced a number of challenges above 

and beyond the typical holiday peak season due to the extreme strain that the COVID-19 

pandemic placed on the entire shipping industry. The Commission expects that the Postal 

Service’s addition of space and processing machines, which occurred in FY 2021 Quarters 3 

and 4, will put the Postal Service in a better position to respond to peak volumes. In addition 

to continuing efforts to align labor more efficiently with expected volume in Quarter 1, the 

Commission recommends that the Postal Service’s peak planning operations consider 

whether additional flexibility is needed to align labor with expected volume beyond Quarter 

1 in order to meet the applicable service standards.

61 Response to CHIR No. 1, question 18.a.; Responses of the United States Postal Service to Questions 1-36 of Chairman’s Information Request 

No. 2, January 25, 2022, question 26.a. (Response to CHIR No. 2).

62 See, e.g., FY 2021 Annual Report at 38-39 (noting the record package volume received by the Postal Service from November 2020 through 

January 2021, which spans FY 2021 Quarters 1 and 2); Lydia O’Neal, Logistics Hiring Surge Outlasts Holiday Busy Season, Wall Street Journal, 

(February 4, 2021), available at https://www.wsj.com/articles/logistics-hiring-surge-outlasts-holiday-busy-season-11643997477. Similarly, 

there have been publicly reported concerns of residual mail delays from peak season continuing into FY 2022 Quarter 2 after the Postal 

Service has ceased using most seasonal employees. See, e.g., Justin Wm. Moyer, Frustration builds in D.C. region over mail delays, The 

Washington Post (January 11, 2022), available at https://www.washingtonpost.com/dc-md-va/2022/01/11/dc-mail-delays-snow-covid/; 

Rachel Schneider, USPS says mail delivery issues due to "unforeseen circumstances," WDBJ7 (January 21, 2022), available at 

https://www.wdbj7.com/2022/01/21/neighbors-hardy-dealing-with-mail-delivery-dilemma/; Katharine Huntley, Inconsistent mail deliveries 

have some USPS customers frustrated, WCAX3 (January 19, 2022), available at https://www.wcax.com/2022/01/19/inconsistent-maildeliveries-have-some-usps-customers-frustrated/; Postal service: COVID-19 pandemic causing delays in delivery of some mail, packages, KTBS3 

(January 18, 2022), available at https://www.ktbs.com/postal-service-covid-19-pandemic-causing-delays-in-delivery-of-some-mailpackages/video_af6d6ad0-119a-5b5c-876d-233a3bda19f5.html.
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(2) Employee Absenteeism

The Postal Service states that high levels of employee absenteeism due to the COVID-19 

pandemic negatively affected its ability to staff its operations appropriately during 

FY 2021. FY 2021 Annual Report at 35. Specifically, the Postal Service explains that 

significant COVID-19-related employee absenteeism occurred in “hot spots”—specific 

geographic areas or facilities—which led to problems processing, transporting, and 

delivering mail volumes not only in those areas or facilities, but also in downstream 

operations.63 This is because if one geographic area or facility has insufficient employee 

availability to clear the mail, mail destined for downstream areas and/or facilities will be 

delayed. Response to CHIR No. 11, question 16.a.

The Postal Service has previously explained that monthly employee availability of less 

than 70 percent can be “empirically [ ] most effective [in] distinguishing particularlychallenged Districts.”64 The Postal Service reported that of the current 50 Districts, 13 

Processing Divisions, 13 Logistics Divisions, and Headquarters units in the Postal Service’s 

organizational structure, 22 had at least one month during FY 2021 in which employee 

availability fell below 70 percent. Response to CHIR No. 8, question 4. In its FY 2021 ACD, 

the Commission found that challenges with respect to employee availability were greater 

for mail processing than for delivery services or customer service. FY 2021 ACD at 110. 

The Postal Service reports that the average length of COVID-19 pandemic related leave in 

FY 2021 was slightly more than 2 weeks (87.6 hours). Response to CHIR No. 8, question 2.

In order to mitigate the effects of employee absenteeism, the Postal Service reports that it 

worked with relevant labor unions to increase the number of career employees through a 

scheduled conversion process and hired additional employees to backfill the non-career 

positions.65 The Postal Service states that by the end of FY 2021, its total career workforce 

had increased by over 25,000 employees compared to FY 2020. Response to CHIR No. 1, 

question 13.c. The Postal Service asserts that this larger workforce resulted in increased 

service performance, which the Postal Service believes will be sustained in FY 2022. Id.

question 13.c-f. The Postal Service states that it plans to continue to monitor employee 

availability and staffing levels through employee availability metrics and employee-onrolls data and will adjust staffing as needed to ensure adequate employee availability in 

FY 2022. Id. question 13.e., g.

The Commission has found that employee availability, on average, increased from FY 2019 

to FY 2020, and decreased from FY 2020 to FY 2021. FY 2021 ACD at 109. Service 

performance results, meanwhile, generally declined in both FY 2020 and FY 2021. Id.

63 See Response to CHIR No. 1, question 13.a.; Responses of the United States Postal Service to Questions 1-21 of Chairman’s Information 

Request No. 11, February 11, 2022, question 16.a. (Response to CHIR No. 11).

64 Docket No. ACR2020, Responses of the United States Postal Service to Questions 1-16 of Chairman’s Information Request No. 11, February 

11, 2021, question 13.b.

65 Response to CHIR No. 1, question 13.c.; Library Reference USPS-FY21-29, December 29, 2021, file “Preface USPS-FY21-29,” at 4.
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at 141, 171, 182. At first glance, this might suggest a weak correlation between employee 

availability and service performance declines, but as the Commission has noted elsewhere, 

for a network industry such as the Postal Service, the question can be one not of employee 

availability on average, but at specific points and specific times. See id. at 111. Low 

employee availability in specific geographic areas or for specific job functions can have 

substantial downstream effects on other geographic areas and/or job functions due to the 

interconnectedness of the Postal Service’s processing network. Id.

The Commission finds that the measures the Postal Service has undertaken to improve 

employee availability appear reasonable. Given that further COVID-19 surges remain 

unpredictable, the Commission recommends that the Postal Service leverage data from the 

past 2 years to identify any patterns that might enable the Postal Service to better anticipate 

when and where future employee availability problems are likely to have the largest impact 

on service performance.

(3) Reduced Supplier Capacity

The Postal Service states that in FY 2021, the COVID-19 pandemic continued to negatively 

impact air and surface transportation contractors on whom the Postal Service relies for 

transportation of mail between processing phases. FY 2021 Annual Report at 35. 

Reductions in commercial air lift resulted from airlines reducing the number of flights, 

changing schedules, and using smaller airplanes with less capacity for mail and package 

cargo space. Id.; Response to CHIR No. 1, question 15.a. The Postal Service reports that it 

attempted to mitigate these impacts by shifting mail from the air to the surface 

transportation network. Id. question 16.a. The Postal Service explains that it used “as 

need” and “rapid response” surface transportation contracts to move additional mail 

volume or volume that needed to be offloaded, but these efforts were minimally effective 

due to high demand for transportation services throughout the industry, as well as the fact 

that mail transportation schedules are planned in advance to meet existing service 

standards, and as a result the ability to dynamically transfer mail from air to surface 

transportation to achieve service standards is limited.66

The Postal Service tracks surface trips that arrive more than 4 hours late, referred to as 

Critically Late Trips (CLTs).67 In the FY 2021 ACD, the Commission found that the number 

of nationwide First-Class Mail CLTs associated with Highway Contract Routes (HCRs) 

increased from 8,995 in FY 2020 to 30,070 in FY 2021—a more than three-fold increase. 

FY 2021 ACD at 114. Of the CLTs in FY 2021, 52.9 percent were attributable to contractors, 

a distribution comparable to that observed in FY 2020. Id. at 116. In order to attempt to 

mitigate CLTs attributable to contractors, the Postal Service reports that it now tracks and 

evaluates CLTs based on whether they were attributable to the contractor, the Postal 

Service, or to outside factors. See Response to CHIR No. 1, question 28. The Postal Service,

66 FY 2021 Annual Report at 35; Response to CHIR No. 1, question 16.a.; FY 2021 ACR at 50.

67 Docket No. ACR2015, Responses of the United States Postal Service to Questions 1-20 of Chairman’s Information Request No. 22, November 

15, 2016, question 12.b.i. (Docket No. ACR2015, Response to CHIR No. 22).
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also in FY 2021, conducted training sessions with relevant management on the topic of 

developing and implementing supplier performance improvement plans and removing 

contracted suppliers from surface routes whose performance is unsatisfactory, and the 

Postal Service created a dashboard to track omitted and late service by contractors.

68

The OIG has documented the significant challenges the Postal Service faces in recruiting 

and retaining truck drivers as a result of the current nationwide truck driver shortage.69

There are both service and cost implications to this: on the one hand, the lack of available 

drivers results in mail not being transported in time to be delivered within the applicable 

service standards; on the other hand, it drives up the costs of recruitment and contract 

procurement, as well as overtime pay for existing drivers. OIG Report No. RISC-WP-22-002

at 1-2.

The Postal Service has been attempting to improve recruitment with respect to the truck 

drivers that it directly employs. Id. Current efforts include marketing available positions 

and training existing drivers of smaller trucks to operate tractor-trailers. Id. Industry 

sources relayed to the OIG that beyond offering higher wages, dedicated routes and the 

ability to go home at night are, for many drivers, attractive aspects to working for the 

Postal Service compared to other industry positions. Id. at 1. These sources also relayed 

that companies have been targeting recruitment efforts to attract younger drivers, as well 

as women drivers, who have not traditionally been a significant percentage of the truck 

driver labor force.70 Furthermore, industry sources described how focusing on the driver 

experience is a powerful way to improve driver recruitment and retention. OIG Report 

No. RISC-WP-22-002 at 1.

The Postal Service has also been working to expand its base of contracted suppliers, which 

decreased by approximately a third from FY 2018 through FY 2021. Id. at 2. The OIG has 

identified best practices to attract new carriers, which include regularly communicating 

with carriers, including providing transparency around performance metrics, and utilizing 

awards and incentive programs for high performers. Id.

Finally, the Postal Service has been working to improve truck utilization as fuller trucks 

can result in fewer trips and enable the Postal Service to get the most productivity out of 

the drivers available. Id. Industry experts described to the OIG technologies that can better 

coordinate loads and unloads and optimize driver time, such as apps and geofencing to 

better align facility operations with truck arrival times. Id.

68 Library Reference USPS-FY21-29, file “Preface USPS-FY21-29,” at 4; Response to CHIR No. 1, question 16.e; Response to CHIR No. 1, question 

29; Response to CHIR No. 11, question 15.

69 See United States Postal Service, Office of Inspector General, Report No. RISC-WP-22-002, The Truck Driver Shortage: Implications for the 

Postal Service, March 7, 2022, available at https://www.uspsoig.gov/sites/default/files/document-library-files/2022/RISC-WP-22-002.pdf (OIG 

Report No. RISC-WP-22-002).

70 Id. at 1. A high-profile retailer has reportedly utilized similar tactics to augment its internal trucking resources. See Sarah Nassauer, Walmart 

Dangles $110,000 Starting Pay to Lure Truck Drivers, Wall Street Journal, April 7, 2022, available at https://www.wsj.com/articles/walmartraises-pay-to-attract-truck-drivers-11649336400.
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The Commission recommends that the Postal Service consider implementing some of the best 

practices identified by the OIG to better recruit and retain truck drivers and increase the 

efficiency of truck usage.

The Commission recognizes that the Postal Service has limited options in dealing with 

transportation failures caused by suppliers. It is valuable that the Postal Service is 

focusing on closely monitoring supplier performance and pursuing remedies against 

suppliers that fail to perform adequately. The Commission notes, however, that 34.8 

percent of CLTs in FY 2021 were attributable not to contractors, but to processing failures 

by the Postal Service. FY 2021 ACD at 116, Table V-1. The Postal Service has stated that it 

has attempted to remediate these CLTs by hiring more employees, acquiring more space, 

installing more package-sorting machines, and creating more STCs. Id. at 116. Because 

CLTs attributable to the Postal Service’s own processing failures are within the Postal 

Service’s direct control, the likelihood of reducing this type of CLT is arguably greater than 

the likelihood of reducing CLTs caused by contractors.

The Commission notes that, as depicted in Figure III-1, the number of CLTs associated 

with First-Class Mail varied widely by District in FY 2021.
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Figure III-1

First-Class Mail Percentage of Critically Late Trips, By District, FY 2021

Source: Library Reference USPS-FY21-29, Excel file “FY21 FCM Q3 CLT.xlsx.”

The colors on the map represent different quartiles of data with each color grouping (i.e., 

each quartile) containing approximately 25 percent of the 67 districts when broken down 

by the number of CLTs. As reflected in Figure III-1, the district with the lowest number of 

CLTs in FY 2021 was Sierra-Coastal (in Southern California), with 33 CLTs, while the 

district with the highest number of CLTs was Northern New Jersey, with 2,580 CLTs. The 

fact that CLTs are disproportionately concentrated in certain districts represents an 

opportunity for the Postal Service to achieve substantial reductions in overall CLTs by 

focusing its efforts on those districts with the highest number of CLTs.

The Commission recommends that the Postal Service focus its efforts on reducing CLTs in the 

Districts with the highest concentrations of them.

(4) Weather and Natural Disasters

The Postal Service states that it experienced significant challenges in FY 2021 due to 

natural disasters and weather events. FY 2021 Annual Report at 35. The Postal Service 

states that “[i]n some cases, these events impacted postal suppliers and led to reduced ontime service performance.” Id. The Postal Service provided the top 10 natural disaster 

and/or weather events from FY 2021 that had the most significant negative impact on 

High-Quality Service results, which are presented in Figure III-2.
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Figure III-2

Postal Service Identification of the Top 10 Most Impactful Natural Disasters and Weather 

Events of FY 2021

Source: Response to CHIR No. 25, question 1.

The Commission recognizes that while the occurrence of adverse weather events and/or 

natural disasters can generally be foreseen, the timing, location, and/or severity of such 

events cannot very effectively be predicted. The effects of such events can be minimized, 

but not entirely prevented. In the FY 2020 Plan, the Postal Service stated its intention to 

launch a new “Disruptive Events” initiative to enable the Postal Service to more accurately 

quantify impacts from, and diagnose service failures caused by, unforeseen events outside 

of management control, such as weather-related emergencies and natural disasters. 

FY 2019 Annual Report at 23. In Docket No. ACR2020, the Postal Service asserted that 

“[t]he Disruptive Events initiative was suspended due to resource constraints and 

competing priorities.”71 The Postal Service reported that the Disruptive Events initiative 

remained suspended as of the end of FY 2021, again due to resource constraints and 

competing priorities. Response to CHIR No. 8, questions 7.a., 7.d. As stated in the FY 2020 

Analysis, the Commission recognizes that the existence of the COVID-19 pandemic forced 

the Postal Service to make difficult decisions regarding the allocation of its resources and 

attention. See FY 2020 Analysis at 49. Nevertheless, the Disruptive Events initiative—with 

71 Docket No. ACR2020, Responses of the United States Postal Service to Questions 1-11 of Chairman’s Information Request No. 15, February 

18, 2021, question 11.a.
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its purpose of accurately quantifying the effects of network disruptions and diagnosing 

corresponding service failures—would have presumably proven useful in responding to 

the COVID-19 pandemic and developing appropriate targets that account for foreseeable 

annual disruptions outside of the Postal Service’s control. Id.

The Commission again recommends that the Postal Service restart the Disruptive Events 

initiative and report on its progress in the FY 2022 Report. If it does not restart the initiative, 

then the Postal Service should explain why it has not done so in the FY 2022 Report.

c. Plans for Improving High-Quality Service in FY 2022

(1) Continued Implementation of 10-Year Strategic Plan

The Postal Service reports that in FY 2022 it will continue implementing elements of its 

10-Year Strategic Plan. FY 2021 Annual Report at 36. These efforts generally involve 

reviews to optimize processing operations, planning for the peak season, and financial 

outlays for additional employees, equipment, and facilities.

First, the Postal Service states that Postal leadership will conduct a review of processing 

locations and establish site-specific operating plans. Id. This represents a continuation of 

work that was begun in FY 2021 by the Headquarters In-Plant Support Letter and Flat, 

Planning and Implementation Group, which worked with sites in FY 2021 to develop and 

test site-specific operating plans for letters and flats. Response to CHIR No. 8, question 9.a. 

The Postal Service explains that “[w]ith site-specific operating plans, facilities can 

optimize processing windows and right-size staffing based on processing capability, 

critical entry times, and transportation schedules[,]” which is “expected to have a positive 

impact on High-Quality Service by setting achievable goals that align with the clearance 

and dispatch times needed to meet service expectations.” Id. at question 18.

Second, the Postal Service reported that it would proactively plan for the FY 2022 peak 

season, “based on the challenges faced [during FY 2021 peak season] and in accordance 

with the [the 10-Year Strategic Plan].” FY 2021 Annual Report at 36. The Postal Service 

reported that its plans included “hiring over 40,000 seasonal delivery and plant personnel, 

expanding its facility footprint by leasing 7.5 million additional square feet in more than 

40 multi-year annexes, and installing new processing equipment to accommodate the 

delivery needs of customers.” Id.

The Postal Service stated that in order to further support peak operations it was 

continuing to work with relevant labor unions to increase the number of career employees 

through a scheduled conversion process. Id. The Postal Service explained that there are 

multiple benefits associated with stabilization of the career workforce which should 

translate into improvements in High-Quality Service, including: (1) enabling the Postal 

Service to have highly-trained, skilled workers in frontline operations, which should result 

in improved efficiencies in those operations; (2) reducing the turnover rate, as career 

employees have a lower turnover rate compared to non-career employees; and (3) 
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providing the necessary complement to properly staff and schedule operations to perform 

at expected productivity rates and adherence to operating plans. Response to CHIR No. 8, 

question 14. The Postal Service stated that it would also continue to hire seasonal 

employees and provide training to prepare them for their peak season duties. Id.

In response to an information request, the Postal Service reported that it successfully 

executed the foregoing plans during the FY 2022 peak season and that “[c]ollectively, 

these changes positively impacted service performance by providing necessary resources, 

space, and capacity to handle FY 2022 peak season volume.” Id. at question 13.a.

Third, the Postal Service reports that it will continue to invest in its network as part of the 

$40 billion in planned capital investments outlined in the 10-Year Strategic Plan. FY 2021 

Annual Report at 36. The Postal Service states that it will continue installations of new 

package sorting machines. Id.; Response to CHIR No. 2, question 27.a. The Postal Service 

states that these investments will increase processing capacity by more than 4.5 million 

additional packages daily. FY 2021 Annual Report at 36. The Postal Service asserts that the 

installation of additional package sorting machines will have a positive effect on HighQuality Service by allowing the Postal Service to further address capacity shortfalls in 

certain facilities, allowing those facilities to process package volumes in a serviceresponsive operating window with reduced delays. Response to CHIR No. 8, question 15.

Fourth, the Postal Service reports that during the first Quarter of FY 2022 it completed its 

processing network redesign, which expanded the STC network to add several hundred 

thousand additional square feet. FY 2021 Annual Report at 36; Response to CHIR No. 8, 

question 16. The Postal Service states that the multi-year processing network redesign 

forms a “core component” of the 10-Year Strategic Plan and is “essential to sustain highquality service performance.” FY 2021 Annual Report at 36. The Postal Service further 

states that the processing network redesign “will permit continued operations as facilities 

are modernized and optimized to meet customer needs for the future.” Id. The Postal 

Service reports that STC facility space was increased 265 percent—from 594,700 to 

2,170,950 square feet—while dock doors for transportation increased 54 percent—from 

204 to 315. Response to CHIR No. 8, question 16. The Postal Service expects this, in 

conjunction with the expansion of Package Support Annexes, to allow for better 

management of FIFO order. Id. question 11. The Postal Service asserts that this should be 

expected to improve service results. Id.

Fifth, the Postal Service reports that at the beginning of FY 2022, as part of the Postal 

Service’s 10-Year Strategic Plan, it implemented the new service standards for First-Class 

Mail and Periodicals. FY 2021 Annual Report at 36. The Postal Service asserts that these 

changes “are a necessary step towards achieving 95 percent on-time service 

performance[,]” and will “increase delivery reliability, consistency, and efficiency for 

customers[,]” thereby positively impacting service performance results. FY 2021 Annual 

Report at 36; Response to CHIR No. 8, question 17.a.-b. At the same time, however, the 

Postal Service maintains that most First-Class Mail and Periodicals will be unaffected by 
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the service standard changes, which apply primarily to long-distance mail. FY 2021 Annual 

Report at 36. The Postal Service asserts that with the implementation of these service 

standard changes, it can “design its ground transportation network to deliver more FirstClass Mail, benefitting customers.” Id.

In the FY 2020 Analysis, the Commission recommended that the Postal Service develop 

metrics to measure and evaluate whether and how the organizational restructuring 

undertaken pursuant to the Postal Service’s 10-Year Strategic Plan improved service 

performance, accountability, and communications. FY 2020 Analysis at 50. The Postal 

Service explained that it did not develop new metrics but did leverage its existing National 

Performance Assessment (NPA) process “to measure organizational service performance 

through a variety of factors measuring processing, transportation, delivery and customer 

service performance.” Response to CHIR No. 8, question 8. The Postal Service provided the 

NPA indicators for FY 2022. Id. The Postal Service asserts that “[c]oming out of the 

administrative restructuring, the anticipated results were that service performance would 

improve as there was increased emphasis on line-of-sight accountability and streamlined 

decision making.” Id.

The Commission has analyzed the changes to service standards and service performance 

improvement initiatives associated with the Postal Service’s 10-Year Strategic Plan in 

prior dockets.72 In general, assessing the efficacy of the Postal Service’s planned 

improvement initiatives has been complicated due to the Postal Service’s reported 

inability to quantify the expected impact of any of these efforts on service performance 

results. See FY 2021 ACD at 145-148, 171-172, 178, 182-183, 188. Changing service 

standards further exacerbates this problem because it makes it even more difficult to 

discern whether, in fact, quality improvements have occurred.

The Commission recommends that the Postal Service develop methods to quantitatively 

measure the effectiveness of its service improvement initiatives so as not to spend resources 

needlessly or ineffectively.

While it may be premature to assess the results of any of the Postal Service’s individual 

improvement initiatives, the Postal Service’s recently issued First-Year Progress Report 

would seem to indicate substantial service performance improvement during the FY 2022

peak season.73 Specifically, the Postal Service reports a 10.4 percent improvement for all 

First-Class Mail compared to the FY 2021 peak season, a 7.7 percent improvement for all 

USPS Marketing Mail, and an 11.1 percent improvement for all Periodicals. Postal Service 

Delivering for America at 5. The Postal Service also reports “strong double-digit 

72 See Docket No. N2021-1 Advisory Opinion; Docket No. N2021-2, Advisory Opinion on the Service Standard Changes Associated with FirstClass Package Service, September 29, 2021; FY 2021 ACD at 145-148, 171-172, 178, 182-183, 188.

73 See United States Postal Service, Delivering for America: First Year Progress Report, April 7, 2022, at 5, available at 

https://about.usps.com/what/strategic-plans/delivering-for-america/assets/usps-dfa-one-year-report.pdf (discussing improvements observed 

from October through December 2021, which correspond with FY 2022 Quarter 1) (Postal Service Delivering for America).
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performance improvement with First-Class Package Service and Priority Mail delivery.” Id.

