United States Postal Service — FY2016 Annual Report to Congress

The Year in Review .....................................2

Ready Now Ò Future Ready .....................2

Letter from the Board of Governors’ 

Chairman and the Postmaster General .......4

The Board of Governors .............................6

The Executive Leadership Team .................8

Other Officers of the U.S. Postal Service ....9 

PART 1 — FY2016 Annual Performance 

Report and FY2017 Annual Performance 

Plan..........................................................11

U.S. Postal Service FY2016 Results 

and FY2017 Targets for 

Corporate-wide Goals ..............................15

Deliver High-Quality Service......................16

Provide Excellent Customer Experiences ..17

Ensure a Safe Workplace and Engaged 

Workforce ................................................20

Sustain Controllable Income .....................22

Key Financial and Operating Statistics ......25

PART 2 — FY2016 Comprehensive 

Statement on Postal Operations ..............31

Improving Customer Experience ..............32

Engaging and Empowering Employees to 

Better Serve Customers ...........................41

Investing in Future Platforms ....................48

Working Together with 

America’s Businesses...............................55

Accelerating the Pace of Innovation..........56

Connecting Communities .........................64

Maintaining Focus and Accelerating 

Growth .....................................................69

Table of Contents
2 United States Postal Service — FY2016 Annual Report to Congress 

The Year in Review

Ready Now Ò 

Future Ready

Financial Highlights

Years ended Sept 30

Percent change from 

preceding year

FY2016 FY2015 FY2014 FY2015-16 FY2014-15

(in millions)

Total revenue $ 71,498 $ 68,928 $ 67,830 3.7% 1.6%

Total operating expenses $ 76,899 $ 73,826 $ 73,178 4.2% 0.9%

Interest, net $ (190) $ (162) $ (160)

Net loss $ (5,591) $ (5,060) $ (5,508)

Purchases of capital property and equipment $ 1,428 $ 1,222 $ 781 16.9% 56.5%

Debt $ 15,000 $ 15,000 $ 15,000

Capital contributions of U.S. Government $ 3,132 $ 3,132 $ 3,132

Deficit since 1971 reorganization $ (59,114) $ (53,523) $ (48,463)

Total net deficiency $ (55,982) $ (50,391) $ (45,331)

(in actual units indicated, unaudited)

Number of career employees 508,908 491,863 488,300 3.5% 0.7%

Number of non-career employees 130,881 129,974 129,577 0.7% 0.3%

Mail volume (pieces in millions) 154,323 154,322 155,532 0.0% (0.8)%

New delivery points served 1,142,352 1,059,852 971,543 7.8% 9.1%

Note: Numbers for certain mail categories for the years FY2016, FY2015 and FY2014 have been reclassified subsequent to the Postal 

Service’s filing its Form 10-K with the PRC on November 15, 2016; therefore slight differences from the 10-K exist, which the Postal 

Service considers immaterial for financial reporting purposes. The reclassifications did not impact Total Operating Revenue amount.

The United States Postal Service has been 

connecting people and communities, binding the 

nation together, for more than 240 years. Our 

mission — established by law and solidified in our 

commitment to our customers — is to provide 

reliable, efficient, trusted and affordable service to 

connect America and help businesses grow.

As the nation has evolved, so have we. We’ve 

always been a leader in adopting the newest 

technologies, from automation to barcodes 

to augmented reality. We view advances in 

technology not as disruptive — but as an 

advantage. If they help us deliver better service 

to our customers, we’re there.

And we’re making sure we’ll always be there 

for you.

It’s about you.

Our customers are at the center of everything we 

do. Whether you do business with us at your local

Post Office or by using mobile technologies, our 

goal is to deliver a positive experience. We want 

to provide you with the best shipping and mailing 

solutions. We’re playing a larger role in enabling 

the growth in e-commerce, especially as more 

and more consumers and businesses rely on us 

for package delivery.

And more.

Want to track your package from drop-off to 

delivery? You got it. What can we help you find? 

We’re launching new information sources that 

are easy to navigate and can help you save 

time. Don’t want to wait in line? Try one of our 

kiosks. How about getting advance notice on 
United States Postal Service — FY2016 Annual Report to Congress 3

that mobile device of the mail you’ll receive that 

day? We know how many times you check 

your smartphone every day. About 150. Maybe 

more. We’re making mail part of your daily, digital 

routines.

It’s about our employees.

Our employees are our most valuable assets. 

We’re in your communities every day — where 

we live and work too. When we take care of 

our employees, our employees take care of our 

customers.

We’re equipping our workforce with the tools, 

training and resources they need to serve you 

even better. We’re surrounded by data and 

information about our operations. We’re sharing 

this knowledge with our employees so they 

better understand how their efforts help keep our 

customers doing business with us.

We’ve had a longtime commitment to being an 

“employer of choice”. We understand that an 

engaged workforce is critical to our success, 

especially in a rapidly changing marketplace.

It’s about innovating to deliver value.

We are speeding the pace of innovation. We 

are developing mobile and digital tools to 

play a larger role in the daily digital lives of our 

customers. We’re identifying opportunities for 

innovation that will deliver value to the market, 

create new revenue growth opportunities, drive 

cost savings, retain customers and optimize 

operational and financial performance.