The Postal Service states that:

These service improvements have been, in part, the result of 

strategic diversification of volume travelling across the air network 

among additional air carriers and more reliable surface 

transportation providers, which is further enabled by the new 

service standards for First-Class Mail [ ] and Periodicals that went 

into effect October 1, 2021.

Id. As noted in the Docket No. N2021-1 Advisory Opinion, expanding the service standard 

window should make it easier for the Postal Service to meet service performance targets 

for a portion of First-Class Mail and Periodicals Mail. See Docket No. N2021-1 Advisory 

Opinion. The Commission will continue to monitor this issue closely to see if this 

improvement is sustained.

(2) CY 2022 Election Mail Performance

The Postal Service states that in August 2021 the Board of Governors reconstituted the 

Election Mail Committee to oversee, review, and monitor the Postal Service’s preparations 

for the CY 2022 primary and general elections and make recommendations to the Board 

on election-related issues. FY 2021 Annual Report at 23, 36. The Postal Service asserts that 

“[t]he existence of the Committee...is a manifestation of the high-level organizational 

commitment to delivering Election Mail in a timely fashion.” Response to CHIR No. 8, 

question 19.a. The Postal Service explains that while to date it has not identified any 

specific projections regarding Election Mail volumes for the CY 2022 election cycle, “the 

Postal Service’s network is fluid and can adjust to increases in Election Mail volume to 

ensure timely delivery.” Id. question 19.b. The Postal Service states that “[o]perationally, 

the Postal Service can scale, process, and deliver Election Mail volume increases as it 

would during peak season.” Id. question 19.c. The Postal Service states that it will 

“continue to take steps to prioritize monitoring and timely delivery of Election Mail 

consistent with [the Postal Service’s] longstanding practices and efforts from the 2020 

election cycle.” Id.

With respect to any potential impact of the ongoing COVID-19 pandemic on Election Mail 

volumes, the Postal Service states that it will “continue to adapt and support states as they 

evaluate dynamic COVID-19 impacts and adjust how they will conduct their elections.” Id.

question 19.b. The Postal Service states that it will follow its existing Continuity of 

Operations (COOP) Plan, which includes contingencies for COVID-19, including new 

variants, and other established COVID-19 protocols. Id. question 19.d. The Postal Service 

maintains that the newly-implemented service standard changes for First-Class Mail and 

Periodicals in FY 2022 should have little effect on Election Mail volumes, because the 

service standard changes only impact mail traveling long distances, and “[t]he vast 

majority of Election Mail, particularly completed ballots returned by voters, travel 

between where they originate and destinate in three hours or less....” Id. question 19.e. 

The Postal Service anticipates that approximately 3.84 percent of return ballots could 
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experience a slight downward change in service standards during the CY 2022 election 

cycle. Id.

As a recent report by the OIG detailed, the vote-by-mail process, which is decentralized 

and widely varied because it is administered state-by-state, poses a number of challenges 

in terms of the Postal Service’s ability to ensure that ballots are delivered to election 

officials by election day.74 These challenges include the fact that states, ballot printers, and 

local jurisdictions do not always follow best practices when designing and mailing ballots, 

such as using ballot-specific Intelligent Mail Barcode (IMbs) or designing ballot envelopes 

with optimal physical characteristics for efficient processing. OIG Report No. RISC-WP-21-

004 at 1.

Another challenge is the significant variation in state laws with respect to when voters can 

request ballots and when completed ballots must be received, with many states’ laws 

failing to allow sufficient time for ballots to travel to and from voters through the mail, 

particularly when election officials send outgoing ballots as USPS Marketing Mail, which 

features longer service standards than First-Class Mail. Id. This difficulty is further 

compounded by the fact that the ballots—and the envelope vendors who often send the 

outgoing ballots to voters—can be located far from the election jurisdictions where the 

ballots will be cast, causing the outgoing ballots to have to travel further through the 

Postal Service’s network than if they were mailed locally. Id. at 2.

A third challenge is that some states require return ballots to bear a postmark as proof 

that they were mailed before the ballot return deadline, although many ballots are not the 

type of mail that would ordinarily be postmarked during postal processing. Id.

In order to address these challenges, the Postal Service commits extra resources and 

implements what it terms “extraordinary measures” during election cycles, which include 

creating networks of Election Mail Coordinators and Mailpiece Design Analysts to work 

with local election officials, prioritizing ballots in processing operations regardless of mail 

class, altering ordinary postmarking procedures so that all return ballots receive a 

postmark, conducting daily sweeps of facilities for ballots, dispatching additional 

transportation and special trips for ballots, bypassing the processing network by 

transporting local inbound ballots directly from the receiving Post Offices to local election 

offices, processing mail on the Sunday before election day, and transporting ballots via the 

express network. Id. at 1, 15-16. As stated in Section III.A.1., supra, these efforts were 

largely successful during the FY 2020 election cycle.

The OIG recommended that the Postal Service leverage its partnerships with state and 

local election officials to work towards creating a separate, simplified mail product 

74 See United States Postal Service, Office of Inspector General, Report No. RISC-WP-21-004, Vote by Mail and the Postal Service: A Primer, 

June 1, 2021, available at https://www.uspsoig.gov/document/vote-mail-and-postal-serviceprimer#:~:text=In%20the%202020%20general%20election,the%20Postal%20Service%20and%20others (OIG Report No. RISC-WP-21-004).
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exclusively for Election Mail that would support uniform mail processing, including 

mandatory mailpiece tracking and proper mailpiece design. OIG Report No. RISC-WP-21-

004 at 17. The OIG further recommended that the Postal Service continue to educate state 

and local election officials on mailing deadlines for requesting and receipt of ballots that 

account for the Postal Service’s time to process, transport, and deliver mail. Id.

The Commission concurs with these OIG recommendations. Although the Postal Service lacks 

direct control over individual states’ election procedures, implementing the foregoing 

strategies to the extent possible should make the vote-by-mail process run more smoothly 

and help ensure that ballots are delivered within the deadlines established by states.

(3) Service Performance by District and/or Area

Beginning in FY 2019, the Commission recommended that the Postal Service examine the 

fact that service performance across the Postal Service’s Districts varies relative to 

geography. See FY 2019 Analysis at 35-37; FY 2020 Analysis at 57-59. The Postal Service 

reports that it focused service performance improvement efforts on low-performing 

organizational units in FY 2021 and will continue to do so. Response to CHIR No. 8, 

question 12. The Postal Service states that Processing Operations Division Support 

provides daily service performance scores at the Division and plant level and ranks the 

lowest performers. Id. Moreover, Division Support provides daily service Grid analysis for 

low-performing plants, which is utilized to identify root causes of processing failures and 

implement action plans. Id. The Postal Service states that several Divisions also convene 

regular service meetings to discuss reasons for service performance issues and strategies 

for improvement at low-performing plants. Id.

Variance in service performance by Districts is illustrated in Figure III-3, which presents 

FY 2021 on-time service performance results for Single-Piece First-Class Mail Letters and 

Postcards with a 3-5-Day service standard.
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Figure III-3

On-Time Service Performance, By District, 3-5-Day Single-Piece Letters/Postcards, FY 2021

Source: United States Postal Service, FY 2021 Quarter 4 Service Performance Measurement Data, November 10, 2021, ZIP folder 

“QuartPerf_FY21_Q4.zip,” ZIP folder “FY21 Q4 SPM Reports,” ZIP folder “First-Class Mail.zip,” Excel file “SPFC LC 214 Scores Report.xlsx.”

The data reflected in this map illustrate the percentage of mailpieces that were delivered 

within the expected service performance window, measured at the District level. The 

Single-Piece First-Class Mail 3-5-Day service performance target for FY 2021 was 68.64

percent. FY 2021 ACD at 141, Table V-4. The colors on the map represent different 

quartiles of data, with each color grouping containing 25 percent of the Districts. The 

darker colors indicate a lower percentage of mailpieces meeting the service standard. 

Interval break points are based on the distribution of the data points. Because volume data 

show origin/destination combined results in which each mailpiece is counted once 

according to its origin and once according to its destination, it is difficult to determine 

which processing phase was most responsible for the mail failing to meet its service 

performance target.75 Nevertheless, Figure III-3 continues to clearly demonstrate that 

75 Volume data are a component of service performance reporting. See United States Postal Service, FY 2021 Quarter 4 Service Performance 

Measurement Data, November 10, 2021, ZIP folder “QuartPerf_FY21_Q4.zip,” ZIP folder “FY21 Q4 SPM Reports,” ZIP folder “First-Class 

Mail.zip,” Excel file “SPFC LC 214 Scores Report.xlsx,” tab “SPFC LC Narrative.” Volume data are provided by the Commission on its website at 

https://www.prc.gov/dockets/quarterly-performance.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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discrepancies in service performance results exist at the District level, with a gap of 36.9 

percentage points separating the lowest and highest performing Districts.

A similar level of variation in service performance can also be seen with respect to specific 

products. For example, Figure III-4 depicts service performance for Outside County 

Periodicals by Area for FY 2021.

Figure III-4

On-Time Service Performance, By Area, Outside County Periodicals, FY 2021

Source: United States Postal Service, FY 2021 Quarter 4 Service Performance Measurement Data, ZIP folder “FY21 Q4 SPM Reports.zip,” ZIP 

folder “Periodicals.zip,” Excel file “Periodicals 214 Scores Report.xlsx,” tab “PER YTD.”

Figure III-4 demonstrates that significant product-discrepancies in service performance 

between Areas for this particular product.

The Commission continues to recommend that the Postal Service explore ways to better 

balance service performance scores across the nation. It is likely that significant gains in 

national scores could be made by focusing efforts on low-performing Areas and/or Districts. 

Thus, the Commission recommends the Postal Service study the reasons for service 

performance issues in the lowest performing Areas/Districts. For example, the Postal Service 

should require Area/Districts with low service performance scores to identify root cause(s) of 

low scores specific to that District and create action plans for improving service performance 

that specifically address the root cause(s) identified. The Postal Service should also require 

Areas/Districts with low service performance scores demonstrate the efficacy of action plans 

for improving service performance using quantitative metrics of operational improvement.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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B. Excellent Customer Experience

1. Background

a. Customer Experience Surveys

The Postal Service measures customer experience (CX) by conducting surveys of 

residential, small/medium business, and large business customers.76 In FY 2021, the 

Postal Service measured CX using the following eight surveys:

• Business Service Network (BSN)

• Point of Sale (POS)

• Delivery

• Customer Care Center (CCC)

• Customer 360 (C360)

• Business Mail Entry Unit (BMEU)77

• USPS.com

• Large Business Panel

The Postal Service provides copies of these surveys in the FY 2021 ACR.78 Each survey 

measures a customer touchpoint or interaction between the customer and the Postal 

Service. Each of the eight surveys is summarized below.

The BSN provides nationwide support to qualified business customers related to service 

issues, information, and requests. FY 2021 Annual Report at 38. The BSN survey measures 

business customers’ satisfaction with the overall experience provided by the BSN. Id.

Customers who initiate a service request within the BSN receive an email invitation to 

take the BSN survey online within 30 days. Library Reference USPS-FY21-38, Preface at 3. 

The BSN survey consists of 14 evaluation questions and 4 open-ended customer supplied 

responses. Id. These questions ask business customers about their satisfaction with their 

76 Residential customers live in United States households that receive mail delivery. Small/medium business customers have fewer than 250 

employees at one location. Large business customers have 500 or more employees. Library Reference USPS-FY21-38, December 29, 2021, 

folder USPS-FY21-38, file “USPS-FY21-38 Preface.pdf,” at 3, 5 (Library Reference USPS-FY21-38, Preface).

77 The Postal Service refers to the BMEU survey as both “Bulk Mail Entry Unit” and “Business Mail Entry Unit.” See FY 2021 Annual Report at 

38; Library Reference USPS-FY21-38, Preface at 2. The survey name is “Business Mail Entry Unit.” Library Reference USPS-FY21-38, folders

“USPS-FY21-38,” file “CX_Surveys_FY21.docx,” at 9 (Surveys).

78 See Surveys. The Commission’s rules require the ACR to include a copy of each customer survey; a description of the customer type targeted 

by the survey; the number of surveys initiated and received; and in the case of multiple-choice questions, the number of responses received 

for each question, disaggregated by each of the possible responses. 39 C.F.R. § 3055.92.
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overall experience with the BSN and interaction with the BSN representative. See Surveys 

at 9.

The POS survey measures customers’ overall satisfaction with their experience at retail 

locations that use POS equipment.79 After completing a retail transaction, customers 

receive a receipt inviting them to take the POS survey via website, telephone number, or 

Quick Response Code within 30 days. Library Reference USPS-FY21-38, Preface at 3. The 

POS survey is conducted through a web-based survey platform and consists of 12

evaluation questions and 2 open-ended customer supplied responses. Id. These questions 

ask retail customers to evaluate their visit to the retail location, their interaction with the 

sales associate, and their wait time in line.80

The Delivery survey measures the level of satisfaction of residential and small/medium 

business customers with sending and receiving mail and packages.

81 There are different 

Delivery surveys for residential and small/medium business customers. Randomly 

selected residential and small/medium business customers are mailed a letter inviting 

them to take the survey on a weekly basis either by phone or online. Library Reference 

USPS-FY21-38, Preface at 3. Residential customers are asked 19 evaluation questions and 

2 open-ended customer supplied responses. Id. Small/medium business customers are 

asked 20 evaluation questions and 2 open-ended customer supplied responses. Id. These 

questions ask customers to evaluate their experience receiving mail and packages as well 

as sending domestic and international products. See Surveys at 26-32.

The CCC survey measures customer satisfaction with calls made to the CCC, which handles 

customer calls to the Postal Service’s toll-free customer service line.82 Customers who call 

the CCC may use the Interactive Voice Response (IVR) system or speak to a live agent. 

Library Reference USPS-FY21-38, Preface at 4. There are two different CCC surveys that 

measure customers’ overall satisfaction with either the IVR system (IVR system survey) or 

the live agent (Live Agent survey). Id. For the IVR system survey, customers who call the 

toll-free number and only interact with the IVR system are asked at the beginning of the 

call if they would like to complete a survey after the call. Id. For the Live Agent survey, 

customers who call the toll-free number and speak with a live agent receive phone 

invitations to take the survey. Id. The CCC surveys ask about customers’ overall experience 

provided by the IVR system or the live agent. See Surveys at 80-81.

79 FY 2021 Annual Report at 38; Library Reference USPS-FY21-38, Preface at 3.

80 See Surveys at 2-8. The Commission discussed wait time in line in the FY 2021 ACD. See FY 2021 ACD at 214-17.

81 FY 2021 Annual Report at 38; see Surveys at 22-37. The Delivery survey also measures residential and small/medium business customer 

satisfaction with Market Dominant products, which the Commission discussed in the FY 2021 ACD. See FY 2021 ACD at 219-27.

82 FY 2021 Annual Report at 38; Library Reference USPS-FY21-38, Preface at 4.
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The C360 survey measures satisfaction with issue resolution for customers who open a 

service ticket through a CCC live agent, via USPS.com, or at a local Post Office.

83 The C360 

survey is sent to customers who provide an email address after their cases have been 

closed. Library Reference USPS-FY21-38, Preface at 4. Customers who only provide a 

phone number receive a call from the IVR system. Id. The C360 survey consists of 13 

evaluation questions and 2 open-ended customer supplied responses. Id. These questions 

ask customers whether their case was resolved successfully and how satisfied they were 

with the quality of service received in response to their issue. See Surveys at 38-48.

The BMEU is the area of a postal facility where business mailers present bulk, presorted, 

and permit mail for acceptance.84 The BMEU survey measures business customers’ overall

satisfaction with their experience at the BMEU.85 After business customers produce and 

finalize a postage statement at the BMEU, they receive an email inviting them to take the 

web-based survey, which consists of nine evaluation questions and three open-ended 

customer supplied responses. Library Reference USPS-FY21-38, Preface at 2-3. These 

questions ask about business mailers’ overall satisfaction with their experience at the 

BMEU, as well as their experience with acceptance employees at the BMEU. See Surveys 

at 71-79.

The USPS.com survey measures the level of satisfaction for customers who visit the Postal 

Service’s website.86 The survey is offered to a random sample of 2 percent of customers 

who access the website through a desktop computer or tablet and click through 3 or more 

web pages. Library Reference USPS-FY21-38, Preface at 4. The survey is also offered to a 

random sample of 5 percent of customers who access the website through a mobile device. 

Id. The survey consists of four evaluation questions and one open-ended customer 

supplied response. Id.; see Surveys at 82. These questions ask about customer satisfaction 

with the overall experience provided by the website and whether customers accomplished 

what they wanted to on the website. See Surveys at 82.

The Large Business Panel survey is a relational panel survey that measures customer 

satisfaction of large business customers, which are those with 500 or more employees.87 A 

third-party vendor manages customers that sign up to participate in the panel. Library 

Reference USPS-FY21-38, Preface at 5. In FY 2021, the Large Business Panel survey was 

conducted monthly to account for seasonal variation in customer satisfaction with Market 

83 FY 2021 Annual Report at 38; Library Reference USPS-FY21-38, Preface at 4. The C360 survey was previously called the Enterprise Customer 

Care survey. FY 2020 Annual Report 37.

84 “Business Mail Entry Unit,” United States Postal Service, Glossary of Postal Terms (Publication 32), July 2013, available at 

https://about.usps.com/publications/pub32/pub32_terms.htm.

85 FY 2021 Annual Report at 38; Library Reference USPS-FY21-38, Preface at 2.

86 FY 2021 Annual Report at 38; Library Reference USPS-FY21-38, Preface at 4.

87 Library Reference USPS-FY21-38, December 29, 2021, Preface at 5; see Surveys at 49-70.
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Dominant products.88 The survey consists of 21 evaluation questions and 2 open-ended 

customer supplied responses. Library Reference USPS-FY21-38, Preface at 5. These 

questions ask large business customers about their overall satisfaction with their recent 

experience with the Postal Service, as well as their usage of and satisfaction with domestic 

and international mail products. See Surveys at 49-70.

b. Performance Indicators

In FY 2021, the Postal Service used eight performance indicators or metrics to track 

progress toward the Excellent Customer Experience performance goal. Seven of those 

performance indicators correspond directly to one of the CX surveys described above.89

Results of these seven CX survey performance indicators are calculated as the percentage 

of customers who responded “Very Satisfied” or “Mostly Satisfied” on a six-point scale to a 

question about overall satisfaction on the particular survey.90 The overall satisfaction 

question for each of the seven CX surveys is shown in Table III-6.

88 Library Reference USPS-FY21-38, Preface at 5. The Commission discusses large business customer satisfaction with Market Dominant 

products in the FY 2021 ACD. See FY 2021 ACD at 229-35.

89 FY 2021 Annual Report at 38. The Large Business Panel survey is the exception. The Postal Service introduced the Large Business Panel as a 

performance indicator in FY 2018 but discontinued this performance indicator in FY 2019. See FY 2018 Analysis at 45. In FY 2019, the Postal 

Service explained that it discontinued using the Large Business Panel performance indicator because business CX was already measured by the 

BSN and BMEU surveys. FY 2018 Annual Report at 21. The Postal Service has continued to administer the Large Business Panel survey since 

FY 2019.

90 FY 2021 ACR at 57; Response to CHIR No. 15, question 2.a.
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Table III-6

Customer Experience Surveys

FY 2021 Overall Satisfaction Questions

Customer Experience Surveys Overall Satisfaction Questions

Business Service Network How satisfied are you with the overall experience 

provided by the Business Service Network?

Point of Sale Thinking about this visit to the Post Office, overall, 

how satisfied were you?

Delivery Thinking about your overall experience with receiving 

mail and/or packages delivered by the Postal Service 

recently, how satisfied are you?

Customer Care Center Live Agent survey: Please tell us how satisfied you 

were with the overall experience provided by the 

Customer Care Center.

Interactive Voice Response survey: Please tell us how 

satisfied you were with the overall experience 

provided by the Postal Service automated system.

Customer 360 Overall, how satisfied are you with the quality of 

service you received in response to the issue?

Business Mail Entry Unit Overall, how satisfied were you with your experience 

at the Business Mail Entry Unit?

USPS.com How satisfied are you with the overall experience 

provided by the USPS.com website?

Source: Library Reference USPS-FY21-38, Preface at 3-5.

The Postal Service uses the result of each of the seven CX survey performance indicators 

to calculate the CX Composite Index, which is the eighth performance indicator tracking 

progress toward the Excellent Customer Experience performance goal. FY 2021 Annual 

Report at 38. The CX Composite Index is a weighted composite based on results of the CX 

survey performance indicators. Id. While each survey measures CX based on specific 

touchpoints or interactions with the Postal Service, the CX Composite Index measures 

overall CX across the most frequently used customer-facing channels. Methodologies for 

calculating results for the Excellent Customer Experience performance indicators are 

discussed in Section B.3.a., infra.

In FY 2021, results of the CX Composite Index, POS, Delivery, C360, USPS.com, and BMEU

performance indicators did not meet their respective targets. FY 2021 Annual Report at 38. 

The Postal Service explains that the CX Composite Index result did not meet its target 

because results of the POS, Delivery, C360, USPS.com, and BMEU performance indicators 

missed their respective FY 2021 targets. Id. Explanations for not meeting FY 2021 targets 

are shown in Figure III-6. See Section B.3.b., infra.
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To improve progress toward the Excellent Customer Experience performance goal in 

FY 2022, the Postal Service states that it will improve the way employees engage with

customers, measure CX in a timely manner, and provide consistent customer service 

across all touchpoints. FY 2021 Annual Report at 40. It notes it “will empower its 

workforce to prevent undesirable CXs by providing actionable data to help them resolve 

customer pain points and improve customers’ experiences.” Id. Plans for meeting FY 2022 

targets are shown in Figure III-6. See Section B.3.b., infra.

2. Comments

The Public Representative observes that results of two performance indicators improved 

compared to FY 2020 and met their respective FY 2021 targets. PR Comments at 5. She 

states that results for the other performance indicators not only missed FY 2021 targets, 

but also declined compared to FY 2020. Id. She concludes that because the CX Composite 

Index missed the FY 2021 target, the Postal Service did not meet the Excellent Customer 

Experience performance goal in FY 2021. Id.

The Prison Policy Initiative (PPI) comments that the Delivery survey excludes people 

without ready access to a phone or Internet service because the survey requires 

participants to respond either by phone or online. PPI Comments at 2. It notes that 

incarcerated people and other groups—including low-income households, residents in 

rural areas, and senior citizens—disproportionately rely on First-Class Mail, and 

incarcerated people are unable to access the Internet or call toll-free telephone numbers. 

Id. PPI observes that some people living in group quarters, such as incarcerated people 

and nursing home residents, may not have access to the phone or Internet. Id. at 3. It 

“encourages the Commission to require that any future CX surveys that target individual 

customers include group-quarters residents in the sample.” Id. at 4.

In its reply comments, the Postal Service responds that although it delivers mail and 

packages to prisons, the prisons’ mailroom is responsible for the final delivery of letter 

and packages to incarcerated individuals. Postal Service Reply Comments at 12. It asserts 

that incarcerated customers’ satisfaction with delivery appears to depend on an external 

body that is responsible for delivering mail and packages directly to incarcerated 

individuals. Id. Thus, it concludes that changing the Delivery survey respondent pool is not 

necessary. Id.

3. Commission Analysis

The Postal Service exceeded FY 2021 targets for the BSN and CCC performance indicators 

but missed FY 2021 targets for the other Excellent Customer Experience performance 

indicators (CX Composite Index, POS, Delivery, C360, USPS.com, and BMEU). FY 2021

Annual Report at 38.
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The Commission finds that the Postal Service partially met the Excellent Customer 

Experience performance goal in FY 2021 because it missed six targets and met or exceeded 

two targets.

PPI asserts that future CX surveys that target individual customers should include in the 

respondent pool group-quarter residents and other customers who lack phone or Internet 

access. PPI Comments at 2-4. The Commission observes that the Delivery survey is mailed 

to a random sample of residential and small/medium business customers. Library 

Reference USPS-FY21-38, Preface at 3. The Postal Service could provide an address to 

allow customers to complete and return the survey by mail.

The Commission recommends that the Postal Service provide Delivery survey customers the 

option of completing the survey by mail.

In the sections below, the Commission describes and compares methodologies for 

calculating performance indicator results, as well as analyzes FY 2021 targets and results. 

The Commission also compares the Postal Service’s measurement of CX to metrics used in 

the private sector and other organizations, including the Net Promoter System (NPS) 

score, the Customer Effort Score (CES), and social media.

a. Performance Indicator Methodologies

This section describes and compares the methodologies for calculating results of the CX 

Composite Index and the seven CX survey performance indicators91 from FY 2018 through 

FY 2021.

(1) Customer Experience Composite Index

The CX Composite Index is a performance indicator that “provides a comprehensive view 

of the customer’s experience across the most frequently used customer-facing channels.”

FY 2021 Annual Report at 38. The result is a weighted composite based on results of the CX 

survey performance indicators. Id. Figure III-5 shows how each performance indicator 

was weighted to calculate the FY 2021 CX Composite Index result. As Figure III-5 shows, 

the performance indicators are grouped into three core areas: Consumer, Business, and 

Delivery experience.

91 The CX Survey performance indicators are the BSN, POS, Delivery, CCC, C360, USPS.com, and BMEU.
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Figure III-5

Customer Experience Composite Index

Weights of Performance Indicators in FY 2021

Source: FY 2021 Annual Report at 38.

The Postal Service calculated the FY 2021 CX Composite Index result of 68.49 in three 

steps. First, the Postal Service determined the FY 2021 result for each CX survey 

performance indicator.92 Second, the Postal Service multiplied the result of each CX survey 

performance indicator by its respective weight listed in Figure III-5. Third, the Postal 

Service added the weighted results together to arrive at the FY 2021 CX Composite Index 

result of 68.49. Table III-7 illustrates the steps for calculating the FY 2021 CX Composite 

Index result.

92 See FY 2021 Annual Report at 38; Docket No. ACR2019, Responses of the United States Postal Service to Questions 1-8 of Chairman’s 

Information Request No. 18, March 3, 2020, question 3. FY 2021 results for the CX survey performance indicators were calculated as the 

percentage of customers who responded “Very Satisfied” or “Mostly Satisfied” on a six-point scale to the overall satisfaction question for the 

corresponding CX survey shown in Table III-6. See Section B.1.b., supra.
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Table III-7

Customer Experience Composite Index

Steps for Calculating the FY 2021 Result

Customer 

Experience 

Survey 

Performance 

Indicatora

FY 2021 Result Weight 

(Percent)

Weighted 

Resultb

Business Service 

Network 97.89 x 10 = 9.79

Point of Sale 84.39 x 15 = 12.66

Delivery 70.41 x 20 = 14.08

Customer Care 

Center 61.85 x 20 = 12.37

Customer 360 33.34 x 20 = 6.67

Business Mail 

Entry Unit 95.66 x 10 = 9.57

USPS.com 67.13 x 5 = 3.36

FY 2021 Customer Experience Composite Index Score 68.49c

a Targets for each of these performance indicators are listed in Table III-10, infra.

b Results are rounded to the nearest hundredth.

c The CX Composite Index score differs slightly from the sum of the weighted results (68.50) due to rounding.

Source: FY 2021 Annual Report at 38.

Table III-8 compares the weights used to calculate CX Composite Index results from 

FY 2018 through FY 2021.

Table III-8

Customer Experience Composite Index

Weights of Each Customer Experience Survey Performance Indicator

FY 2018-FY 2021

Customer Experience Survey 

Performance Indicator

Weight of Customer Experience Composite Index

FY 2018 FY 2019 FY 2020 FY 2021

Business Service Network 10% 10% 10% 10%

Point of Sale 10% 15% 15% 15%

Delivery 20% 20% 20% 20%

Customer Care Center 20% 20% 20% 20%

Customer 360a 15% 20% 20% 20%

Business Mail Entry Unit 10% 10% 10% 10%

USPS.com 5% 5% 5% 5%

Large Business Panel 10% Not Included Not Included Not Included

a The C360 survey was called the Enterprise Customer Care survey from FY 2017 through FY 2019.

Source: FY 2021 Annual Report at 38; FY 2020 Analysis at 67.
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Table III-8 shows that the Postal Service calculated the CX Composite Index result using 

the same methodology from FY 2019 through FY 2021 but used a different methodology in 

FY 2018. The FY 2018 result was calculated based on results of eight CX surveys, including 

the Large Business Panel. Response to CHIR No. 4, question 2.b.i. In FY 2019, the Postal 

Service discontinued using the Large Business Panel performance indicator, and results 

from FY 2019 through FY 2021 were based on results from the seven remaining CX 

surveys.93 Results of the CX Composite Index from FY 2018 through FY 2021 are shown in 

Table I-1. See Chapter I, Section A., supra.

The FY 2022 CX Composite Index target is 72.99, which is 3.91 points lower than the FY 

2021 target (76.90). FY 2021 Annual Report at 33. The Postal Service previously explained 

that it sets the CX Composite Index target based on the targets set for each CX survey 

performance indicator.94 For the CX survey performance indicators that missed their 

respective target in FY 2021, FY 2022 targets are set at or below FY 2021 targets. See 

Section B.3.b., infra. As a result, the FY 2022 CX Composite Index target decreased 

compared to FY 2021. The Postal Service’s method for setting targets is consistent with 

the Commission’s past recommendation that the Postal Service consider the prior year’s 

result when setting the subsequent year’s target. See FY 2019 Analysis at 42-43.

(2) Customer Experience Survey Performance Indicators

Table III-9 shows the methodologies for calculating results of each CX survey performance 

indicator from FY 2018 through FY 2021.

93 Id. question 2.b.ii; FY 2018 Annual Report at 21. CX Composite Index results from FY 2018 through FY 2021 are not comparable. 

Comparability issues are discussed in Chapter II, Section B.2.b., supra.

94 See Docket No. ACR2019, Responses of the United States Postal Service to Questions 1-7 of Chairman’s Information Request No. 5, January 

28, 2020, question 7.a.
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Table III-9

Customer Experience Survey

Performance Indicator Methodologies

FY 2018-FY 2021

Customer 

Experience 

Survey 

Performance 

Indicator

FY 2018 FY 2019 FY 2020 FY 2021

Business 

Service 

Network

Overall customer satisfaction with the Business Service Network

Point of Sale Overall customer satisfaction with the retail experience at the Post Office

Delivery Composite of overall customer satisfaction with the delivery of mail and packagesa

Customer 

Care Center

Composite of satisfaction with the overall experience

provided by the Live Agent (25 percent) and Interactive Voice

Response (IVR) system (75 percent)

Composite of satisfaction 

with the overall 

experience provided by 

the Live Agent and IVR 

system (unweighted)

Customer 360 Overall satisfaction with the quality of service received

in response to issue compared to the same period last year

Business Mail 

Entry Unit 

(BMEU)

Overall customer satisfaction with the BMEU experience

USPS.com Overall customer satisfaction with the experience provided by the USPS.com website

a Delivery survey results for residential and small/medium business customers are combined into one unweighted score.

Source: FY 2021 ACR at 60; Library Reference USPS-FY21-38, folders “USPS-FY21-38” Excel file 

“CX_Composite_ALL_SURVEYS_ProgramOverview_FY21.xlsx;” FY 2020 Analysis at 69.

Table III-9 shows that from FY 2018 through FY 2021, the Postal Service used the same 

methodologies to calculate results for each CX survey performance indicator except for the 

CCC. From FY 2018 through FY 2020, the CCC performance indicator weighted the Live 

Agent survey result 25 percent and the IVR system survey result 75 percent. FY 2021 ACR 

at 58. In FY 2021, the Postal Service states it discontinued weighting the Live Agent and 

IVR system results and instead consolidated all responses into one overall calculation. Id.

It explains that “[t]his decision was based on FY 2020 data which showed an 

approximately 45/55 percent split in response counts for Live Agent and IVR.” Id.

Although this change affected the comparability of results, the Postal Service asserts that 

the impact was minor because there was only a small difference in the FY 2021 CCC result 

calculated using the new methodology (61.85) compared to the former methodology 

(60.14). Id. It states that the impact on the FY 2021 CX Composite Index result was even 

smaller given that the result decreased by only 0.34 points using the new methodology.

Comparability issues are discussed in Chapter II, Section B.2.b., supra.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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b. Analysis of Targets and Results

Table III-10 compares FY 2021 targets and results for each Excellent Customer Experience 

performance indicator and shows the percentage point gaps between targets and results. 

As Table III-10 shows, in FY 2021 the Postal Service met only two targets and missed six 

targets.

Table III-10

Excellent Customer Experience Performance Indicators

Comparison of FY 2021 Targets and Results

Performance Indicator FY 2021 Target FY 2021 Result Performance Gap

Customer Experience Composite Indexa 76.90 68.49 -8.41

Business Service Network 97.20% 97.89% N/A

Point of Sale 90.42% 84.39% -6.03

Deliverya 86.33 70.41 -15.92

Customer Care Centera 60.03 61.85 N/A

Customer 360 55.00% 33.34% -21.66

Business Mail Entry Unit 96.73% 95.66% -1.07

USPS.com 73.41% 67.13% -6.28

 Target Met Target Not Met

a Targets and results for these performance indicators are not presented as percentages because they are calculated by weighting and 

aggregating various survey results.

Source: FY 2021 Annual Report at 38.

Table III-10 shows that FY 2021 results vary significantly from 33.34 percent (C360) to 

97.89 percent (BSN). The FY 2021 BMEU result of 95.66 percent fell slightly short of the 

target (96.73 percent). The CX Composite Index, Delivery, and C360 performance 

indicators experienced the largest performance gaps, with the C360 result missing the 

target by 21.66 percentage points. The reasons given by the Postal Service for missing 

FY 2021 targets and the Postal Service’s plans for meeting FY 2022 targets are listed in 

Figure III-6.
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Figure III-6

Postal Service Reasons for Missing FY 2021 Targets and

Plans for Meeting FY 2022 Targets

a The NP pilot replaced existing Centralized Box Units with NP Boxes, which have larger compartments to accommodate bigger

packages. FY 2021 Annual Report at 39. The Smart Locker pilot allows customers to securely retrieve packages at 10 postal locations in 

Northern Virginia 24/7 through a computer-based parcel locker. Id.; Docket No. ACR2020, Responses of the United States Postal Service 

to Questions 1-13 of Chairman’s Information Request No. 25, March 26, 2021, question 9.b.

Source: FY 2021 Annual Report at 38-40; FY 2021 ACR at 61-71.

Reasons for Missing FY 2021 Target:

Peak season causing unprecedented 

package volume; severe staffing 

challenges; continued delay of mail in the 

network

Plans for Meeting FY 2022 Target: 

Train employees on handling the most 

common issues arising in the field; update 

job aids; coach and mentor employees

Reasons for Missing FY 2021 Target: 

Peak season website and delivery 

performance, which created an 

unprecedented volume of traffic to the 

USPS.com website

Plans for Meeting FY 2022 Target: 

Enhance tracking application; launch 

updated progress bar and updated user 

interface

Reasons for Missing FY 2021 Target: 

Customer issues were not adequately 

resolved; customers were not contacted 

within a reasonable time frame; 

decreased employee availability

Plans for Meeting FY 2022 Target: 

Provide employee training to help them 

resolve common customer inquiries and 

improve initial contact and resolution 

performance

Reasons for Missing FY 2021 Target: 

Challenges of the COVID-19 pandemic; 

increased package volume; decreased 

employee availability

Plans for Meeting FY 2022 Target:

Expand pilots started in FY 2021, including 

the Neighborhood Post (NP) and Smart 

Locker pilotsa

Reasons for Missing FY 2021 Target: 

Impact of the ongoing COVID-19 

pandemic on retail operations

Plans for Meeting FY 2022 Target: 

Conduct employee training and 

development programs; analyze key 

metrics such as wait time in line and 

overall satisfaction

Reason for Missing FY 2021 Target: 

Ongoing COVID-19 pandemic that impacted 

operations, resources, and employee 

availability; record high package volume 

during peak season

Plans for Meeting FY 2022 Target: 

Ensure survey questions accurately 

measure both customer sentiment and 

attributes of customer satisfaction

.com

Customer Experience Composite Index

Point of Sale

Business Mail Entry Unit

USPS.com

Customer 360

Delivery
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The Commission is concerned about results of the Delivery and C360 performance 

indicators, which missed their respective targets by more than 15 points. These 

performance indicators also had the largest declines compared to FY 2020.95 The C360 

performance indicator also had the lowest result of 33.34 percent, which is approximately 

28 points less than the second lowest result (61.85). Targeting the key drivers for overall 

satisfaction represents an opportunity for the Postal Service to improve Delivery and CCC 

performance indicator results. Figure III-7 lists the key drivers for overall satisfaction for 

each performance indicator:

95 The Delivery performance indicator result declined from 80.94 in FY 2020 to 70.41 in FY 2021. The C360 performance indicator result 

declined from 40.05 in FY 2020 to 33.34 in FY 2021. Results from FY 2018 through FY 2021 for each Excellent Customer Experience 

performance indicator are shown in Chapter I, Table I-1, supra.
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Figure III-7

Excellent Customer Experience Performance Indicators

Key Drivers for Overall Satisfaction

Source: FY 2021 ACR at 61-71.
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The Commission recommends that the Postal Service strive to improve Delivery and C360 

performance indicator results in FY 2022 by targeting key drivers of overall satisfaction.

The Postal Service set FY 2022 targets for each Excellent Customer Experience 

performance indicator, which are shown in Table III-11, along with FY 2021 targets and 

results.

Table III-11

Excellent Customer Experience Performance Indicators

FY 2022 Targets and FY 2021 Targets and Results

Performance Indicators FY 2022 Targets FY 2021 Targets FY 2021 Results

Customer Experience Composite Indexa 72.99 76.90 68.49

Business Service Network 97.33% 97.20% 97.89%

Point of Sale 87.46% 90.42% 84.39%

Deliverya 80.94 86.33 70.41

Customer Care Centera 63.02 60.03 61.85

Customer 360 40.05% 55.00% 33.34%

Business Mail Entry Unit 96.72% 96.73% 95.66%

USPS.com 73.41% 73.41% 67.13%

 Target Met Target Not Met

a Targets and results for these performance indicators are not presented as percentages because they are calculated by weighting and 

aggregating various survey results.

Source: FY 2021 Annual Report at 38, 40.

The Commission previously recommended that the Postal Service consider the prior 

year’s result when setting the subsequent year’s target. FY 2019 Analysis at 42-43. The 

Postal Service adopted this recommendation when setting FY 2022 targets. For the two

performance indicators that exceeded their FY 2021 target (BSN and CCC), the FY 2022

targets are slightly higher than the FY 2021 targets. For the performance indicators that 

missed targets, FY 2022 targets are set at or below FY 2021 targets. FY 2022 targets 

appear achievable, although the Delivery performance indicator result would need to 

increase by more than 10 points in FY 2022 to meet its target.

The Commission finds the FY 2022 targets for the Excellent Customer Experience 

performance indicators are reasonable. To improve transparency, the FY 2023 Plan should 

discuss the rationale for setting the FY 2023 targets.

c. Net Promoter System Score

(1) Background

As previously discussed, the Postal Service evaluates progress toward the Excellent 

Customer Experience performance goal based on CX surveys measuring overall 

satisfaction. See Section B.1., supra. The Postal Service also measures CX using the NPS

score, which is a metric that is widely used in the private sector to measure CX more 
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broadly.96 It allows a company to evaluate the totality of customer interactions with the 

company and values the long-term relationship between the customer and company. OIG 

Report No. RARC-WP-17-010 at 7. For example, a customer may be unhappy with a 

misdelivered package, but may continue to patronize the Postal Service because of a long 

history of dependable service and competitive prices. Id. Because of its widespread 

adoption, the NPS allows organizations to benchmark themselves against competitors or 

similar companies. Id. Using the NPS metric allows the Postal Service to evaluate its longterm relationship with customers and benchmark itself against other companies providing 

similar products or services. Id.

The NPS question asks customers how likely they are to recommend a company to a friend

on a scale of 0 to 10. Id. The Postal Service includes the NPS question on each of the CX 

surveys by asking customers how likely they are to recommend the Postal Service to a 

friend or colleague. The FY 2021 NPS question for each of the CX surveys is shown in 

Figure III-8.

96 United States Postal Service, Office of Inspector General, Report No. RARC-WP-17-010, Postal Customer Satisfaction: A Primer of Four 

Surveys, August 28, 2017, at 7, available at https://www.uspsoig.gov/sites/default/files/document-library-files/2017/RARC-WP-17-010.pdf

(OIG Report No. RARC-WP-17-010).
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Figure III-8

FY 2021 Net Promoter Score Questions

Source: Surveys at 6, 17, 31, 45, 77, 80-82.
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(2) Methodology and Results

The NPS question asks customers to rate how likely they are to recommend a company to 

a friend on a scale of 0 (Not at All Likely) to 10 (Extremely Likely). OIG Report No. RARCWP-17-010 at 7. The objective of the NPS score is to gauge how consistently a firm turns 

customers into advocates by tracking and analyzing three customer segments:

• Promoters are so pleased with their experience that they recommend 

the company to others

• Detractors are disappointed with their experience and harm the 

company’s growth and reputation

• Passives feel they got what they paid for but nothing more and are not 

loyal assets with lasting value97

Promoters respond to the NPS question with a score of 9 or 10; Detractors respond with a 

score of 0 to 6; and Passives respond with a score of 7 or 8. The NPS score is calculated by 

subtracting the percentage of Detractors from the percentage of Promoters. Figure III-9

shows the NPS scale, customer segments, and formula for calculating the NPS score.

Figure III-9

Net Promoter System Score

Scale, Customer Segments, and Formula

Source: Ian Luck, How to Calculate Net Promoter Score (NPS) - Easy NPS Calculation Formula, CustomerGauge (April 21, 2022), available at 

https://customergauge.com/blog/how-to-calculate-the-net-promoter-score.

97 Id.; See Fred Reichheld, Darci Darnell, and Maureen Burns, Net Promoter 3.0, Harvard Business Review (November-December 2021), 

available at https://hbr.org/2021/11/net-promoter-3-0/.

% PROMOTERS - % DETRACTORS = NET PROMOTER SCORE
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Table III-12 shows FY 2021 NPS scores and the percentages of Promoters and Detractors 

for each CX survey.

Table III-12

FY 2021 Net Promoter System Score Results

Promoters and Detractors

Customer Experience Survey Percentage of 

Promoters (9-10)a

Percentage of 

Detractors (0-6)a

FY 2021 Net Promoter 

Scoresb

Business Service Network 89.1 2.9 86.2

Point of Sale 78.3 13.0 65.3

Delivery 55.5 26.2 29.3

Customer Care Center 49.3 39.2 10.0

Customer 360 25.9 64.1 -38.3

Business Mail Entry Unit 90.6 4.0 86.6

USPS.com 51.6 31.6 20.0

Large Business Panel 66.2 9.9 56.3

a The percentages of Promoters and Detractors were calculated by the Commission based on disaggregated CX survey response counts 

provided by the Postal Service.

b Some FY 2021 NPS scores do not equal the percentage of Promoters minus the percentage of Detractors due to rounding.

Source: Response to CHIR No. 25, question 2, Excel file “cx_q_resp_counts_fy21_corrected.xlsx.”

Table III-12 shows that in FY 2021, the BSN and BMEU surveys, which measure business 

CX, had the highest NPS scores (approximately 86) and lowest percentage of Detractors 

(2.9 and 4.0 percent, respectively). However, the NPS score for the Large Business Panel 

survey was approximately 30 points lower (56.3), and the percentage of Detractors was 

slightly higher (9.9) compared to the BSN and BMEU surveys. These results show that 

most business customers would recommend the Postal Service to a colleague, but large 

business customers may be less enthusiastic compared to small/medium business 

customers.

The POS survey had the third highest NPS score of 65.3. NPS scores for the Delivery, CCC, 

and USPS.com surveys were lower, ranging from 29.3 (Delivery) to 10.0 (CCC). Each of the 

CX surveys had a higher percentage of Promoters than Detractors except for the C360 

survey, which measures satisfaction with issue resolution for customers who file service 

requests with the Postal Service through a CCC live agent or USPS.com. See Section B.1.a., 

supra. Thus, the C360 NPS score was the only one expressed as a negative number (-38.3). 

The C360 survey also had the highest percentage of Detractors (64.1), which was almost 

two-thirds of C360 survey respondents. Only 25.9 percent of C360 survey respondents 

were Promoters that were highly likely or extremely likely to recommend the Postal 

Service to a friend, family, or colleague.

The Commission recommends that the Postal Service continue to use the NPS score to 

measure and assess CX in FY 2022. The Commission also recommends the Postal Service focus 
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its efforts on improving the C360 NPS score to have a higher percentage of Promoters than 

Detractors.

d. Customer Effort Score

The CES “is a retention or loyalty indicator that measures how easy it is to conduct a 

transaction.” OIG Report No. RARC-WP-17-010 at 7. The CES “[p]rovides actional data 

about how much effort goes into a single transaction in [a] company.”98 The theory behind 

the CES is that customers who easily accomplish their tasks are less likely to patronize 

other service providers. OIG Report No. RARC-WP-17-010 at 7. The CES is applicable 

across postal touchpoints such as mailing packages, purchasing stamps, or resolving 

delivery issues. Id. The CES question asks customers how easy it was to complete a retail 

transaction. Id. It is most effective when added to transactional surveys that evaluate a 

customer’s experience with a specific transaction or interaction with the company. See 

NPS vs CES vs CSAT.

The Postal Service states that it does not use the CES to measure CX, and it has not 

considered including this information into the CX Composite Index score. April 1 Response 

to CHIR No. 26, question 1.b. It explains that the CX Composite Index consists of individual

surveys that collectively measure overall customer satisfaction and that CES scores are 

typically used in conjunction with the NPS score. Id. However, as previously discussed, the 

Postal Service currently uses the NPS score to measure and assess CX. See Section B.3.c., 

supra. Using the overall satisfaction metric along with the NPS score and CES may be 

beneficial because these metrics are complementary. See NPS vs. CES vs. CSAT. Overall 

satisfaction seeks to measure customer satisfaction, while the NPS score and the CES 

provide wider data on customer loyalty. Id. The metrics work in layers:

• The NPS score provides an overview of how customers feel towards a 

company, and if there are larger issues

• Overall satisfaction evaluates how satisfied customers are with specific 

interactions or processes

• The CES measures how easy it is for customers to conduct transactions 

or interact with a company99

Adding the CES question to the CX surveys could help the Postal Service better understand 

how customers perceive the ease of navigating the postal system. OIG Report No. RARCWP-17-010 at 7. Like the NPS, the CES allows the Postal Service to benchmark its 

performance against similar companies and federal agencies because of its widespread 

adoption. Id. For example, using the CES could help the Postal Service understand how 

98 See Ian Luck, NPS vs CES vs CSAT: Which Customer Experience Metric to Use?, CustomerGauge (May 4, 2022), available at 

https://customergauge.com/blog/utilizing-multiple-customer-experience-metrics-nps-csat-and-ces (NPS vs CES vs CSAT).

99 See id.
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easy it was for their customers to complete a retail transaction compared to other 

shipping companies. Id.

Because the CES question is most effective when added to transactional surveys, the Postal 

Service should consider adding the CES question to the POS and USPS.com surveys. As 

previously discussed, the POS survey samples retail customers who conduct transactions 

at Postal Service locations with retail equipment. Similarly, the USPS.com survey samples 

customers who conduct transactions on the USPS.com website. See Section B.1.a., supra.

The POS survey could ask customers how easy it was to conduct their transaction at the 

Post Office or retail facility. The USPS.com survey already asks customers whether they 

were able to accomplish what they wanted to on the website. See Surveys at 82. The Postal 

Service could follow up by adding the CES question to ask customers how easy it was to 

accomplish what they wanted on the website.

The Commission recommends that the Postal Service measure and assess CX using the CES 

and consider adding the CES question to the POS, USPS.com, and other CX surveys.

e. Social Media

Customers are increasingly using the Postal Service’s social media platforms to contact the 

Postal Service.100 For example, customers may use social media to comment on a 

particular retail experience or seek Postal Service responses to questions, complaints, or 

other requests for information. Id. The Postal Service operates multiple social media 

platforms on Facebook, Twitter, Instagram, LinkedIn, and Pinterest. April 1 Response to 

CHIR No. 26, question 4. It explains that these channels support its customer service 

mission through direct customer service or informing the public about postal products 

and services through organic messaging. Id. It states, “[f]ollowing industry best practices, 

the Postal Service will continue to support these channels with informational content and 

direct customer service.” Id. However, the Postal Service notes it does not plan to expand 

its current social media platform outreach in FY 2022. Id.

The Postal Service uses social media mainly to conduct social listening and respond to 

customer inquiries, which are each described below.

(1) Social Listening

Social listening allows companies to track conversations and mentions related to a specific 

topic on social media platforms and analyze them for insights into actions the company 

can take to improve CX.101 Social listening is the process of understanding the online 

conversation about a company’s brand, products, and services. Id. The Postal Service 

Social Business Intelligence (SBI) team “uses social listening to obtain an idea of the 

100 United States Postal Service, Office of Inspector General, Report No. MS-AR-17-006, Social Media Customer Inquiries, May 8, 2017, at 5, 

available at https://www.uspsoig.gov/sites/default/files/document-library-files/2017/MS-AR-17-006.pdf (OIG Report No. MS-AR-17-006).

101 See Harr Gough, Social listening: What it is and why it matters, Qualtricsxm (May 4, 2022), available at 

https://www.qualtrics.com/blog/social-listening/.
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overall conversation about the Postal Service on traditional and social media.” April 25 

Response to CHIR No. 26, question 2.b. The SBI team reviews the following platforms: 

Twitter, Facebook, Instagram, news, web, forums, blogs, radio, TV, Reddit, and reviews. Id.

question 2.a. The SBI team has four career employees and five contractor support roles. 

Response to CHIR No. 29, question 2.a. The Postal Service states it does not plan to expand 

staff on the SBI team “because the current team is adequate for the team’s mission.” Id.

question 2.b. It notes that “[i]f necessary, the SBI team may increase or decrease staffing 

[levels] in the future through contractor support roles.” Id.

The SBI team uses social listening to obtain insights about the Postal Service’s products 

and services, as well as for situational assessment such as natural disasters. Id. question 

3.a. Figure III-10 provides examples of situations assessed and insights gained through 

social listening, as well as the Postal Service’s actions taken in response to these insights.

Figure III-10

Social Listening

Examples of Situations Assessed, Insights Gained,

and Postal Service Actions Taken in Response

a For example, when “change of address” was a trending search term, the Postal Service posted information about change of address on its 

social media channels.

Source: Response to CHIR No. 29, questions 3.a., b.

Situation Assessed

Questions from job 

applicants

Most popular mail-related 

results on search engine 

platforms

Most common customer 

concerns during the 

COVID-19 pandemic

Insight Gained

Questions from job 

applicants are very similar

Customers used search 

engines to find answers to 

questions related to 

change of address and 

similar topics

Customers were 

concerned about COVID19 pandemic safety in both 

delivery and retail 

settings

Actions Taken

Worked with the Human 

Resources department on 

the content of the 

USPS.com website and 

published a blog that

was promoted on social 

media

Used Search Engine 

Optimization results to 

inform the Postal Service’s 

social media contenta

Developed videos that 

described efforts to 

protect customers and 

employees, which were 

promoted on social

media
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The Postal Service’s use of social listening is consistent with other agency best practices 

for improving services using feedback from social media. In a recent report, the 

Partnership for Public Service analyzed the social media presence of federal agencies that 

have a high volume of direct contact with the public.102 This report found that some 

agencies address customer concerns using feedback from social media. Id. at 10. For 

example, if a customer tweets at the Internal Revenue Service (IRS) that a form has the 

wrong phone number, the system alerts team members to investigate and resolve the 

issue. Id. The Postal Service took similar action based on insights gained from social 

listening by, for example, informing customers about the COVID-19 pandemic safety 

measures in both delivery and retail settings.

The Commission finds that the Postal Service is effectively using social listening to provide 

important information to the public and improve services using feedback from social media. 

The Commission recommends that the Postal Service continue to use social listening to 

monitor social media platforms in FY 2022 and future years.

(2) Responding to Customer Inquiries

The Postal Service responds to customer inquiries and concerns primarily on two social 

media platforms: Twitter and Facebook. April 25 Response to CHIR No. 26, question 3.a. 

Customers may contact the Postal Service via its corporate @USPS Facebook page, as well 

as @USPS or @USPSHelp on Twitter. Id. The Social Customer Response (SCR) team 

reviews and responds to customer concerns on the Postal Service’s corporate Twitter and 

Facebook accounts 6 days per week. Id. question 2.b. In FY 2021, the SCR team received 

approximately 21,150 posts per week, amounting to about 3,010 posts per day. Id. These 

numbers represent approximately 17,940 conversations/cases per week amounting to 

about 2,560 cases per day.103

When a customer messages the Postal Service on either Twitter or Facebook, the message 

is answered by a member of the SCR team. April 25 Response to CHIR No. 26, question 3.b. 

The team member then investigates the customer’s issue until it is resolved. Id. The 

process can take anywhere from a few hours or several days depending on the severity of 

the issue, as well as the availability and ability of the investigating area, district, processing 

facility, or local Post Office. Figure III-11 shows the reported number of inquiries the SCR 

team received, responded to, and resolved, as well as the average length of time for 

responding to customer inquiries.

102 Partnership for Public Service, Government for the People: Profiles on the customer experience (October 2019), at 5, available at 

https://ourpublicservice.org/wp-content/uploads/2019/10/Government-for-the-People.pdf (Government for the People).

103 Id. The Postal Service explains that customers who request assistance post a message on Twitter or Facebook. Response to CHIR No. 29, 

question 5. Each message is considered a single post. Id. Customer interaction with the SCR team consists of several posts. Id. This interaction 

is considered a single conversation or case. Id.
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Figure III-11

Social Customer Response Team

FY 2021 Reported Inquiries and Responses

Source: April 25 Response to CHIR No. 26, question 3.c.

The Postal Service states that many customers message @USPSHelp on Twitter for help 

with issues such as package management. Response to CHIR No. 29, question 6.b. The SCR 

team would respond by using the Product Tracking and Reporting system to provide these 

customers with updated package location data. Id. Other customers express concerns 

about their mail delivery or lack of mail delivery due to events such as fires. Id. The SCR 

team would respond by asking customers for their information and provide a liaison to 

their local Post Office management team, along with the contact information for further 

consultation and communication. Id. The Postal Service describes some best practices it 

has put in place to help respond to customer situations and address issues on social media, 

which are shown in Figure III-12:
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Figure III-12

Postal Service Best Practices for Responding

to Inquiries and Issues on Social Media

a This allows the Postal Service to receive customer information that it will not share publicly.

b The LPO management team handles the actual delivery or items for a specific five-digit ZIP Code.

Source: Response to CHIR No. 29, question 10.
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(3) Evaluating Customer Experience using Social Media

Social media comments are a valuable source of customer feedback for federal agencies 

because they may yield different insights from surveys and other customer research. 

Government for the People at 9. Analyzing social media may help organizations such as 

the Postal Service understand how customers view their services and identify areas for 

improvement. Id. The SCR team monitors and evaluates CX on Facebook and Twitter 

through individual audits by the supervisor, who regularly reviews interactions of the SCR 

team members with customers. April 25 Response to CHIR No. 26, question 2.c. The Postal 

Service also sends a customer satisfaction survey to every Twitter customer with a 

question, concern, or inquiry that was closed or resolved. Response to CHIR No. 29, 

question 6.a. The survey asks the customer, “How satisfied are you with the level of 

customer service provided by our Social Customer Response Associate” on a scale of 1 to 

5, with 1 being very dissatisfied, and 5 being very satisfied. Id.

The Postal Service explains that because of Facebook’s internal algorithms, it is unable to 

administer customer satisfaction surveys to customers who message the Postal Service via 

Facebook. Response to CHIR No. 29, question 7.b. It states that the SCR supervisors and 

team leads work with SCR team members “to ensure the Postal Service is providing the 

best customer interaction possible when addressing customer concerns on its @USPS 

Facebook page.” Id.

The Commission commends the Postal Service for its efforts to keep up with private sector 

and other federal agencies by engaging with customers on social media and using social 

media to evaluate CX and obtain other insights. The Postal Service’s efforts to respond to 

customer inquiries on social media in FY 2021 are commendable given the small number of 

staff available to address customer questions and issues. To alleviate the high workload, the 

Commission recommends that the Postal Service consider hiring more employees for the SBI 

and SCR teams, as well as use automated technologies to address the most common issues.
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C. Safe Workplace and Engaged Workforce

1. Background

In FY 2021, the Postal Service used two performance indicators to evaluate progress 

toward the Safe Workplace and Engaged Workforce performance goal. The Total Accident 

Rate measures progress toward improving employee safety. The Survey Response Rate 

measures the employee participation rate for the Postal Pulse survey. Each metric is 

described below.

a. Total Accident Rate

In FY 2021, the Postal Service continued to use the Total Accident Rate as a performance 

indicator to measure progress toward improving employee safety. FY 2021 Annual Report

at 42. The Total Accident Rate is calculated by multiplying the total number of accidents 

during the year by 200,000, which is the average number of annual workhours per 

employee (2,000) multiplied by 100 to standardize accident rates. Id. This number is then 

divided by the annual number of exposure hours. Id. The Total Accident Rate formula is:

Total Number of Accidents x 200,000

Exposure Hours

Id.

The Total Accident Rate result yields an annual accident frequency per 100 employees. A 

lower result is a better outcome. The Total Accident Rate uses the same formula as the 

Occupational Safety and Health Administration Illness and Injury Rate (OSHA I&I Rate), 

which the Postal Service used as its employee safety performance indicator until FY 2016. 

Id. Unlike the OSHA I&I Rate, the Total Accident Rate includes accidents that do not result 

in medical expenses, days away from work, or restrictions from performing full work 

duties.104

The FY 2021 Total Accident Rate result was 13.48, which was better than the FY 2021 

target of 13.75. FY 2021 Annual Report at 42. The Postal Service reports that between 

FY 2020 and FY 2021, the total number of non-recordable accidents increased by 11.17 

104 Id. The Total Accident Rate also includes accidents that result in only property damage, as well as all motor vehicle accidents. Docket 

No. ACR2016, Responses of the United States Postal Service to Questions 1-5 and 7 of Chairman’s Information Request No. 27, March 15, 

2017, questions 4.a., b. Specifically, the Total Accident Rate includes: accidents that resulted in damage of $500 or more to Postal Service 

property regardless of whether an injury was involved; motor vehicle accidents that result in death, injury, or only property damage, 

regardless of cost, who was injured (if anyone), or what property was damaged; and injury, illness, or death of a Postal Service employee on 

Postal Service premises or on the job. Id. The Total Accident Rate excludes other accidents that do not involve Postal Service employees; 

damage of $500 or more to customer property without injury, unless such damage involves a motor vehicle accident; and fire damage of $100 

or more without injury, unless such damage involves a motor vehicle accident. Id.
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percent, and the number of motor vehicle accidents increased by 5.90 percent.105

However, the number of recordable accidents, which is used to calculate the OSHA I&I 

Rate, decreased by 7.01 percent. FY 2021 Annual Report at 43.

The Postal Service states it was able to meet the FY 2021 Total Accident Rate target for 

three main reasons. First, it continued the Safety Intervention and Recognition program 

that tracks District-level performance monthly. Id. at 42. Second, it conducted nearly 2.7 

million workplace and driver observations using the Informed Mobile Safety Observation 

Tool that “tracked compliance with required observations and provided insight into the 

most common unsafe behaviors observed.” Id. Third, the Postal Service realigned the 

Safety Injury Compensation and Medical Services functions into one Occupational Safety 

and Health team, which allowed the Postal Service to provide more data analysis tools and 

refine existing tools. Id. Programs that helped the Postal Service improve employee safety 

in FY 2021 are discussed in more detail below. See Section C.3.a., infra.

The FY 2022 Total Accident Rate target is 13.45, which is lower and therefore more 

difficult to meet than the FY 2021 target of 13.75. See FY 2021 Annual Report at 43. The 

Postal Service explains that it will meet this target by continuing proactive safety and 

prevention efforts designed to address the most frequent workplace hazards, such as dog 

bites; extreme weather events; distracted driving; and slip, trip, and fall injuries. Id. It 

states it will equip local leaders with the tools and awareness training necessary to 

maintain a culture of safety, which includes introducing the Safety and Health 

Management Tool that will be available in FY 2022. Id. It notes it has also designed an 

Occupational Safety and Health Scorecard that combines accident data with injury 

compensation data to help field leadership track the costs and impacts of each accident 

and document efforts to return injured employees to a suitable workplace environment as 

soon as possible. Plans for meeting the FY 2022 target are discussed in more detail below. 

See Section C.3.a., infra.

b. Survey Response Rate

Each year, the Postal Service administers the Postal Pulse survey to all employees to 

measure the level of engagement at the Postal Service. FY 2021 Annual Report at 43. The 

Postal Pulse survey was developed by Gallup, Inc., which contracts with the Postal Service 

to measure employee engagement.

106 Figure III-13 is a copy of the FY 2021 Postal Pulse 

survey.

105 Id. at 43. “Recordable” accidents are those that result in medical treatment (beyond first aid), days away from work, restrictions or transfer 

to another job, death, or loss of consciousness. Recordable accidents must be reported to OSHA. See FY 2016 Analysis at 50 n.66.

106 See Gallup, Inc., Gallup Q12 and Employee Engagement FAQs: Frequently Asked Questions About Employee Engagement and the 

Engagement Survey, at 1-2, available at https://liteblue.usps.gov/emp-engagement/pdf/Employee-Engagement-FAQs.pdf (Gallup FAQ).
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Figure III-13

FY 2021 Postal Pulse Survey

Source: Response to CHIR No. 25, question 9, file “fy2021 usps postal pulse survey.pdf.”
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As shown in Figure III-13, the Postal Pulse survey asks participants to rate their level of 

agreement with 14 statements concerning their work environment on a scale of 1 to 5, 

with higher numbers reflecting either a greater level of employee satisfaction or stronger 

agreement with a survey statement. Item 0 asks employees to rate their level of 

satisfaction with the Postal Service as a place to work. Items 1 through 12 are the 

foundational elements of employee engagement that measure the core elements needed to 

attract, focus, and retain the most talented employees. Gallup FAQ at 2. Engaged 

employees are “involved in, enthusiastic about and committed to their work and 

contribute to their organization in a positive manner.”107 Item 13 was added to the Postal 

Pulse survey in FY 2020 to ask employees to rate their level of agreement with the 

statement, “My immediate supervisor has recently spent one-on-one time with me to 

discuss my workplace needs.” FY 2020 Annual Report at 43. The Postal Pulse survey also 

includes a comment box allowing employees to provide direct feedback regarding positive 

changes seen on their work team.

In FY 2021, the Postal Service evaluated progress toward the Safe Workplace and Engaged 

Workforce performance using the Survey Response Rate as a performance indicator. The 

Survey Response Rate “identifies the level of participation of all potential respondents 

during each survey administration.” FY 2021 Annual Report at 43. To measure overall 

engagement levels of survey participants, the Postal Service uses the Grand Mean 

Engagement Score, which is calculated based on results of the Postal Pulse survey. Id. In 

FY 2021, the Grand Mean Engagement Score was not a performance indicator for the Safe 

Workplace and Engaged Workforce performance goal, which means that no target was 

set.108

The FY 2021 Survey Response Rate result was 25 percent, which was lower than both the 

FY 2021 target of 51 percent and the FY 2020 result of 33 percent. FY 2021 Annual Report 

at 43. The Postal Service identifies three root causes that contributed to not achieving the 

FY 2021 target: an ambitious target, the COVID-19 pandemic, and the organizational 

restructuring. Id. at 44. These root causes are discussed below. See Section C.3.b.(1)., infra.

In FY 2022, the Postal Service is changing the performance indicator for measuring an 

engaged workforce from the Survey Response Rate to the Grand Mean Engagement Score. 

The Grand Mean Engagement Score is derived from the average scores of Items 1-12 and 

is expressed as a number between 1 and 5. The Postal Service explains that it made this 

change because “[a]nalysis of postal data has shown that grand mean engagement scores 

correlate significantly with a variety of key performance metrics, such as improved 

107 United States Postal Service, Brief Guide to the 12 Elements of Engagement, at 1, available at https://liteblue.usps.gov/empengagement/pdf/Brief-Engagement-Guide.pdf.

108 The Postal Service previously explained that setting a target for the Grand Mean Engagement Score “does not incent managers to 

encourage honest survey feedback.” FY 2017 Annual Report at 20 n.3. The Grand Mean Engagement Score is discussed in Section C.3.b.(2), 

infra.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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productivity, improved customer satisfaction, and reduced leave usage, accidents, and 

injuries.” FY 2021 Annual Report at 44.

The FY 2022 target for the Grand Mean Engagement Score is 3.38. Id. To meet this target, 

the Postal Service states it has multiple initiatives underway to improve engagement that 

include stabilizing the pre-career workforce, training frontline supervisors, enhancing 

technical and leadership training programs, and reinforcing managerial performance 

accountability. Id. at 45. Plans for improving employee engagement are discussed below. 

See Section C.3.b., infra.

2. Comments

The Public Representative concludes that the Postal Service partially met the Safe 

Workplace and Engaged Workforce performance goal in FY 2021 because it met the target 

for only one of the two performance indicators used to evaluate progress. PR Comments at 

5. PostCom acknowledges that the Postal Service set more realistic targets compared to 

previous years, but “planned relative improvements vary widely.” PostCom Comments at 

6-7. However, it asserts that “the chosen targets still reflect an apparent effort to craft a 

pleasing narrative rather than achieve improved performance.” Id. at 7. Regarding the 

Survey Response Rate, PostCom states the Postal Service set the FY 2021 target 

“arbitrarily to just exceed more than 50 percent.” Id. PostCom recognizes that the Grand 

Mean Engagement Score may be a useful indictor but asserts that replacing the Survey 

Response Rate performance indicator “seems to be an effort to quelch bad news.” Id. It 

urges the Postal Service to retain the Survey Response Rate as a performance indicator for 

the Safe Workplace and Engaged Workforce performance goal and make efforts to 

improve the response rate. Id.

In its reply comments, the Postal Service responds that given the size of its organization,

an employee survey response rate between 5 and 30 percent is “typical.” Postal Service 

Reply Comments at 8. It asserts that the FY 2021 Survey Response Rate of 25 percent is 

“considered sufficiently representative of its employee population.” Id. It reiterates that 

the Grand Mean Engagement Score correlates significantly with several key performance 

metrics, such as improved productivity, improved customer satisfaction, and reduced 

leave usage, accidents, and injuries. Id. The Postal Service maintains that changing the 

performance indicator does not detract from its emphasis on increasing the Survey 

Response Rate. Id.

3. Commission Analysis

In FY 2021, the Postal Service exceeded the Total Accident Rate target but missed the 

Survey Response Rate target. See FY 2021 Annual Report at 33.

The Commission finds that the Postal Service partially met the Safe Workplace and Engaged 

Workforce performance goal in FY 2021.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

and FY 2022 Performance Plan

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In the sections below, the Commission examines issues related to workplace safety and an 

engaged workforce. The Commission makes observations and recommendations for 

improving performance in future years.

a. Safe Workplace

With regard to workplace safety, the Commission discusses the Total Accident Rate 

performance indicator and explores issues related to motor vehicle accidents.

(1) Total Accident Rate

The Total Accident Rate measures workplace safety, and the result is the annual accident 

frequency per 100 employees. A lower result is a better outcome. Figure III-14 shows 

Total Accident Rate results from FY 2018 through FY 2021.

Figure III-14

Total Accident Rate Results

FY 2018-FY 2021

Source: FY 2021 Annual Report at 33. The Total Accident Rate results provided in CHIR responses differ from 

the numbers reported in the Annual Report to Congress because these numbers are obtained from a dynamic 

database that reflect coding changes or additional claims submitted after the end of the fiscal year. Id. at 43 

n.2.

FY 2021 was the third year the Postal Service met the Total Accident Rate target. As Figure 

III-14 shows, the Total Accident Rate decreased from FY 2018 through FY 2020 and 

increased slightly in FY 2021. The Postal Service uses several data analysis tools to 

improve employee safety and reduce the total number of accidents, which include:

15.09

14.19

13.09

13.48

12

12.5

13

13.5

14

14.5

15

15.5

16

FY 2018 FY 2019 FY 2020 FY 2021

Number of Accidents Per 100 Employees

Fiscal Year
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• Safety and Health Management Tool (SHMT) – tracks accidents, hazards, 

results of inspections, accident investigations, root cause analysis, and 

action plans designed to prevent recurrences

• Injury Compensation Performance Analysis System – tracks workers’ 

compensation data supplied to and by the U.S. Department of Labor, 

Office of Workers’ Compensation Programs

• Enterprise Data Warehouse – tracks accident data from prior years and 

supplies exposure hour information used in calculating the Total 

Accident Rate

• National Performance Assessment (NPA) - detailed scorecard that tracks 

organizational performance for the Total Accident Rate NPA target109

The Postal Service combines all data from these tools related to accidents, workers’ 

compensation, and employee availability into a single Occupational Safety and Health 

Scorecard, which allows it to visualize the complete impact of an accident and/or injury. 

Id. question 6.b. This scorecard “allows field leadership to track the costs and impacts of 

each accident and documents efforts to return injured workers to suitable employment as 

early as possible.” FY 2021 Annual Report at 43. Data on total accident reduction, disability 

compensation reduction, and returning employees to work are “drillable down to the 

facility level and can be exported or enlarged as needed for more detailed discussions 

regarding performance.” Response to CHIR No. 25, question 8.b. The Occupational Safety 

and Health Scorecard color codes each metric to identify those locations that are meeting 

targets and those that are not. Id.

The Postal Service explains that it met the FY 2021 Total Accident Rate target by 

“continuing the Safety Intervention and Recognition program that tracked [D]istrict-level 

performance each month.” FY 2021 Annual Report at 42. This program targets for 

intervention those Districts and Divisions that have high accident rates or show a trend 

toward an increasing Total Accident Rate.110 The District or Division must create an action 

plan that identifies the root cause(s) of accidents and implements activities to minimize 

hazards related to these accidents. FY 2020 Annual Report at 41. The Headquarters 

Occupational Safety and Health team monitors improvement on a weekly basis to 

determine if escalation is necessary. Response to CHIR No. 25, question 4.b. Procedures for 

District or Division intervention are described in the Response to CHIR No. 25, question 

4.b.

109 Response to CHIR No. 25, question 6.a.

110 FY 2020 Annual Report at 41. Specifically, intervention applies when any of the following occur: (1) any District exceeds a Total Accident 

Rate of 6; (2) any Division exceeds a Total Accident Rate of 11; or (3) any District or Division shows a 3 percent or greater increase in the 

number of injured employees receiving workers’ compensation disability compensation payments compared to the same period last year. 

Response to CHIR No. 25, question 4.b.
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The FY 2022 Total Accident Rate target is 13.45, which is lower and therefore a more 

difficult target to meet compared to the FY 2021 target of 13.75. See FY 2021 Annual 

Report at 33. To help meet the FY 2022 target, the Postal Service introduced the SHMT,

which was available for field use on October 1, 2021. Id. at 43. It states this tool will help 

staff identify where process failures and errors have occurred to help prevent future 

accidents. Response to CHIR No. 25, question 7.b. Specifically, the SHMT allows users to 

identify and eliminate hazards, record accidents, document inspection findings, track 

action plans, and perform root cause analysis. Id.

The SHMT offers a user-friendly incident management application that is Artificial 

Intelligence-enabled and mobile-ready, which allows field personnel to take photos, add 

investigative notes, and evaluate events leading up to an accident while at the accident 

location. Id. It allows supervisors to fully investigate any accident and analyze root causes 

leading to the accident, such as lack of training, an unrecognized hazard, or a situation that 

may be addressed through engineering controls. Id. Based on this information, 

management addresses each root cause to prevent recurrences of the same type of 

accident and follows up on corrective actions “to avoid future incidents and perform 

consistent investigations to build prevention knowledge.” Id.

The Commission commends the Postal Service for meeting the Total Accident Rate target for 

the third year in a row. The Safety Intervention and Recognition program appears to have 

been effective in promoting a safe workplace in FY 2021. The FY 2022 Total Accident Rate 

target appears achievable because it is close to the FY 2021 result. The Postal Service’s plans 

for using the SHMT and Occupational Safety and Health Scorecard in FY 2022 are reasonable 

steps toward improving the Total Accident Rate result and employee safety. The Commission 

recommends that the FY 2022 Report explain how the Postal Service used the SHMT to 

improve workplace safety and address root causes leading to accidents and injuries.

(2) Motor Vehicle Accidents

The Total Accident Rate includes motor vehicle accidents. Figure III-15 shows the number 

of motor vehicle accidents and the total number of accidents from FY 2018 through 

FY 2021.
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Figure III-15

Total Accidents and Motor Vehicle Accidents

FY 2018-FY 2021

Source: Response to CHIR No. 25, question 3. The total number of accidents and number of motor vehicle accidents 

provided in CHIR responses differ from the numbers reported in the Annual Report to Congress because these 

numbers are obtained from a dynamic database that reflect coding changes or additional claims submitted after the 

end of the fiscal year. See FY 2021 Annual Report at 43 n.2.

As Figure III-15 shows, motor vehicle accidents represented approximately 32.7 percent 

of the total number of accidents in FY 2021. The number of motor vehicle accidents 

decreased each year from FY 2018 through FY 2020 but increased slightly from 26,210 in 

FY 2020 to 27,800 in FY 2021 (an increase of 6.1 percent). The Postal Service states that in 

FY 2021, it conducted nearly 2.7 million workplace and driver observations using the 

Informed Mobile Safety Observation Tool, which tracks compliance with required 

observations and provides insight into the most common unsafe behaviors observed. 

FY 2021 Annual Report at 42. This tool allowed field personnel “to implement safety 

awareness campaigns and engage employees to correct those unsafe behaviors before 

they resulted in accident or injury.” Id.

In the 10-Year Strategic Plan, the Postal Service states it will modernize its vehicle fleet by 

investing in 50,000 to 165,000 Next Generation Delivery Vehicles (NGDVs) during the next 

10 years. 10-Year Strategic Plan at 32. NGDVs are right-hand drive vehicles for mail and 

package delivery.111 The Postal Service states that NGDVs will improve workplace safety 

111 United States Postal Service, Office of Inspector General, Report No. 21-215-R22, Next Generation Delivery Vehicles – Contract Clauses, 

January 12, 2022, at 1, available at https://www.uspsoig.gov/sites/default/files/document-library-files/2022/21-215-R22.pdf.

FY 2018 FY 2019 FY 2020 FY 2021

Motor Vehicle Accidents 30,028 28,933 26,210 27,800

Total Accidents 94,921 90,316 82,564 85,124

0

20,000

40,000

60,000

80,000

100,000

Number of Accidents
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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for carriers significantly because they have safety features such as an anti-lock braking 

system, air bags, and full climate controls, including air conditioning to aid in heat illness 

prevention. Response to CHIR No. 26, question 6. It notes that NGDVs are designed to 

allow carriers to stand and walk within the cargo area and will optimize the driver’s 

position to perform mail delivery in the most efficient and ergonomic manner. Id.

The Postal Service explains that NGDVs will reduce motor vehicle accidents because they 

are equipped with modern safety features such as backup and 360-degree cameras, an 

automatic electronic parking brake, front/rear bumper sensors, and daytime running 

lights. Id. To help with crash avoidance, NGDVs also include automatic front/rear braking, 

blind spot warning, and a front collision warning system. Id. The Postal Service anticipates 

that it will begin using NGDVs for delivery in late 2023 (FY 2024). Id.

The Commission finds that the Informed Mobile Safety Observation Tool appeared effective in 

promoting motor vehicle accident safety in FY 2021 and recommends that the Postal Service 

continue to use this tool in FY 2022. The Commission commends the Postal Service for 

modernizing its vehicle fleet with NGDVs to help improve carrier safety and ergonomics. The 

Commission recommends that the FY 2022 Report discuss how the Informed Mobility Safety 

Observation Tool and other systems and platforms affected the number of motor vehicle 

accidents in FY 2022.

b. Engaged Workforce

In FY 2021, the Postal Service tracked progress toward the Safe Workplace and Engaged 

Workforce performance goal using the Survey Response Rate as one of the performance 

indicators. The Postal Service also measured employee engagement using the Grand Mean 

Engagement Score. Each of these metrics is explored below.

(1) Survey Response Rate

FY 2021 result. The Survey Response Rate “identifies the level of participation of all 

potential respondents during each survey administration.” FY 2021 Annual Report at 43. In 

the FY 2021 Report, the Postal Service adopted the Commission’s recommendation by 

explaining how the Postal Pulse survey was administered and how the Survey Response 

Rate was calculated. See FY 2020 Analysis at 99. The Postal Service explains that it 

administered the Postal Pulse survey from May 11, 2021 to June 11, 2021. FY 2021 Annual 

Report at 43. It states that non-bargaining employees were sent the survey link by email 

and received a reminder each subsequent week until they responded, or the survey period 

ended. Id.

For bargaining employees, the Postal Pulse survey was administered using three methods: 

a paper survey distributed at the work unit, a paper survey mailed to the employee’s home 

address, and via email, if available. Id. at 43-44. Employees could also access the survey 

through LiteBlue, the Postal Service’s external Internet platform, and were encouraged to 

complete the survey through other communication channels, including email and official 
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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internal postal employee communications. Id. at 44. The Postal Service invited all 

employees to respond to the survey on-the-clock. Id.

The Survey Response Rate result was calculated by dividing the total number of 

employees who responded to at least 1 item for Items 1-12 by the total number of 

employees who received the survey. Id.; Response to CHIR No. 25, question 10. In FY 2021, 

surveys were distributed to 587,472 employees, and 148,396 responded to at least one 

item for Items 1-12. Response to CHIR No. 25, question 10. This calculation results in a 

Survey Response Rate of 25 percent. Id.

Figure III-16 shows the Survey Response Rate results from FY 2018 through FY 2021. In 

FY 2021, the Survey Response Rate result was 25 percent, which is 8 percentage points 

less than the FY 2020 result.

Figure III-16

Postal Pulse Survey Response Rate

Results from FY 2018-FY 2021

Source: FY 2021 Annual Report at 33.

Figure III-16 shows that the Survey Response Rate result has declined each year from 

FY 2018 through FY 2021, falling from a relative high of 42 percent in FY 2018 to 25 

percent in FY 2021. The FY 2021 result did not meet the FY 2021 target of 51 percent. See 

FY 2021 Annual Report at 43. In the FY 2021 Report, the Postal Service identifies three root 

causes that contributed to not achieving the FY 2021 target. First, it asserts the target of 

51 percent was not realistic. Id. at 44. It notes that during the past four survey 

administrations, the Survey Response Rate result “has been steadily declining, with yearto-year changes ranging from 3-5 percent.” Id. It asserts that given this declining trend, it 

42%

38%

33%

25%

0%

10%

20%

30%

40%

50%

FY 2018 FY 2019 FY 2020 FY 2021

Survey Response Reate (%)

Fiscal Year
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was not realistic to expect a 1-year increase of 18 percent to reach the 51 percent target.

Response to CHIR No. 31, question 1.b.

Second, the Postal Service attributes the low Survey Response Rate to the COVID-19 

pandemic. FY 2021 Annual Report at 44. It states that Gallup, the survey administrator, 

verified that employee surveys in general for most of Gallup’s clients had reduced 

response rates during the pandemic. Id. The Postal Service acknowledges that the Survey 

Response Rate could rebound as people return to work but asserts that “the likelihood of 

it increasing to greater than pre-pandemic levels was unlikely.” Id. Third, the Postal 

Service states that it administered the survey 3 days after announcing the organizational 

restructuring. Id. It asserts that “[o]rganizational changes often cause increased employee 

anxiety, which can lead to reduced engagement.” Id.

In FY 2022, the Postal Service is changing the performance indicator for measuring an 

engaged workforce from the Survey Response Rate to the Grand Mean Engagement Score. 

Id. PostCom asserts that this change “seems to be an effort to quelch bad news” and that 

the target reflects “an apparent effort to craft a pleasing narrative rather than achieve 

improved performance.” PostCom Comments at 7. The Postal Service responds that 

changing the performance indicator does not detract from its emphasis on increasing the 

Survey Response Rate. Postal Service Reply Comments at 8.

The Postal Service has the authority to choose its own performance indicators. The Grand 

Mean Engagement Score appears to better reflect employee engagement compared to the 

Survey Response Rate because it is calculated based on scores from the Postal Pulse 

survey. However, the Survey Response Rate remains an important metric for measuring 

employee engagement. The Postal Service asserts that given the size of its organization, 

“an employee survey response rate between 5 percent-30 percent is typical” and that the 

Survey Response Rate of 25 percent is “considered sufficiently representative of its 

employee population.” Postal Service Reply Comments at 8. It states that it does not have 

access to employee survey response rates of similarly sized organizations with more than 

580,000 employees, many of which are bargaining unit employees. Response to CHIR No. 

25, question 11.b.

The FY 2021 Survey Response Rate of 25 percent is consistent with the 2021 response 

rates for the Federal Employee Viewpoint Survey (FEVS), which is administered to all 

federal employees.112 The 2021 response rate for very large agencies (those with more 

than 75,000 employees) was 29 percent, which declined from 41 percent in FY 2020. Id.

Response rates governmentwide declined for all agency sizes between FY 2020 and 

FY 2021. Id.

112 See Office of Personnel Management, Federal Employee Viewpoint Survey Results 2021, at 4, available at 

https://www.opm.gov/fevs/reports/governmentwide-reports/governmentwide-management-report/governmentwide-report/2021/2021-

governmentwide-management-report.pdf (Federal Employee Viewpoint, 2021).
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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The Commission acknowledges that the FY 2021 Survey Response Rate could have been 

affected by the Postal Service’s organizational restructuring announcement as well as 

circumstances outside of the Postal Service’s control, such as the COVID-19 pandemic’s toll 

on everyday life extending for longer than was initially expected.113 However, the 

Commission is concerned that since FY 2018, the Survey Response Rate has declined 

between 4-8 percentage points each year, with a larger decline during each subsequent 

year. To obtain an accurate picture of employee engagement, the Postal Service should 

strive to improve employee survey response rates.

The FY 2021 Report improved compared to past years because it explains how the Postal 

Pulse survey was administered and how the Survey Response Rate was calculated. The 

Commission recommends that the Postal Service continue to include this information in 

future annual performance reports. If the Survey Response Rate continues to decline in FY 

2022, the Commission recommends that the Postal Service investigate and address the root 

causes. The Postal Service should take steps to improve the response rate by, for example, 

designating a specific time to take the survey and prioritizing changes based on feedback 

received from the Postal Pulse survey.

(2) Grand Mean Engagement Score

The Postal Service measures overall employee engagement using the Grand Mean 

Engagement Score. FY 2021 Annual Report at 43. To calculate the Grand Mean Engagement 

Score, the Postal Service first calculates the average (mean) score for each item using the 

5-point survey scale, with 5 being the highest score and 1 being the lowest. Response to 

CHIR No. 25, question 12. Next, the mean scores for Items 1 through 12 are averaged to 

calculate the Grand Mean Engagement Score. Id. Table III-13 shows results for the Grand 

Mean Engagement Score, as well as the mean score for each item on the Postal Pulse 

survey, from FY 2018 through FY 2021.

113 See FY 2021 Annual Report at 44; see also Federal Employee Viewpoint, 2021 at 14.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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Table III-13

Postal Pulse Survey

Grand Mean Engagement Scores and Mean Scores

FY 2018-FY 2021

Postal Pulse Survey Items FY 2018 FY 2019 FY 2020 FY 2021

Item-Specific Mean Scorea

Q0. How satisfied are you with the Postal Service as a place to 

work? 3.59 3.60 3.48 3.52

Grand Mean Engagement Score 3.34 3.36 3.29 3.36

Q1. I know what is expected of me at work. 4.28 4.30 4.26 4.29

Q2. I have the materials and equipment I need to do my work 

right. 3.58 3.61 3.54 3.60

Q3. At work, I have the opportunity to do what I do best every day. 3.77 3.80 3.74 3.81

Q4. In the last seven days, I have received recognition or praise for 

doing good work. 2.86 2.88 2.83 2.91

Q5. My supervisor, or someone at work, seems to care about me 

as a person.

3.46 3.48 3.41 3.48

Q6. There is someone at work who encourages my development. 3.08 3.12 3.01 3.12

Q7. At work, my opinions seem to count. 2.92 2.94 2.85 2.95

Q8. The mission or purpose of my company makes me feel my job 

is important. 3.60 3.61 3.60 3.62

Q9. My fellow employees are committed to doing quality work. 3.42 3.42 3.43 3.42

Q10. I have a best friend at work. 3.07 3.08 3.04 3.10

Q11. In the last six months, someone at work has talked to me 

about my progress. 2.85 2.87 2.73 2.83

Q12. This last year, I have had opportunities at work to learn and 

grow.

3.14 3.17 3.04 3.14

Q13. My immediate supervisor has recently spent one-on-one time 

with me to discuss my workplace needs. N/A N/A 2.73 2.83

N/A – Item 13 was not asked on the Postal Pulse survey for that fiscal year.

a The mean score is the average score for each item on the Postal Pulse survey using the 5-point survey scale, with 5 being the highest score and 

1 being the lowest.

Source: FY 2021 Annual Report at 33; Response to CHIR No. 25, question 13; Docket No. ACR2020, Responses of the United States Postal Service 

to Questions 1-10 of Chairman's Information Request No. 23, March 11, 2021, question 7.d.; Docket No. ACR2019, Responses of the United 

States Postal Service to Questions 1-12 of Chairman's Information Request No. 21, March 19, 2020, question 4.a.; Docket No. ACR2018, 

Responses of the United States Postal Service to Questions 1-4 of Chairman’s Information Request No. 10, February 14, 2019, question 4.a.

Table III-13 shows that the Grand Mean Engagement Score increased from 3.29 in FY 2020 

to 3.36 in FY 2021. FY 2021 Annual Report at 44. The mean score for each item also 

increased slightly between FY 2020 and FY 2021 except for Item 9, which decreased 

slightly. The mean score for Item 1 regarding employee expectations continues to be the 

highest and was also the only item to have a mean score of more than four points. This 
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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indicates that employees have clarity about what is expected of them at work. High mean 

scores for Items 0, 2, 3, and 8 indicate that Postal Service employees are satisfied overall 

with the Postal Service as a place to work, feel that their jobs are important, and have the 

resources and opportunity to do their work right and perform their best every day.

Items 4, 7, 11, and 13 concerning employee recognition or praise, the importance of 

employee opinions, and discussions with supervisors about progress and workplace needs 

continued to have the lowest mean scores in FY 2021. These items were also the only ones 

with mean scores below three points from FY 2018 through FY 2021. These elements of 

employee engagement are important because “[i]ndividuals who receive recognition and 

praise increase their individual productivity, boost engagement among their colleagues, 

are more likely to stay with their organization, and receive higher loyalty and satisfaction 

scores from customers.”114 Employees who feel involved in making decisions typically 

have a greater sense of responsibility or ownership of the process, which can lead to 

better results. Engagement Elements at 114. Also, regular feedback is important so that 

employees can better understand how their contributions make a difference to the 

organization. Id. at 122.

Item 13 asks employees whether their immediate supervisor has recently spent one-onone time with them to discuss their workplace needs. The Postal Service added this item 

to the Postal Pulse survey in FY 2019 to measure the effectiveness of the Next Level 

Connection process, which consists of “a one-on-one conversation between supervisors 

and employees designed to assess and address employee engagement needs[.]” FY 2020 

Annual Report at 43. In the FY 2021 Report, the Postal Service states that “Gallup analysis 

of the survey results showed that supportive conversations with supervisors result in 

higher engagement scores.” FY 2021 Annual Report at 44. In FY 2021, the Postal Service 

reports that more than 1,400 Next Level Connection conversations occurred and were 

documented in the Postal Service’s internal human resources platform. Id. These 

conversations may have helped improve mean scores for Items 11 and 13 regarding 

employee interaction with supervisors about their progress and workplace needs.

FY 2022 target. For FY 2022, the Postal Service set the Grand Mean Engagement Score 

target to 3.38. Id. The Postal Service explains that Grand Mean Engagement Scores have 

increased by 0.01 each year from FY 2016 through FY 2019. Id. at 44-45. The Postal 

Service asserts that the FY 2022 target, which is slightly higher than the FY 2021 result, is 

“aggressive, yet realistic.” Id. at 45.

To meet this target, the Postal Service states there are multiple ongoing initiatives for 

improving employee engagement, such as stabilizing the pre-career workforce, training 

frontline supervisors, enhancing technical and leadership training programs, and 

reinforcing managerial performance and accountability. Id. A key component of the 

114 United States Postal Service, Creating an Engaging Workplace at USPS: The 12 Elements of Engagement, at 108, available at 

https://liteblue.usps.gov/emp-engagement/pdf/Engagement-Resource-Guide.pdf (Engagement Elements).
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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10-Year Strategic Plan is to improve retention among the pre-career workforce. Id.; 10-

Year Strategic Plan at 37. The Postal Service explains it will focus on improving the job 

experience during the first 90 days to help employees feel more engaged and supported 

from the start. FY 2021 Annual Report at 45. It states that several initiatives are designed 

to better equip supervisors to feel more engaged and confident and improve the processes 

for hiring and training supervisors. Id. It notes that it is also reviewing and identifying 

opportunities to improve functional and technical training and leadership programs to 

help ensure both employees and leaders have the knowledge and skills necessary to 

succeed. Id.

The Commission commends the Postal Service for improving the Grand Mean Engagement 

Score in FY 2021 despite the COVID-19 pandemic, organizational restructuring, and other 

factors impacting employee engagement. The FY 2022 target is reasonable considering the 

range of Grand Mean Engagement Scores during the past few years. The Commission 

recommends that the Postal Service continue taking steps to improve mean scores for all 

survey items, especially for Items 4, 7, 11, and 13. The Commission also recommends that the 

Postal Service continue the Next Level Connection conversations and discuss the impact of 

these conversations on the FY 2022 Grand Mean Engagement Score.
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D. Financial Health

1. Background

In FY 2021, the Postal Service used one performance indicator to measure progress 

toward the Financial Health performance goal: Controllable Income (Loss). See FY 2021

Annual Report at 46. The results for the Controllable Income (Loss) performance indicator 

are calculated as the Postal Service’s total revenue minus controllable expenses. Id. at 46. 

Revenue includes funds received from the sale of postage, mailing and shipping services, 

passports, Post Office Box rentals, gains from the sale and lease of property, and interest 

and investment income. Id. at 48.

Controllable expenses consist of compensation and benefits; the Federal Employees 

Retirement System (FERS) and Postal Service Retiree Health Benefits (RHB) normal costs; 

transportation; depreciation; supplies and services; and rent, utilities, and other 

controllable expenses. Id. at 46. Controllable expenses exclude non-controllable expenses, 

which are expenses that the Postal Service contends do not reflect its operational 

decisions and are subject to large fluctuations that are outside of the Postal Service’s 

control. Id. According to the Postal Service, non-controllable expenses include:

• Revaluations of the RHB normal cost by the Office of Personnel 

Management (OPM)

• Amortization of the Postal Service’s unfunded RHB liabilities

• Amortization of the Postal Service’s unfunded liabilities for its

participation in FERS and the Civil Service Retirement System (CSRS)

• Non-cash expenses related to changes in liability for participating in the 

federal workers’ compensation program

Id.

Consistent with historical practice, the Commission published a separate financial analysis 

of the Postal Service's FY 2021 financial results and 10-K statement.115 That analysis 

provides a detailed evaluation of the Postal Service's financial status by examining volume, 

revenue, and cost trends, as well as the Postal Service’s sustainability, liquidity, activity, 

and financial solvency.

In FY 2021, the Postal Service met its target for Controllable Income (Loss). FY 2021 

Annual Report at 33, 47. The Postal Service’s total controllable loss for FY 2021 of $2.4

115 Postal Regulatory Commission, Financial Analysis of United States Postal Service Financial Results and 10-K Statement, Fiscal Year 2021, 

May 18, 2022 (FY 2021 Financial Analysis).
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billion116 was better than its target loss of $5.6 billion. Id. at 48. The Postal Service explains 

that FY 2021 revenue was greater than planned largely due to better-than-expected mail 

volumes and a continued surge in package volumes. Id. However, controllable expenses 

were also $3.0 billion more than the FY 2021 Plan, due generally to salary and benefits, 

transportation, and supply and service expenses that were higher than planned. Id. at 47, 

49.

In the FY 2022 Plan, the target for Controllable Income (Loss) is a $4.1 billion loss, a 

difference of $1.7 billion from the FY 2021 loss of $2.4 billion. Id. at 47. Plans for meeting 

the FY 2022 Controllable Income (Loss) target are discussed in more detail below. See

Section III.D.3.a.(1)., infra.

2. Comments

The Public Representative finds that the Postal Service achieved its target for the 

Controllable Income (Loss) performance indicator. PR Comments at 6. In her view, the 

Postal Service met the Financial Health performance goal for FY 2021. Id.

PostCom comments that the FY 2021 Annual Report does not provide the information 

necessary to accurately assess, and in some respects presents a misleading picture of, the 

Postal Service’s financial health. PostCom Comments at 8. PostCom contends that the 

FY 2021 Annual Report “obscures the Postal Service’s financial condition by selectively 

presenting revenues and costs and ignoring sources of funding.” Id. at 11. PostCom asserts 

that the FY 2021 Annual Report reflects increased operating costs related to the COVID-19 

pandemic, but fails to account for $10 billion in appropriated funds intended to defray 

such costs that the Postal Service received in FY 2021 as a result of the CARES Act.117

PostCom submits that “[t]he Commission should develop better metrics to evaluate [the 

Postal Service’s] [f]inancial [h]ealth.” Id. at 8. PostCom notes that the Postal Service 

reports increased cash holdings and decreased debt at the end of FY 2021 relative to 

FY 2020. Id. (citing FY 2021 Annual Report at 24). PostCom states that “[t]hese are not the 

results of a desperately struggling organization.” Id. PostCom also notes that the Postal 

Service has reported elsewhere that its average daily liquidity balance in FY 2021 was 

$20.7 billion, and PostCom questions whether the Postal Service needs such liquidity.118

PostCom asserts that the FY 2021 Annual Report and the FY 2022 Plan “do not answer 

these questions[,] [a]nd the Commission has not provided the Postal Service with the 

guidance necessary for it to answer these questions in its reports.” Id. Therefore, PostCom 

116 FY 2021 Annual Report at 33, 47. The Postal Service generally describes its Controllable Income (Loss) result throughout the FY 2021 Annual 

Report as a $2.4 billion loss. See, e.g., id. at 47. However, in its table describing its FY 2021-FY 2022 Targets and FY 2018-FY 2021 Actuals for 

Corporate-Wide Performance Outcomes, it lists its total Controllable Income (Loss) as a $2.39 billion loss. Id. at 33. The Postal Service notes 

that numbers in the FY 2021 Annual Report may be rounded for additive purposes. Id. at 47, Table “Revenue and Expenses,” n.1.

117 Id. at 11-12. See Coronavirus Aid, Relief, and Economic Security (CARES) Act, Pub. L. 116-636 § 6001(b) (March 27, 2020), as amended by

Pub. L. 116-260, Division N, Title VIII, § 801, 134 Stat. 1182, 2119 (December 27, 2020).

118 Id. at 9 (citing United States Postal Service, FY 2021 Report on Form 10-K, May 18, 2022, at 45 (Postal Service FY 2021 Form 10-K)).
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argues, “[t]he Commission must develop methods to fairly evaluate the Postal Service’s 

financial condition and determine what levels of liquidity are appropriate.” Id. PostCom 

suggests that one possible approach to conducting such an evaluation might be to 

compare the Postal Service’s financial metrics to those of private sector entities or to posts 

in other countries. Id.

Relatedly, PostCom also argues that the Commission “should...reassess whether the Postal 

Service’s cumulative net losses have any meaningful impact on the Postal Service’s ability 

to provide service or invest in its network, especially when the Postal Service has cash and 

borrowing authority available to it.” Id. at 10. According to PostCom,

The primary driver of the [Postal Service’s] net losses are [RHBrelated] payments [which] the Postal Service did not make to the 

U.S. Treasury. The Postal Service has suffered no consequences for 

failing to make these payments, and there is no indication that the 

Federal government has any intention to collect.119

Similarly, PostCom states that the $10 billion in CARES Act funding,

[H]ighlights the unique position of the Postal Service as a 

government entity...[,]” because “[i]t is simply not realistic to think 

that...Congress would simply allow [the Postal Service] to shut 

down its operations...[;]” hence “the fear that the Postal Service will 

one day run out of money should not be a primary factor driving the 

Commission’s decision making.

Id. at 13.

PostCom notes that the Postal Service’s planned controllable loss for FY 2022—$4.1 

billion—“would be higher than any controllable loss the Postal Service has experienced 

since at least FY 2018.” Id. at 14. PostCom asserts that the Postal Service “provides no 

detailed explanation for this projection[,]” which, PostCom posits, is at odds with the 

Postal Service’s 10-Year Strategic Plan, from which “the Postal Service will hopefully be 

starting to realize benefits...by the end of FY 2022.” Id. PostCom further posits that this 

projection is at odds with the recently enacted Postal Service Reform Act which, among 

other things, cancelled the Postal Service’s remaining liability with respect to prefunding 

RHB benefits.120 PostCom states that in the past, the Postal Service’s financial projections 

have been “overly-pessimistic,” particularly for FY 2021, and it argues that “the 

Commission should not allow overstated fears about the viability of the Postal Service as 

119 Id. See Docket No. RM2017-3, Order on the Findings and Determination of the 39 U.S.C. § 3622 Review, December 1, 2017, at 37-41 (Order 

No. 4257) (providing background with respect to the RHB payment default referred to by PostCom); Docket No. RM2017-3, Revised Notice of 

Proposed Rulemaking, December 5, 2019, at 81-82 (Order No. 5337) (same).

120 Id. See Postal Service Reform Act of 2022, Pub. L. 117-108, 136 Stat. 1127 (April 6, 2022).
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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an enterprise to distract it from its core mission of safeguarding the interests of users of 

the Postal Service.” Id. at 13-15.

The Postal Service replies that to the extent its cash holdings, as reported in the FY 2021 

Annual Report, appear favorable, it is only “because [the Postal Service] has defaulted 

on...RHB and pension payments, and because of the one-time infusion of $10 billion due to 

the CARES Act.” Postal Service Reply Comments at 8-9. The Postal Service maintains that 

“liquidity is but one factor in assessing the Postal Service’s overall financial condition[,]” 

and “the Postal Service has continued to incur net losses even as its cash position has 

improved...and continues to have liabilities that far exceed its assets.” Id. at 9. The Postal 

Service observes that it acknowledged receipt of the CARES Act funding on page 46 of the 

FY 2021 Annual Report, as well as in the Postal Service FY 2021 Form 10-K. Id. at 9 n.27 

(citing Postal Service FY 2021 Form 10-K at 64).

With respect to PostCom’s assertion that the Commission should reassess whether the 

Postal Service’s cumulative losses have any meaningful impact on its ability to operate, the 

Postal Service states that it “has an obligation to be self-sufficient, and this includes 

making statutorily-mandated payments to pay for retirement obligations.” Id. at 10. The 

Postal Service maintains that “[t]here is no legal basis to conclude that [such] obligations 

can simply be ignored[,]” and the Postal Service states that while the PSRA “reduce[d] 

annuitant premiums, officially cancel[led] certain retiree health benefit payments, and 

extend[ed] the RHB Funds’ ability to pay such premiums...[,] the Postal Service [ ]

remain[s] subject to ‘top-up’ payments, and more generally [is] required to pay annuitant 

premiums when the [RHBF] assets are eventually extinguished.” Id. The Postal Service 

states that the PSRA also did not alter the Postal Service’s pension liabilities. Id.

With respect to PostCom’s assertions concerning the Postal Service’s financial projections, 

the Postal Service states that the year-over-year improvement in controllable income in 

FY 2021 was an anomaly, largely due to the COVID-19 pandemic induced increases in 

package volumes. Id. at 10-11. The Postal Service states that “[a]lready in Quarter 3 of 

FY 2021, package volumes began to decline; and they have moreover remained below 

their FY 2021 peak in FY 2022, and controllable loss is accordingly projected to resume its 

trend of increasing year over year....” Id. at 11. Thus, according to the Postal Service, “what 

PostCom perceives as a long-term trend toward financial sustainability is in large part 

illusory.” Id.

3. Commission Analysis

a. Controllable Income (Loss)

In FY 2021, the Postal Service met the target for Controllable Income (Loss). The $2.4 

billion loss for FY 2021 was better than the projected loss of $5.6 billion.

The Commission finds that the Postal Service met the Financial Health performance goal in 

FY 2021.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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Below, the Commission analyzes the Controllable Income (Loss) performance indicator in 

more detail.

(1) Postal Service Report

As in past years, the FY 2021 Annual Report provides an explanation of each component 

that makes up the Controllable Income (Loss) performance indicator. The FY 2021 Annual 

Report includes a table showing revenue and expenses from the IFP and describes each 

category of revenue and controllable expenses. See FY 2021 Annual Report at 47. The 

Postal Service explains how the FY 2021 Controllable Income (Loss) target was met and 

provides a rationale for the FY 2022 target. Id. at 46-50. Additionally, it includes a section 

on non-controllable expenses, which also impact the Postal Service’s financial results. See 

id. at 46. This information improves the transparency and utility of the FY 2021 Annual 

Report by helping interested persons better understand the components of Controllable 

Income (Loss) and how the Postal Service calculates targets and results.

The Commission recommends that the Postal Service continue to include similar information 

on Controllable Income (Loss) in future annual performance plans and annual performance 

reports.

In FY 2021, the Controllable Income (Loss) result was a $2.4 billion loss, which was $3.2 

billion better than the FY 2021 target controllable loss of $5.6 billion. Id. at 48. Figure III17 shows the Controllable Income (Loss) results from FY 2018 through FY 2021.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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Figure III-17

Controllable Income (Loss) Results

FY 2018-FY 2021

Source: FY 2021 Annual Report at 47. Results are rounded to the nearest tenth.

As explained above, the FY 2021 Annual Report includes a table listing the components of 

Controllable Income (Loss), which is adapted as Table III-14.

(2.0)

(3.4)

(3.8)

(2.4)

-4.0

-3.5

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

2018 2019 2020 2021

Controllable Income (Loss)

($ in Billions)
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Table III-14

Integrated Financial Plan

Revenue and Expenses ($ in Billions)

Results and Targets, FY 2018-FY 2022

FY 

2018

FY 

2019

FY 

2020

FY 

2021

FY 

2021

FY 

2022

Result Result Result Target Result Target

Revenue 

First-Class Mail 25.0 24.4 23.8 22.8 23.3 24.2 

USPS Marketing Mail 16.5 16.4 13.9 12.0 14.6 15.2 

Shipping and Packages 21.5 22.8 28.5 29.2 32.0 30.6 

International Mail 2.6 2.5 2.4 2.2 2.2 2.2 

Periodicals 1.3 1.2 1.0 0.9 1.0 1.0 

Othera 3.9 4.0 3.6 3.8 4.0 4.3 

Total Revenue 70.8 71.3 73.2 70.9 77.1 77.5 

Controllable Expenses 

Salaries and benefitsb 47.9 48.9 50.0 49.5 51.4 52.2 

FERS normal cost 3.5 3.5 3.8 4.1 4.1 4.4 

RHB normal costc 3.5 4.0 4.0 3.9 3.9 4.3 

Transportation 7.9 8.2 8.8 8.7 9.7 9.6 

Depreciation 1.7 1.7 1.7 1.7 1.7 1.7 

Supplies and services 3.0 2.8 3.1 3.1 2.9 3.2 

Rent, utilities and otherd 5.3 5.6 5.6 5.5 5.8 6.2 

Total Controllable Expenses 72.8 74.7 77.0 76.5 79.5 81.6 

Controllable Income (Loss) (2.0) (3.4) (3.8) (5.6) (2.4) (4.1)

Non-Controllable Expenses 

RHB normal cost actuarial revaluation (0.1) 0.2 0.1 — (0.3) —

RHBF unfunded liability amortization (0.8) (0.8) (0.8) (0.9) (0.9) (1.0)

FERS unfunded liability amortization (1.0) (1.1) (1.3) (1.4) (1.4) (1.4)

CSRS unfunded liability amortization (1.4) (1.6) (1.8) (1.8) (1.9) (1.9)

Workers’ compensation fair value and other noncash adjustments 1.4 (2.1) (1.6) — 2.0 —

Total Non-Controllable Expenses (1.9) (5.4) (5.4) (4.1) (2.5) (4.3)

Net Income (Loss) (3.9) (8.8) (9.2) (9.7) (4.9) (8.4)

Note: The sum of columns may not equal total due to rounding. FY 2021 Annual Report at 47 n.1.

a Other income includes investment and interest income, gain or loss on sale of and income from the outlease of property. FY 2021 Annual 

Report at 47 n.2.

b Salaries and benefits include workers’ compensation cash benefits. FY 2021 Annual Report at 49.

C The RHB normal cost for FY 2021, which is considered a controllable expense, was $3.9 billion. However, due to a non-controllable actuarial 

revaluation by OPM, this amount was increased by $0.3 billion, which is shown as a non-controllable expense. FY 2021 Annual Report at 49.

d Rent, utilities, and other includes interest expense. FY 2021 Annual Report at 49.

Source: FY 2021 Annual Report at 47; Response to CHIR No. 31, question 1.
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Total revenue in FY 2021 was $77.1 billion, which was $6.2 billion more than planned. 

FY 2021 Annual Report at 47. The Postal Service attributes this to “better-than-expected 

mail volumes and a continued surge in package volumes.” Id. at 48. According to the Postal 

Service, “[t]he COVID-19 pandemic continued to impact the Postal Service’s financial 

health in FY 2021[,]” leading to “significant increases in customer demand for package 

delivery services....” Id. at 46. Revenue for First-Class Mail (primarily consisting of SinglePiece and Presorted letters and postcards) was $23.3 billion, which was $0.5 billion above

the FY 2021 Plan, “mainly due to higher-than-expected volume recovery from the 

pandemic loss.” Id. at 48. Revenue for USPS Marketing Mail (which consists of mail 

weighing less than 16 ounces and not required to use First-Class Mail) was $14.6 billion, 

$2.6 billion above the FY 2021 Plan, also due to “higher-than-expected volume recovery 

from the pandemic loss.” Id.

Shipping and Packages consist largely of Competitive services that can be priced to reflect 

current market conditions, such as Priority Mail and Parcel Select. Id. Revenue from 

Shipping and Packages was $32.0 billion, $2.8 billion more than the planned amount, “due 

to the continued surge in volumes resulting from the pandemic.” Id. Smaller revenue 

sources included International Mail ($2.2 billion), Periodicals ($1.0 billion), and other 

revenue sources ($4.0 billion). Id.; Response to CHIR No. 31.

In FY 2021, total expenses, including interest expense, were $82.0 billion. Id. at 48. Salaries 

and benefits expenses—which include salaries, employee health benefits expenses, and 

workers’ compensation cash outlays—totaled $51.4 billion, which was $1.9 billion more 

than the FY 2021 Plan, due to “an increase in work hours resulting from the continued 

surge in package volumes, especially during peak season.” Id. at 49.

Transportation expenses totaled $9.7 billion, which was $1.0 billion above the FY 2021

Plan; according to the Postal Service, this was “primarily because of the increased need for 

transportation due to volume above plan and inflationary pressures in the trucking 

industry due to supply imbalances.” Id.

The RHB normal cost totaled $4.2 billion, which was $0.3 billion above the FY 2021 Plan. 

Id. However, this was due to an actuarial re-valuation by OPM that the Postal Service

considers non-controllable; the controllable portion of the RHB normal cost was $3.9 

billion, which was equal to the FY 2021 Plan. Id. The FERS normal cost totaled $4.1 billion, 

which was in line with the FY 2021 Plan. Id. Other, less significant, expense categories 

included depreciation (which totaled $1.7 billion, in line with the FY 2021 Plan), supplies 

and services (which totaled $2.9 billion, $0.2 billion below the FY 2021 Plan, “largely due 

to less-than-forecasted use of service contracts”), and rent, utilities, and other expenses 

(which totaled $5.8 billion, $0.3 billion more than the FY 2021 Plan, “primarily due to 

higher-than-anticipated vehicle costs and labor resolutions”). Id.

With total revenue of $77.1 billion and total expenses of $82.0 billion, the Postal Service 

incurred a net loss of $4.9 billion, which was $4.8 billion less than the net loss projected in 
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the FY 2021 Plan. Id. at 47. The Postal Service asserts that “[t]he lower-than-anticipated 

net loss was primarily due to higher revenue than projected and $2.0 billion of non-cash 

adjustments to workers’ compensation liability, partially offset by higher controllable 

expenses than projected.” Id. at 48.

The Postal Service only considers $2.4 billion of the $4.9 billion net loss to have been 

controllable. Id. at 47, 48. It describes the major factors affecting its controllable loss as:

[O]verall customer demand; the mix of postal services and 

contribution associated with those services; the Postal Service’s 

ability to manage its cost structure in line with the shifting volume 

mix; an increasing number of delivery points; increased leave, 

transportation and supplies and services costs associated with the 

COVID-19 pandemic; and legacy costs for retirement and retiree 

health benefits.

Id. at 48.

The Controllable Income (Loss) target for FY 2022 is a $4.1 billion loss, which anticipates 

“a projected $0.4 billion increase in revenue and a $2.1 billion increase in controllable 

expenses compared to FY 2021.” Id. at 49.

The Postal Service states that it expects revenue in FY 2022 to increase by $1.8 billion 

compared to FY 2021. Id. The Postal Service explains that in August 2021, it implemented 

price increases on its Market Dominant products that included the above-consumer price 

index (CPI) sources of rate authority approved by the Commission in Order No. 5763.121

According to the Postal Service, these “increased prices are expected to offset the loss of 

revenue as a result of the effect of mail volume decline due to continued electronic 

diversion.” FY 2021 Annual Report at 49. International revenue is expected to remain flat,

while “other revenue” is expected to increase by $0.3 billion. Id. at 48-49.

The Postal Service anticipates that Shipping and Packages revenue will decrease by $1.4

billion “because of a slowdown in e-commerce growth and attenuation of package volume 

growth due to the pandemic.” Id. at 49. The Postal Service explains that “[c]onsumers are 

expected to increase in-store shopping and the use of pickup services instead of online 

shopping[,] and “competitors are increasing their efforts to capture sources of revenue.” 

Id.

In terms of controllable expenses, the Postal Service reports that salaries and benefits 

expenses are planned to increase by $0.8 billion in FY 2022 “due to wage increases from 

contractual general increases and high cost-of-living adjustments (COLA) based on 

121 Id. See Docket No. RM2017-3, Order Adopting Final Rules for the System of Regulating Rates and Classes for Market Dominant Products, 

November 30, 2020 (Order No. 5763).
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increased inflation.” Id. 49-50. The Postal Service explains that “[t]he cost-of-living 

payment issued in August 2021 (the full impact of which will be reflected in FY 2022) was 

equivalent to approximately $1,935 per year for most full-time employees[,]” which “is 

nearly equal to the impact of COLA payments for the three previous years combined.” Id. at 

50. Furthermore, “[s]alary and benefit expenses are expected to increase despite a 

planned reduction in work hours.” Id.

The Postal Service reports that the FERS normal cost expense in FY 2022 is expected to 

increase by $0.3 billion over FY 2021, “in line with the increased employer compensation 

rate required by OPM.” Id. The controllable portion of the RHB normal cost expense is 

expected to increase by $0.4 billion, “in line with OPM’s most recent request for payment.”

Id.

Transportation expenses are estimated to decrease by $0.1 billion, “largely due to lower 

air transportation costs resulting from a decrease in package volumes, a shift of assigned 

transportation from air to surface, and increased usage of lower-cost commercial 

carriers.” Id. However, “[a]n increase in surface transportation rates is expected to limit 

this reduction.” Id.

Depreciation expenses are expected to remain flat, while supplies and services expenses 

are expected to increase by $0.3 billion. Id. Rent, utilities, and other expenses are expected 

to increase by $0.4 billion “due to increased expenses to support modernization 

investments, as well as inflationary pressures including fuel.” Id. Furthermore, “[r]ent is 

also expected to increase due to an increased investment in annexes for processing 

packages.” Id.

The Postal Service explained that the acquisition and deployment of the new fleet of 

NGDVs, which is currently underway, is not expected to improve the Postal Service’s 

financial health in FY 2022 or FY 2023. Response to CHIR No. 27, question 1; see 10-Year 

Strategic Plan at 32-33. Nevertheless, the Postal Service “expects fuel and maintenance 

expense reductions throughout the expected 20-year service life [of the NGDVs] when 

compared to the projected costs for 50,000 of the current purpose-built delivery fleet 

remaining operational for the same time period.” Response to CHIR No. 27, question 1.

(2) PostCom Comments

In its comments, PostCom raises multiple issues with the FY 2021 Annual Report and 

FY 2022 Plan. As an initial matter, the Commission reiterates that the scope of its review of 

reports and plans under 39 U.S.C. §§ 2803 and 2804 is limited to evaluating whether the 

Postal Service met the performance goals that the Postal Service established for itself and 

providing “recommendations to the Postal Service related to the protection or promotion 

of public policy objectives set out in [Title 39].” 39 U.S.C. § 3653(d).

PostCom first argues that the FY 2021 Report “does not provide the information necessary 

to accurately assess the ‘Financial Health’ of the Postal Service[,]” because “[a]lthough the 
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FY 2021 Report provides basic information on the Postal Service’s finances, including a 

high-level discussion of its controllable income and non-controllable expenses...some of 

the information presented provides a potentially misleading picture of the Postal Service’s 

FY 2021 performance.” PostCom Comments at 8. PostCom argues that the FY 2021 Annual 

Report obscures the Postal Service’s financial condition by selectively presenting costs and 

revenues or other sources of funding, such as the $10 billion in appropriated funds the 

Postal Service received in FY 2021 pursuant to the CARES Act. Id. at 11-12. PostCom 

argues that the Postal Service “cites ‘supplies and services costs associated with the 

COVID-19 pandemic’ as one of the ‘major factors’ impacting its controllable loss[,]” and 

“claims that ‘[i]ncreased use of employee leave and expenditures on personal protective 

equipment have also contributed to increased expenses[,]’” but “does not account for [the 

CARES Act funding][,]” which was “specifically targeted to these pandemic-related costs[,]” 

when discussing its financial performance. Id. at 11 (citing FY 2021 Annual Report at 46, 

48). PostCom asserts that properly accounting for the $10 billion in CARES Act funding 

“turns the $4.9 billion [reported net loss for FY 2021] into a $5.1 billion profit.” Id. at 12.

The Postal Service responds that it acknowledged receipt of the CARES Act funding on 

page 46 of the FY 2021 Annual Report, where the Postal Service stated that “[e]mergency 

legislation, including a $10 billion grant from the [CARES] Act, has helped ensure sufficient 

liquidity to maintain operations.” FY 2021 Annual Report at 46; Postal Service Reply 

Comments at 9 n.27. The Postal Service further explained that:

In 2021, $8.7 billion of the CARES Act funding was spent on 

compensation and benefits, and $1.3 billion was spent on 

transportation expenses. These expenses are included in the 

FY 2021 totals for the “Compensation and benefits” expense line in 

the table on page 24, the “Salaries and benefits” expense line in the 

table on page 47, and the “Transportation” expense line in the 

tables on pages 24 and 47. Further, the $10 billion from the CARES 

Act is reflected in the “Cash and cash equivalents” line and “Total 

net deficiency” line of the table on page 24.

Response to CHIR No. 24, question 2.

The Commission finds the Postal Service’s explanation as to how it accounted for the 

CARES Act funding in the FY 2021 Annual Report to be sufficient, and the Commission finds 

that the FY 2021 Annual Report meets the requirements of 39 U.S.C. § 2804. The financial 

information contained in the FY 2021 Annual Report is consistent with the more detailed 

financial reporting that the Postal Service provided in its Postal Service FY 2021 Form 10-

K. See Postal Service FY 2021 Form 10-K at 4, 45, 64.

PostCom next argues that “[t]he Commission should develop better metrics to evaluate 

[f]inancial [h]ealth[,]” because the Postal Service’s reported cash holdings, reduced debt 

level, and average daily liquidity balance all serve to undermine claims that the Postal

Service needs additional revenue. PostCom Comments at 8-10. Moreover, “[t]he 
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Commission should also reassess whether the Postal Service’s cumulative net losses have 

any meaningful impact on the Postal Service’s ability to provide service or invest in its 

network[,]” given that the “primary driver of the [Postal Service’s] net losses...”—the RHB 

prefunding payments required by the Postal Accountability and Enhancement Act, which 

the Postal Service largely defaulted on—are obligations for which “the Postal Service has 

suffered no consequences...,” and which were cancelled in the recently enacted PSRA.122

The Postal Service replies that to the extent its cash holdings appear favorable, it is only 

because the Postal Service was forced to default on statutorily-required RHB and pension 

payments, and because of the one-time infusion of $10 billion in funding from the CARES 

Act. Postal Service Reply Comments at 8-9. The Postal Service states that despite its 

liquidity, it has continued to incur net losses and its liabilities continue to exceed its assets. 

Id. at 9. The Postal Service maintains that net losses resulting from statutory obligations 

cannot simply be ignored, and the Postal Service argues that while the PSRA reduced some 

of the Postal Service’s legal obligations, particularly with respect to the RHBF, the PSRA 

did not alter the Postal Service’s pension liabilities. Id. at 10.

These arguments by PostCom are beyond the scope of the Commission’s review of the 

Postal Service’s FY 2021 Annual Report and FY 2022 Plan. Pursuant to 39 U.S.C. § 2803, the 

Postal Service is directed to establish performance indicators for purposes of evaluating 

achievement with the Postal Service’s performance goals. 39 U.S.C. § 2803(a)(4). The 

Postal Service has established Controllable Income (Loss) as the performance indicator for 

the Financial Health performance goal, and the Postal Service set a target for the 

Controllable Income (Loss) performance indicator for FY 2021. See FY 2020 Annual Report 

at 49. The purpose of the instant docket is for the Commission to evaluate whether the 

Postal Service met its Financial Health performance goal for FY 2021 and to “provide 

recommendations to the Postal Service related to the protection or promotion of public 

policy objectives set out in [Title 39].” 39 U.S.C. § 3653(d). This does not involve a reassessment of the financial metrics and analyses that the Commission uses in other 

contexts when evaluating the Postal Service’s financial position.123 Furthermore, as the 

Postal Service argues, it cannot simply ignore its legal obligations in its financial reporting, 

and neither can the Commission. The recently enacted PSRA reduces some of the Postal 

Service’s legal obligations beginning in FY 2022, most significantly by removing the $57 

billion liability for past due RHB obligations and eliminating annual payments for RHB 

normal costs and RHB amortization. See PSRA § 102, 136 Stat. 1127, 1138-1140. The 

Commission will, in future dockets and reports, update its analyses of the Postal Service’s 

financial position in light of these changes. The Commission finds the Postal Service’s 

representations with respect to its finances in the FY 2021 Annual Report and FY 2022 Plan 

meet the requirements of 39 U.S.C. §§ 2803 and 2804.

122 Id.; see Postal Accountability and Enhancement Act (PAEA), Pub. L. 104-435 § 803, 120 Stat. 3198, 3251 (2006).

123 See generally Postal Regulatory Commission, Financial Analysis of the United States Postal Service Financial Results and 10-K Statement, 

Fiscal Year 2021, May 18, 2022; see also Order No. 4257 at 146-248.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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Finally, PostCom argues that “[t]he FY 2022 Plan fails to meaningfully describe how Postal 

Service initiatives and secular trends will affect the Postal Service’s Financial Health in the 

upcoming year.” PostCom Comments at 8. PostCom implies that there is reason to suspect 

that the Postal Service’s projected net loss for FY 2022 is exaggerated. Id. at 13-15. 

PostCom asserts that the Postal Service’s financial projections “have been overly 

pessimistic,” particularly FY 2021, for which the Postal Service’s projected controllable 

loss was $3.2 billion worse than the controllable loss that actually occurred. Id. at 13-14. 

PostCom also notes differences between the Postal Service’s cash balance projections for 

FY 2021 in the FY 2021 Plan compared to the Postal Service’s 10-Year Strategic Plan. Id. at 

14. PostCom questions the assumptions underlying the Postal Service’s projected 

controllable loss for FY 2022, particularly in light of the Postal Service’s 10-Year Strategic 

Plan, as well as the recently enacted PSRA. Id. at 14. PostCom argues that the FY 2022 Plan 

“does not provide enough detail to truly assess the basis for the Postal Service’s 

projections—including how much of its capital it plans to spend, what efficiency 

improvements it expects to make, and whether or not...costs will rise in line with inflation

(and if not, why not).” Id. at 14-15.

The Postal Service replies that the year-over-year improvement in controllable income in 

FY 2021 was an anomaly, largely due to pandemic-induced increases in package volumes. 

Postal Service Reply Comments at 10-11. The Postal Service states that “[a]lready in 

Quarter 3 of FY 2021, package volumes began to decline; and they have moreover 

remained below their FY 2021 peak in FY 2022, and controllable loss is accordingly 

projected to resume its trend of increasing year over year....” Id. at 11.

The Commission finds that the FY 2022 Plan meets the requirements of 39 U.S.C. § 2803. 

The financial information contained in the FY 2022 Plan is consistent with the more 

detailed financial projections that the Postal Service provided in its FY 2022 IFP. In the 

FY 2022 IFP, the Postal Service explains in detail the assumptions on which its FY 2022 

projections were based at the time they were made.124 The FY 2022 IFP also explains the 

reasons for divergences from the projections in the Postal Service’s 10-Year Strategic Plan, 

and it provides alternative projections embracing such scenarios as the enactment of RHB 

reform in the PSRA. FY 2022 IFP at 9-10.

(3) Continuing Appropriateness of Controllable Income 

(Loss) as a Performance Indicator

CHIR No. 24 inquired as to the continued appropriateness of the use of Controllable 

Income (Loss) as a performance indicator. CHIR No. 24, question 1.

Controllable Income (Loss) is a non-Generally Accepted Accounting Principle (GAAP)

accounting measure that excludes certain expenses the Postal Service considers “not 

reflective of short-term operational decisions and...subject to large fluctuations outside 

the organization’s control.” FY 2021 Annual Report at 46. These expenses include: 

124 FY 2021 Annual Report at 49 (citing FY 2022 IFP); FY 2022 IFP at 2. The FY 2022 IFP was filed in November 2021.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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revaluations of the RHB normal cost; the amortization of the Postal Service’s unfunded 

RHB liabilities; the amortization of unfunded liabilities for the Postal Service’s 

participation in the FERS and CSRS; and non-cash expenses related to changes in the 

liability for participation in the Federal workers’ compensation program. Id.

In Order No. 5763, issued in FY 2020, the Commission authorized the Postal Service to 

begin using various discrete forms of above-CPI rate authority intended to remedy what 

the Commission found to be specific deficiencies in the postal ratemaking system. See

Order No. 5763. One of the specific forms of above-CPI rate authority that the Commission 

authorized was retirement-based rate authority. Id. at 100-131. This rate authority was 

designed to provide the Postal Service with revenue to address statutorily mandated 

amortization payments for retirement costs, which the Commission determined were 

beyond the Postal Service’s control. Id. In the first rate adjustment proceeding following 

implementation of the rule changes promulgated in Order No. 5763, the Postal Service 

made use of the full amount of retirement-based rate authority available to it.125 Thus, 

CHIR No. 24 inquired as to the Postal Service’s basis for continuing to classify the 

amortization of the Postal Service’s unfunded RHB liabilities and the amortization of 

unfunded liabilities for participation in FERS and CSRS as non-controllable expenses.

In addition to retirement-based rate authority, Order No. 5763 also provided the Postal 

Service with other discrete forms of above-CPI rate authority, including density-based rate 

authority and rate authority for non-compensatory products and mail classes. CHIR No. 

24, question 1.b. (citing Order No. 5763 at 72-99, 181-97). In Docket No. R2021-2, the 

Postal Service made use of the full amount of rate authority available to it under these 

mechanisms.126 Given these changes in the Postal Service’s revenue position, CHIR No. 24 

asked whether the Postal Service had given any consideration to using a standard GAAP 

measure such as net income (loss) as a performance indicator for the Financial Health 

performance goal, rather than Controllable Income (Loss). CHIR No. 24, question 1.b.

The Postal Service states that it classifies RHB, FERS, and CSRS amortization expenses as 

non-controllable because they are subject to large variations which are outside 

management’s control, at least in the short-term. Response to CHIR No. 24, question 1.a. 

The Postal Service asserts that its performance is most effectively measured using those 

revenues and expenses over which postal management has a greater degree of influence. 

Id. The Postal Service argues that the retirement-based rate authority does not make RHB, 

FERS, and CSRS amortization expenses or their impacts on the Postal Service’s net income 

more predictable, since the amount of authority granted in any given year is independent 

of the amortization expenses themselves. Id. Moreover, the Postal Service asserts that the 

retirement-based rate authority does not generate sufficient revenue to completely offset 

amortization expenses, because it affects only revenue generated from Market Dominant 

125 See Docket No. ACR2020, Determination of Available Market Dominant Rate Authority, April 6, 2021, at 4-6 (Order No. 5861); Docket No. 

R2021-2, United States Postal Service Notice of Market Dominant Price Change, May 28, 2021, at 3 (Docket No. R2021-2 Notice).

126 Id. at n.4 (citing Order No. 5861 at 2-4, 6); Docket No. R2021-2 Notice at 3.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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products, and because it is subject to a gradual phase in. Id. Therefore, the Postal Service 

states that it intends to continue classifying RHB, FERS, and CSRS amortization expenses 

as non-controllable. Id.

The Postal Service adds that it intends to continue using Controllable Income (Loss) as a 

performance indicator, rather than net income (loss). Id. question 1.b. The Postal Service 

maintains that Controllable Income (Loss) remains more relevant than net income (loss) 

because non-controllable expenses are subject to large swings over which postal 

management has virtually no influence. Id. By way of example, the Postal Service explains 

that “the non-cash change in workers’ compensation liability has varied from -2.2 billion 

to +2.2 billion in the last five years alone, due to changes in [the] discount rate, inflation 

and actuarial assumptions over which management has no control.” Id. The Postal Service 

argues that the additional rate authority granted in Order No. 5763 “has no impact on the 

unpredictability of [ ] non-controllable expenses[,]” and “has no impact on the 

predictability of income within a given year, since the authority granted in any year is 

unrelated to the amortization expenses in that same year.” Id. Thus, the Postal Service 

contends that “there is no reason why the provision of density-based and retirementbased rate authority would impact the decision to use [C]ontrollable [I]ncome ([L]oss) as 

a performance indicator instead of net income (loss).” Id.

The Commission notes that shortly after the Postal Service filed its response to CHIR No. 

24, the PSRA was enacted, which made a number of significant changes with respect to the 

Postal Service’s retirement obligations. See PSRA § 102, 136 Stat. 1127, 1138-1140. 

Specifically, it removed the $57 billion liability for past due RHB obligations and 

eliminated annual payments for RHB normal costs and RHB amortization. See id. This 

removed two major sources of non-controllable expenses—revaluations of the RHB 

normal cost by OPM and the amortization of unfunded RHB liabilities. With respect to the 

amortization of the Postal Service’s unfunded FERS and CSRS liabilities, it may be true, as 

the Postal Service asserts, that the retirement-based rate authority does not generate 

sufficient revenue to completely offset amortization liabilities, but it does generate 

sufficient revenue to offset a significant portion of them.

The enactment of the PSRA, in conjunction with the retirement-based rate authority adopted 

by the Commission in Order No. 5763, have resulted in a substantial reduction in the Postal 

Service’s non-controllable expenses since the beginning of FY 2021. The PSRA eliminated 

payments for both RHB amortization and RHB normal costs, while Order No. 5763 

authorized the Postal Service to collect revenue for FERS and CSRS amortization payments. 

The Commission recommends that the Postal Service revise the existing Controllable Income 

(Loss) performance indicator in future reports to exclude revenues accumulated from the 

retirement-based rate authority. This change would ensure that revenues collected using the 

retirement-based rate authority are excluded from the Controllable Income (Loss) metric.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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b. Other Performance Measures

Although not used as performance indicators, the Postal Service also includes in the 

FY 2021 Annual Report results for Total Factory Productivity (TFP) and labor productivity.

FY 2021 Annual Report at 51. As the Postal Service explains, TFP measures how efficiently 

the Postal Service uses its resources, based on the ratio of work completed to resources 

used. Id. “Work completed” includes three primary components: the number of delivery 

points; mail volume weighted by product type; and miscellaneous output (such as other 

services the Postal Service provides, including passport services). Id. An increase in TFP 

indicates that the ratio of work completed to resources used is increasing, i.e., that the 

Postal Service as an organization is operating more efficiently, whereas a decrease in TFP 

indicates the opposite. Id.

Similarly, labor productivity measures the efficiency of labor in producing a unit of 

workload per unit of labor. Id. An increase in labor productivity indicates that more 

workload is being handled per unit of labor, i.e., that labor is more efficient, whereas a 

decrease in labor productivity indicates the opposite. Id.

The Postal Service states that TFP increased significantly between FY 2009 and FY 2015 

but began declining in FY 2016. Id. The Postal Service reports that TFP for FY 2021 was a 

0.7 percent improvement relative to FY 2020. See id. The Postal Service states that “[t]he 

increase can largely be attributed to an increase in labor productivity from a more costeffective workforce and additional volume.” Id. Furthermore, “there were cost savings 

captured in supplies and services when compared to the initial stage of the COVID-19 

pandemic in FY 2020.” Id. In addition, the Postal Service also states that “an organizational 

restructure occurred in FY 2021 to improve operational efficiencies across the nation.” Id.

The Postal Service reports that labor productivity for FY 2021 increased 0.5 percent 

relative to FY 2020, “marking the eleventh time in the last twelve years that labor 

productivity has been positive.” See id. For both TFP and labor productivity, the Postal 

Service cautions that “resource usage is based on constant-dollar amounts of labor, capital, 

and materials used.” Id. Therefore, “[b]ecause some productivity improvements take years 

for the effects to be realized, it is more informative to consider changes in TFP and labor 

productivity over a period of years, rather than year to year.” Id.

Figure III-18 reflects the change in TFP and labor productivity from FY 2007 through 

FY 2021.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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Figure III-18

Total Factor Productivity and Labor Productivity Results

FY 2007-FY 2021

Source: FY 2021 Annual Report at 51.
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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The Commission appreciates the Postal Service providing this information, as the 

Commission has recommended in the past. See, e.g., FY 2020 Analysis at 119. Even though 

these two measures are not performance indicators, they provide additional transparency

into productivity trends.

The Commission recommends that future annual performance reports continue to include 

information on both the TFP index and other productivity measures.

c. Need for an Additional Performance Indicator

FY 2021 was the first fiscal year for which the Postal Service used only one performance 

indicator—Controllable Income (Loss)—to measure progress towards its Financial Health 

goal. Prior to FY 2021, the Postal Service always relied on two performance indicators: 

one a measure of income (or loss) and the other a measure of productivity. The 

performance indicator used to measure productivity was historically based on the number 

of annual deliveries completed per employee workhour, and was, in its final iteration, 

referred to as Deliveries per Total Workhours (DPTWH) % Change.127

In the FY 2021 Plan, the Postal Service reported that it would cease using DPTWH % 

Change as a performance indicator. FY 2020 Annual Report at 52. The Postal Service stated 

that DPTWH % Change was “too vulnerable to the changing mail mix, erosion of delivery 

coverage[,] and delivery point expansion[,]” and that “[w]ork hours associated with 

packages are higher than letters and flats and fewer pieces per delivery makes this metric 

unachievable and an inaccurate measure of overall organizational efficiency.”128

The Commission noted that in past analyses it had identified issues with using DPTWH %

Change as a performance indicator and had recommended that the Postal Service use TFP 

instead to measure productivity improvements. FY 2020 Analysis at 118. Specifically, the 

Commission has observed that the resource inputs used to estimate workload were not as 

refined or comprehensive as those used for the TFP index, and eliminating workhours 

appeared to make the DPTWH % Change result less comprehensive. Id. (citing FY 2016 

Analysis at 73). The Commission has also noted that it was unclear whether the workload 

adjustment was accurate or complete. Id. (citing FY 2016 Analysis at 73).

Nevertheless, the Commission noted that it was also concerned that the Postal Service 

would not replace DPTWH % Change with another performance indicator in FY 2021. Id. 

The Postal Service stated that its Executive Leadership Team and Board of Governors 

would approve FY 2022 performance indicators and targets in November of FY 2021 and 

127 See FY 2013 Analysis at 23; FY 2014 Analysis at 40; FY 2015 Analysis at 57; FY 2016 Analysis at 67; FY 2017 Analysis at 63; FY 2018 Analysis 

at 68; FY 2019 Analysis at 78; FY 2020 Analysis at 108.

128 Docket No. ACR2020, Responses of the United States Postal Service to Questions 1-5 of Chairman’s Information Request No. 8, February 5, 

2021, question 3.a. (Docket No. ACR2020 Response to CHIR No. 8).
Analysis of FY 2021 Performance Report Evaluation of Performance Goals

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would be asked to consider the utility of efficiency metrics.129 However, the FY 2022 Plan 

does not contain such a metric.

The Commission continues to be concerned that, as the Commission explained in the 

FY 2020 Analysis, Controllable Income (Loss) alone does not provide a complete and 

balanced picture of the Postal Service’s progress toward the Financial Health performance 

goal. See FY 2020 Analysis at 118. Controllable Income (Loss) captures only one aspect of 

financial health, which should also be evaluated using other important metrics such as 

ones that measure operational efficiency or financial ratios based on the Postal Service’s 

financial statements. Establishing a more comprehensive set of performance indicators 

would provide more insight into the Postal Service’s progress towards achieving the 

Financial Health performance goal.

The Commission continues to recommend that the Postal Service adopt additional 

performance indicators for measuring progress towards the Financial Health performance 

goal. Specifically, the Commission advises that the Postal Service consider using either TFP or 

labor productivity as performance indicators.

129 Docket No. ACR2020 Response to CHIR No. 8, question 3.d.
Analysis of FY 2021 Performance Report Strategic Initiatives

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CHAPTER IV: STRATEGIC INITIATIVES

A. Background

39 U.S.C. § 2802 requires the Postal Service to prepare a strategic plan that contains 

strategic goals, which are general, outcome-related goals and objectives for its major 

functions and operations. See 39 U.S.C. § 2802(a)(2). On March 23, 2021, the Postal Service 

issued the Delivering for America Plan, a new strategic plan to achieve financial 

sustainability and service excellence during the next 10 years. See 10-Year Strategic Plan. It 

states that the 10-Year Strategic Plan seeks to achieve the four performance goals:

• High-Quality Service by delivering at least 95 percent of all mail and 

packages on-time, at all times during the fiscal year

• Excellent Customer Experience by improving customer satisfaction 

with services provided through every primary touchpoint measured by 

the CX surveys130

• Safe Workplace and Engaged Workforce by creating a safe workplace 

and increasing employee engagement

• Financial Health by achieving a break-even (net income > $0) 

cumulative net income over the next 10 years131

To help achieve these goals, the Postal Service states that it “has implemented a portfolio of 

strategic initiatives and a rigorous portfolio management process...based on wellestablished methods to apply strategic and financial rigor to decision making and to 

navigate significant organizational changes.” FY 2021 Annual Report at 52. It states that 

“[t]he portfolio of [strategic] initiatives is dynamic and changes as priorities and resources 

change, and as programs are completed or adjusted based on external events.” Id. In FY 

2021, the Postal Service implemented a portfolio of 12 strategic initiatives, which are 

shown in Figure IV-1. This figure also describes each of these strategic initiatives and 

shows how they align to the performance goals.

130 The CX surveys are discussed in Chapter III. See Chapter III, Section B.1.a., supra.

131 FY 2021 Annual Report at 32; Docket No. ACR2020, Responses of the United States Postal Service to Questions 2-3 of Chairman’s Information 

Request No. 27, April 9, 2021, question 2.b.ii. The Postal Service states that the strategic goals are the same as the four performance goals, 

which the Postal Service refers to as “corporate performance outcomes.” Response to CHIR No. 21, question 1.a.
Analysis of FY 2021 Performance Report Strategic Initiatives

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Figure IV-1

FY 2021 Strategic Initiatives and Corresponding Performance Goals

Strengthen the value of mail and 

sustain public service mission, 

including 6-Day delivery, by: 

• increasing the value of mail to 

senders by using new datadriven tools and promoting 

digital integration, and 

• developing new programs, 

resources, and offerings that 

benefit businesses of all sizes, 

including enhancing Informed 

Delivery and Informed Visibility 

and mail promotions and 

incentives.

Implement service standards 

that achieve service 

excellence 95% of the time

by:

• modifying service standards 

for letter- and flat-shaped 

First-Class Mail and 

• modifying service standards 

for First-Class Package 

Service.

Innovate and launch USPS 

Connect by:

• supporting a new product 

offering, USPS Connect, 

which is a diverse suite of 

scalable and customizable 

solutions for businesses to 

reach their customers, 

including Local, Regional, 

National, and Returns 

offerings.

Optimize transportation to 

become more efficient and 

predictable by:

• redesigning the surface 

transportation network, 

• reducing reliance on air 

transportation for certain 

classes of mail, and 

• deploying a state-of-the-art 

platform for end-to-end 

execution of a unified 

logistics operation.

Modernize delivery vehicle fleet, 

and with Congressional support, 

implement electric fleet by 2035

by: 

• upgrading the fleet, including the 

purchase and deployment of the

Next Generation Delivery Vehicles, 

and 

• leveraging new technology to 

improve safety and comfort 

and increase delivery efficiency 

by providing more space for 

mail and packages.

Implement best-in-class 

processing operations by: 

• modernizing the Postal 

Service’s operating plans, 

and

• investing in the logistics and 

processing network, 

including processing 

equipment investments, 

technology upgrades, and 

facility footprint 

realignment.

Excellent Customer Experience

High-Quality Service Safe Workplace and Engaged Workforce

Financial Health
Analysis of FY 2021 Performance Report Strategic Initiatives

and FY 2022 Performance Plan

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Source: FY 2021 Annual Report at 53; Response to CHIR No. 21, question 2.a.; see 10-Year Strategic Plan at 22-39.

Optimize surface and air 

transportation 

Align organizational structure 

to support effectiveness by: 

• designing a high-performing 

organization with greater line 

of sight from strategy to 

business outcomes focusing 

on Retail and Delivery, 

Logistics and Processing, and 

Commerce and Business, 

• accepting and delivering mail 

more efficiently, 

• processing mail and packages 

more efficiently, and 

• utilizing infrastructure to 

enable growth.

Modernize retail Post Offices by:

• transforming retail locations 

into a destination center for 

local business providing expert 

shipping and mailing solutions, 

including the alignment of retail 

locations to meet evolving 

customer needs, and 

• expanding partnerships with 

government partners to 

provide additional services to 

include passport services and 

fingerprint/biometric capture.

Implement a more rational 

pricing approach, including a 

judicious implementation of 

new and existing pricing 

authorities, by: 

• applying new Commission 

rules on Market Dominant 

pricing above CPI, and 

• reviewing all Competitive 

postal products and services 

for opportunities to drive 

higher revenue based on 

needs.

Support legislative and 

administrative actions by:

• creating a legislative and 

administrative framework that 

aligns with the Postal Service’s 

needs,

• requesting the integration of 

Medicare with Postal Service 

health plans, 

• requesting the elimination of 

pre-funding obligations 

stemming from the PAEA, and 

• correcting the unfair allocation 

of Civil Service Retirement 

System benefits for legacy Post 

Office Department employees.

Implement best in-class 

delivery operations to 

enhance delivery operations 

by: 

• driving operational precision,

• optimizing delivery units,

• modernizing route structures,

• investing in employees, 

technology, and systems, and 

• deploying sortation 

equipment to delivery units.

Excellent Customer Experience

High-Quality Service Safe Workplace and Engaged Workforce

Financial Health

Stabilize and empower 

workforce to hire, develop, and 

retain capable and diverse 

employees by:

• reducing non-career employee 

turnover by half,

• expanding career planning 

programs, 

• elevating front-line leadership 

capabilities, 

• establishing an Executive 

Diversity Council, and 

• enhancing employee safety 

and wellbeing.
Analysis of FY 2021 Performance Report Strategic Initiatives

and FY 2022 Performance Plan

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The Postal Service explains that “[e]ach strategic initiative has a specific set of measures to 

track performance aligned to optimize [both] short-term performance and build long-term 

capabilities.” FY 2021 Annual Report at 52. To evaluate its performance in implementing 

each strategic initiative, the Postal Service states it “continuously measures its variance 

against the critical milestones to achieve its intended corporate performance 

outcomes/goals, measures, and annual targets.” Response to CHIR No. 21, question 2.b. The 

performance measures for the strategic initiatives are the same as the performance 

indicators for each performance goal. See id.

In FY 2022, the Postal Service “refined the supporting initiatives to adapt to changing 

conditions in the market, feedback from customers and the PRC, input from employees, and

lessons learned from FY 2021 progress.” FY 2021 Annual Report at 52. It will use the same 

portfolio of strategic initiatives in FY 2022. Id. at 53. For FY 2022, the Postal Service will 

use the same set of performance indicators and targets to assess both its corporate 

performance outcomes/goals and its performance in implementing each strategic 

initiative. See Response to CHIR No. 21, question 2.b.

B. Commission Analysis

None of the commenters discussed the strategic initiatives or the 10-Year Strategic Plan. In 

the FY 2020 Analysis, the Commission made the following recommendations regarding the 

strategic initiatives:

• Explain how the strategic initiatives relate to the performance goals and 

performance indicators

• Identify each strategic initiative the Postal Service used in FY 2021

• Describe the Postal Service’s progress toward completing each strategic 

initiative during FY 2021, and identify performance measures and results, 

if applicable

• Describe each strategic initiative the Postal Service will use in FY 2022, 

and provide performance measures and targets

• Explain how the strategic initiatives changed between FY 2021 and 

FY 2022132

The Postal Service adopted these recommendations. In the FY 2021 Annual Report, the 

Postal Service identifies each strategic initiative used in FY 2021 and aligns them with one 

or more performance goals. See FY 2021 Annual Report at 53. The Postal Service states that 

each strategic initiative was refined to adapt to changing market conditions, feedback from 

customers and the Commission, input from employees, and lessons learned from FY 2021 

132 FY 2020 Analysis at 136-37.
Analysis of FY 2021 Performance Report Strategic Initiatives

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progress. Id. at 52. Because the strategic initiatives correspond with the performance goals, 

the FY 2021 Annual Report contains explanations of how the strategic initiatives changed 

between FY 2021 and FY 2022.

The Postal Service describes each strategic initiative and identifies performance measures 

and FY 2022 targets. Response to CHIR No. 21, question 2. Because the performance 

measures used to assess the strategic initiatives are the same as the performance 

indicators used to assess corporate performance outcomes/goals, the FY 2021 Annual 

Report contains descriptions of the Postal Service’s progress toward completing each 

strategic initiative during FY 2021.

The Postal Service included descriptions of each strategic initiative in the FY 2020 Annual 

Report, but not the FY 2021 Annual Report. See FY 2020 Annual Report at 57. Providing 

these descriptions in the Annual Report instead of a CHIR response promotes transparency 

by allowing interested persons to learn what strategic initiatives are without referring to a 

separate CHIR response. The FY 2022 Annual Report could also be improved by describing 

in more detail how each strategic initiative was refined.

In the FY 2022 Annual Report, the Commission recommends that the Postal Service:

• Identify and describe each strategic initiative the Postal Service used in 

FY 2022

• Explain how the strategic initiatives relate to the performance goals and 

performance indicators

• Describe the Postal Service’s progress toward completing each strategic 

initiative during FY 2022, and identify performance measures and results, if 

applicable

• Describe each strategic initiative the Postal Service will use in FY 2023, and 

provide performance measures and targets

• Explain in detail how the strategic initiatives changed between FY 2022 and 

FY 2023
Analysis of FY 2021 Performance Report Appendix A

and FY 2022 Performance Plan Page 1 of 7

Appendix A: Commission Findings and 

Recommendations

Chapter II - Compliance with 39 U.S.C. §§ 2803 and 2804:

• The Commission finds that the FY 2022 Plan complies with all requirements of 

39 U.S.C. § 2803(a).

• The Commission finds that the FY 2021 Report complies with 39 U.S.C. § 2804(b)(1). To 

comply with 39 U.S.C. § 2804(b)(1) next year, the FY 2022 Annual Performance Report 

(FY 2022 Report) must set forth the same performance indicators and targets as the 

FY 2022 Plan and compare FY 2022 targets and results for each performance 

indicator.

• The FY 2022 result for each performance indicator must be comparable to the 

corresponding FY 2022 target set in the FY 2022 Plan. If a comparable FY 2022 result 

is not provided, the FY 2022 Report must include the following:

1. Explain why a comparable result cannot be provided; and

2. Address the lack of comparability by explaining either of the following:

a. How to compare results between the current and former 

methodologies; or

b. Why making this comparison is not feasible.

• The Commission recommends that the Postal Service not change performance 

indicators, methodologies, or targets once they are set for a given fiscal year.

• The Commission finds that the FY 2021 Report substantially complies with 39 U.S.C. 

§ 2804(c). To comply with 39 U.S.C. § 2804(c) next year, the FY 2022 Report must 

include comparable results for each performance indicator for FYs 2019, 2020, 2021, 

and 2022. To be comparable, results for each fiscal year must be calculated and 

expressed using the same methodology. If comparable results from FY 2019 through 

FY 2022 are not provided for any performance indicator, the FY 2022 Report must 

include the following:

1. Identify each performance indicator with non-comparable results from 

FY 2019 through FY 2022;

2. Explain why results are not directly comparable from FY 2019 through 

FY 2022; and
Analysis of FY 2021 Performance Report Appendix A

and FY 2022 Performance Plan Page 2 of 7

3. Address the lack of comparability by explaining either of the following:

a. How to compare results from FY 2019 through FY 2022 between the 

current and former methodologies; or

b. Why making this comparison is not feasible.

• The FY 2022 Report must include all information necessary to evaluate compliance 

with 39 U.S.C. § 2804. Inclusion of this information in the FY 2022 Report may be 

satisfied by either: (1) including the information itself in the text of the FY 2022 

Report; or (2) including cross-references identifying the documents containing this 

information in the text of the FY 2022 Report.

• The Commission finds that the FY 2021 Report complies with 39 U.S.C. § 2804(d)(3) for 

each public performance indicator because it explains why performance goals were 

not met and describes plans and schedules for meeting the goals in FY 2022. To comply 

with 39 U.S.C. § 2804(d)(3) next year, for each FY 2022 target that is not met, the 

FY 2022 Report must both explain why and describe plans and schedules for meeting 

FY 2023 targets.

• The Commission finds that the FY 2021 Report complies with 39 U.S.C. §§ 2804(d)(1), 

(2), and (4).

• The Commission finds that Library Reference USPS-FY21-NP30 complies with the 

Commission’s directive to file under seal with the FY 2021 ACR: (1) FY 2021 and 

FY 2022 targets; (2) comparable FY 2021 targets and results; and (3) comparable 

results from FY 2018 through FY 2021 for each non-public performance indicator. The 

FY 2022 Plan complies with 39 U.S.C. § 2803 by setting measurable FY 2022 target(s)

for each non-public performance indicator the Postal Service will use in FY 2022. See 

Section B.1., supra. The FY 2021 Report complies with 39 U.S.C. § 2804(b)(1) and 

2804(c) because it provides comparable FY 2021 targets and results as well as 

comparable results from the past 3 fiscal years. See Sections B.2.a., b., supra. The 

FY 2021 Report also complies with 39 U.S.C. § 2804(d)(3) because the Postal Service 

explains why it did not meet FY 2021 targets.

• To ensure that the FY 2023 Plan and FY 2022 Report comply with 39 U.S.C. §§ 2803 

and 2804, respectively, the Commission recommends that the FY 2022 Report explain 

where the non-public service performance information can be found, such as in a 

footnote in the master table of targets and results. For the new Competitive products’ 

non-public performance indicator(s), the Postal Service must file under seal with the 

FY 2022 ACR: (1) FY 2022 and FY 2023 targets; (2) comparable FY 2022 targets and 

results; and (3) comparable results from FY 2019 through FY 2022. If the Postal 

Service does not meet the FY 2022 target(s), the Postal Service must explain why and 

describe the plans and schedules for meeting the FY 2023 target(s). The FY 2022 ACR 

should continue to identify the library reference that contains this information.

• To ensure meaningful comparisons across fiscal years, the Commission recommends 

that the Postal Service continue to limit the number of changes to performance 
Analysis of FY 2021 Performance Report Appendix A

and FY 2022 Performance Plan Page 3 of 7

indicators and methodologies for calculating targets and results. If the Postal Service 

plans to add or change any performance indicators or methodologies, the Commission

recommends that the Annual Report to Congress describe these changes, provide the 

rationale for making them, and analyze the impact of these changes on results. To help 

ensure compliance with 39 U.S.C. § 2804(c), the Commission recommends that the 

Postal Service employ a performance indicator or methodology change for at least 3

consecutive fiscal years before revising it unless the change is clearly not beneficial or 

effective.

Chapter III – Evaluation of Performance Goals:

High-Quality Service:

• The Commission commends the Postal Service for the additional resources devoted—

such as extra transportation and overtime—and heightened measures undertaken to 

deliver Election Mail and Political Mail during the CY 2020 election cycle.1 These 

efforts were undertaken notwithstanding the adverse effects of the COVID-19 

pandemic, in furtherance of the vital role the Postal Service plays in the American 

democratic process.

• The Commission finds that the High-Quality Service performance goal was partially

met in FY 2021, with the Postal Service meeting only a single performance indicator.

• The Commission continues to recommend that the Postal Service consider developing 

more granular composites based on significant class, shape, and product-level 

differences between mailpieces in terms of service standards and how they are 

processed and delivered. If the Postal Service intends to continue using highlyaggregated composites as performance indicators, then the Commission recommends 

that the Postal Service also develop more granular performance indicators, such as it 

currently uses for First-Class Mail, to supplement the highly-aggregated composites. 

Finally, the Commission also continues to recommend that the Postal Service include

with each Annual Report supporting workpapers containing the inputs for, and the 

calculation of, the High-Quality Service performance indicator results, to the extent 

that they are not included elsewhere in the ACR filing.

• In the FY 2022 Annual Report, the Postal Service should address whether service 

standard changes implemented in FY 2022 impacted the comparability of 

performance indicator results. If comparability has been affected, the Postal Service 

should propose a way for the Commission to compare FY 2022 High-Quality Service 

performance indicator results to results from prior fiscal years. If the Postal Service 

asserts that comparability is unaffected, the Postal Service should fully explain the 

rationale and supporting basis for this assertion.

1 See FY 2020 ACD at 134-39; FY 2021 ACD at 119-20; see also United States Postal Service, Office of Inspector General, Report No. 20-318-R21,

Service Performance of Election and Political Mail During the November 2020 General Election, March 25, 2021, available at 

https://www.uspsoig.gov/sites/default/files/document-library-files/2021/20-318-R21.pdf.
Analysis of FY 2021 Performance Report Appendix A

and FY 2022 Performance Plan Page 4 of 7

• The Commission considers that during the FY 2021 peak season, which spanned 

November 2020 through January 2021, the Postal Service experienced a number of 

challenges above and beyond the typical holiday peak season due to the extreme strain 

that the COVID-19 pandemic placed on the entire shipping industry. The Commission 

expects that the Postal Service’s addition of space and processing machines, which 

occurred in FY 2021 Quarters 3 and 4, will put the Postal Service in a better position to 

respond to peak volumes. In addition to continuing efforts to align labor more 

efficiently with expected volume in Quarter 1, the Commission recommends that the 

Postal Service’s peak planning operations consider whether additional flexibility is 

needed to align labor with expected volume beyond Quarter 1 in order to meet the 

applicable service standards.

• The Commission finds that the measures the Postal Service has undertaken to improve 

employee availability appear reasonable. Given that further COVID-19 surges remain 

unpredictable, the Commission recommends that the Postal Service leverage data from 

the past 2 years to identify any patterns that might enable the Postal Service to better 

anticipate when and where future employee availability problems are likely to have 

the largest impact on service performance.

• The Commission recommends that the Postal Service consider implementing some of 

the best practices identified by the OIG to better recruit and retain truck drivers and 

increase the efficiency of truck usage.

• The Commission recommends that the Postal Service focus its efforts on reducing CLTs 

in the Districts with the highest concentrations of them.

• The Commission again recommends that the Postal Service restart the Disruptive 

Events initiative and report on its progress in the FY 2022 Report. If it does not restart 

the initiative, then the Postal Service should explain why it has not done so in the 

FY 2022 Report.

• The Commission recommends that the Postal Service develop methods to 

quantitatively measure the effectiveness of its service improvement initiatives so as not 

to spend resources needlessly or ineffectively.

• The Commission concurs with these OIG recommendations. Although the Postal Service 

lacks direct control over individual states’ election procedures, implementing the 

foregoing strategies to the extent possible should make the vote-by-mail process run 

more smoothly and help ensure that ballots are delivered within the deadlines 

established by states.

• The Commission continues to recommend that the Postal Service explore ways to 

better balance service performance scores across the nation. It is likely that significant 

gains in national scores could be made by focusing efforts on low-performing Areas 

and/or Districts. Thus, the Commission recommends the Postal Service study the 

reasons for service performance issues in the lowest performing Areas/Districts. For 

example, the Postal Service should require Area/Districts with low service 
Analysis of FY 2021 Performance Report Appendix A

and FY 2022 Performance Plan Page 5 of 7

performance scores to identify root cause(s) of low scores specific to that District and 

create action plans for improving service performance that specifically address the 

root cause(s) identified. The Postal Service should also require Areas/Districts with 

low service performance scores demonstrate the efficacy of action plans for improving 

service performance using quantitative metrics of operational improvement.

Excellent Customer Experience:

• The Commission finds that the Postal Service partially met the Excellent Customer 

Experience performance goal in FY 2021 because it missed six targets and met or 

exceeded two targets.

• The Commission recommends that the Postal Service provide Delivery survey 

customers the option of completing the survey by mail.

• The Commission recommends that the Postal Service strive to improve Delivery and 

C360 performance indicator results in FY 2022 by targeting key drivers of overall 

satisfaction.

• The Commission finds the FY 2022 targets for the Excellent Customer Experience 

performance indicators are reasonable. To improve transparency, the FY 2023 Plan 

should discuss the rationale for setting the FY 2023 targets.

• The Commission recommends that the Postal Service continue to use the NPS score to 

measure and assess CX in FY 2022. The Commission also recommends the Postal 

Service focus its efforts on improving the C360 NPS score to have a higher percentage 

of Promoters than Detractors.

• The Commission recommends that the Postal Service measure and assess CX using the 

CES and consider adding the CES question to the POS, USPS.com, and other CX surveys.

• The Commission finds that the Postal Service is effectively using social listening to 

provide important information to the public and improve services using feedback from 

social media. The Commission recommends that the Postal Service continue to use 

social listening to monitor social media platforms in FY 2022 and future years.

• The Commission commends the Postal Service for its efforts to keep up with private 

sector and other federal agencies by engaging with customers on social media and 

using social media to evaluate CX and obtain other insights. The Postal Service’s efforts 

to respond to customer inquiries on social media in FY 2021 are commendable given 

the small number of staff available to address customer questions and issues. To 

alleviate the high workload, the Commission recommends that the Postal Service 

consider hiring more employees for the SBI and SCR teams, as well as use automated 

technologies to address the most common issues.
Analysis of FY 2021 Performance Report Appendix A

and FY 2022 Performance Plan Page 6 of 7

Safe Workplace and Engaged Workforce:

• The Commission finds that the Postal Service partially met the Safe Workplace and 

Engaged Workforce performance goal in FY 2021.

• The Commission commends the Postal Service for meeting the Total Accident Rate 

target for the third year in a row. The Safety Intervention and Recognition program 

appears to have been effective in promoting a safe workplace in FY 2021. The FY 2022 

Total Accident Rate target appears achievable because it is close to the FY 2021 result. 

The Postal Service’s plans for using the SHMT and Occupational Safety and Health 

Scorecard in FY 2022 are reasonable steps toward improving the Total Accident Rate 

result and employee safety. The Commission recommends that the FY 2022 Report 

explain how the Postal Service used the SHMT to improve workplace safety and 

address root causes leading to accidents and injuries.

• The Commission finds that the Informed Mobile Safety Observation Tool appeared 

effective in promoting motor vehicle accident safety in FY 2021 and recommends that 

the Postal Service continue to use this tool in FY 2022. The Commission commends the 

Postal Service for modernizing its vehicle fleet with NGDVs to help improve carrier 

safety and ergonomics. The Commission recommends that the FY 2022 Report discuss 

how the Informed Mobility Safety Observation Tool and other systems and platforms 

affected the number of motor vehicle accidents in FY 2022.

• The FY 2021 Report improved compared to past years because it explains how the 

Postal Pulse survey was administered and how the Survey Response Rate was 

calculated. The Commission recommends that the Postal Service continue to include 

this information in future annual performance reports. If the Survey Response Rate 

continues to decline in FY 2022, the Commission recommends that the Postal Service 

investigate and address the root causes. The Postal Service should take steps to 

improve the response rate by, for example, designating a specific time to take the 

survey and prioritizing changes based on feedback received from the Postal Pulse 

survey.

• The Commission commends the Postal Service for improving the Grand Mean 

Engagement Score in FY 2021 despite the COVID-19 pandemic, organizational 

restructuring, and other factors impacting employee engagement. The FY 2022 target 

is reasonable considering the range of Grand Mean Engagement Scores during the 

past few years. The Commission recommends that the Postal Service continue taking 

steps to improve mean scores for all survey items, especially for Items 4, 7, 11, and 13.

The Commission also recommends that the Postal Service continue the Next Level 

Connection conversations and discuss the impact of these conversations on the 

FY 2022 Grand Mean Engagement Score.
Analysis of FY 2021 Performance Report Appendix A

and FY 2022 Performance Plan Page 7 of 7

Financial Health:

• The Commission finds that the Postal Service met the Financial Health performance 

goal in FY 2021.

• The Commission recommends that the Postal Service continue to include similar 

information on Controllable Income (Loss) in future annual performance plans and 

annual performance reports.

• The enactment of the PSRA, in conjunction with the retirement-based rate authority 

adopted by the Commission in Order No. 5763, have resulted in a substantial reduction 

in the Postal Service’s non-controllable expenses since the beginning of FY 2021. The 

PSRA eliminated payments for both RHB amortization and RHB normal costs, while 

Order No. 5763 authorized the Postal Service to collect revenue for FERS and CSRS 

amortization payments. The Commission recommends that the Postal Service revise 

the existing Controllable Income (Loss) performance indicator in future reports to 

exclude revenues accumulated from the retirement-based rate authority. This change 

would ensure that revenues collected using the retirement-based rate authority are 

excluded from the Controllable Income (Loss) metric.

• The Commission recommends that future annual performance reports continue to 

include information on both the TFP index and other productivity measures.

• The Commission continues to recommend that the Postal Service adopt additional 

performance indicators for measuring progress towards the Financial Health 

performance goal. Specifically, the Commission advises that the Postal Service consider 

using either TFP or labor productivity as performance indicators.

Chapter IV - Strategic Initiatives:

In the FY 2022 Annual Report, the Commission recommends that the Postal Service:

• Identify and describe each strategic initiative the Postal Service used in FY 2022

• Explain how the strategic initiatives relate to the performance goals and performance 

indicators

• Describe the Postal Service’s progress toward completing each strategic initiative 

during FY 2022, and identify performance measures and results, if applicable

• Describe each strategic initiative the Postal Service will use in FY 2023, and provide 

performance measures and targets

• Explain in detail how the strategic initiatives changed between FY 2022 and FY 2023
Analysis of FY 2021 Performance Report Appendix B

and FY 2022 Performance Plan Page 1 of 2

Appendix B - Figure 1

FY 2023 Plan Checklist for Compliance

with Major Requirements of 39 U.S.C. § 2803(a)

Note: The statutory requirements apply to both public and non-public performance indicators. The FY 2023 Plan and FY 2022 Report must 

include all information necessary to evaluate compliance with 39 U.S.C. §§ 2803 and 2804, which may be satisfied by either: (1) including the 

information itself in the text of the FY 2023 Plan or FY 2022 Report; or (2) including cross-references identifying the documents containing this 

information in the text of the FY 2023 Plan or FY 2022 Report. Further information appears in Chapter II, Sections 2.B.1 and B.3., supra.
Analysis of FY 2021 Performance Report Appendix B

and FY 2022 Performance Plan Page 2 of 2

Appendix B - Figure 2

FY 2022 Report Checklist for Compliance

with Major Requirements of 39 U.S.C. § 2804

Note: The statutory requirements apply to both public and non-public performance indicators. The FY 2023 Plan and FY 2022 Report must 

include all information necessary to evaluate compliance with 39 U.S.C. §§ 2803 and 2804, which may be satisfied by either: (1) including the 

information itself in the text of the FY 2023 Plan or FY 2022 Report; or (2) including cross-references identifying the documents containing this 

information in the text of the FY 2023 Plan or FY 2022 Report. Further information appears in Chapter II, Sections B.2. and B.3., supra.