Who benefits from this effort? You do. You’ll have 

more control over the mail you receive. It will be 

simpler to send. We’ll merge physical mail with 

digital features. Everything we do will reinforce 

the resiliency of mail as a trusted, effective 

communications channel.

Our focus is on what our customers value.

It’s about investing in the future.

We continue to make critical investments in our 

infrastructure and our network. We’re adding 

new equipment to handle impressive increases 

in package volume. We’re upgrading our mail 

processing machines. We’ll continue to enhance 

the retail experience by adding more self-service 

kiosks and deploying more mobile devices to 

handle transactions in new ways. We’ll integrate 

digital capabilities into mail and package delivery, 

such as applications that monitor status and 

performance.

By investing in new capabilities, we can meet 

the rapidly changing needs of our customers —

households and businesses — for e-commerce 

and digital solutions. We plan to remain an 

essential part of keeping America connected for 

decades to come.

We are Ready Now Ò Future Ready.
4 United States Postal Service — FY2016 Annual Report to Congress 

On a typical day, more than 600,000 men and 

women of the United States Postal Service 

ensure that hundreds of millions of pieces of 

mail are delivered to 156 million delivery points, 

including more than 43 million rural businesses 

and residences across the country. This daily 

act of delivery is a cornerstone of the American 

economy, and it will be far into the future. 

The secure, reliable and affordable delivery 

provided by the Postal Service enables 

every marketer to reach customers, and 

every business to conduct transactions and 

ship physical goods, from our smallest rural 

communities to our largest urban areas. From 

delivering holiday cheer through letters and 

packages to veterans stationed overseas to 

birthday greetings and college acceptance 

letters, the Postal Service binds the nation 

together and powers its commerce. 

The Postal Service had a remarkable 2016. We 

delivered over 154 billion pieces of mail, and we 

grew revenue to $71.5 billion in FY2016—a 3.7 

percent revenue increase. These results helped 

us achieve controllable income of $610 million. 

Excluding the impact of a $5.8 billion mandated 

Retiree Health Benefits prepayment, the Postal 

Service would have recorded net income 

for the year. And operationally, we improved 

performance in all major service categories 

and delivered record achievement in many 

categories. 

Despite these exceptional achievements, 

the Postal Service faces significant financial 

headwinds that threaten our ability to serve 

the American public if they are not addressed. 

We self-finance our operations through the 

sale of postal products and services instead of 

relying on taxpayer funds, so we compete for 

customers in a competitive communications and 

delivery marketplace. We are also obligated to 

provide universal service—and to maintain the 

significant processing, transportation and delivery 

infrastructure that providing universal service 

requires. Paying for that infrastructure, which 

continues to rise in cost every year as delivery 

points continue to grow, is becoming increasingly 

challenging as our most profitable mail product 

(First-Class Mail) continues to decline, and as 

other mandated costs also continue to rise. These 

problems are exacerbated by statutory pricing 

constraints and product and service constraints 

which limit our ability to generate enough revenue 

to pay our bills. 

Among the mandated costs, the Postal 

Service operates with a requirement to prefund 

retiree health benefits, but that requirement 

is unaffordable unless those benefits are fully 

integrated with Medicare. Additionally, our 

pension obligations are calculated based 

on federal government demographics and 

economic assumptions, which makes them 

more expensive than they would be if they 

were appropriately calculated based on postal 

demographics and wage-growth assumptions. 

The Postal Service is also subject to a rigid price 

cap not faced by private companies. That cap 

is limited solely to the changes in consumer 

inflation, which does not reflect the financial 

realities of our business. This price cap severely 

limits our ability to raise necessary revenue to 

cover the rising costs of universal service, which 

continue to be incurred even as First-Class Mail 

volume declines.

Letter from the Board of 

Governors’ Chairman and 

the Postmaster General
United States Postal Service — FY2016 Annual Report to Congress 5

The Postal Service has responded aggressively 

to these constraints and long-term trends, 

reducing our annual cost base by $14 billion 

since 2008. In that time period, we consolidated 

our processing, delivery and retail operations; 

reduced the size of our workforce; and, 

dramatically improved productivity. Nevertheless, 

the Postal Service cannot overcome its longterm financial challenges without legislative 

reform and pricing-system changes. 

America needs a financially strong Postal Service 

to rapidly bring the best technologies and 

solutions to the marketplace, and to find new 

and better ways of serving our customers and 

communities. This is an important goal that we 

continually pursue by working with Congress. 

Importantly, it is a very achievable goal with the 

enactment of the prudent, measured reform 

legislation that has broad stakeholder support 

and that is already pending before Congress.

While we continue to seek postal reform 

legislation and an appropriate pricing system, 

we are fully committed to our responsibility 

to operate efficiently, manage costs, and 

generate profitable revenues. In every American 

community, we deliver reliable, predictable, 

secure, and affordable service, and we compete 

for customers every day by delivering positive 

experiences at every touch point. 

Thank you for taking the time to review our 

“FY2016 Annual Report to Congress.” We’re 

proud to serve you and all of the American public.

Megan J. Brennan

Postmaster General 

and Chief Executive Officer

James H. Bilbray

Chairman, 

 Postal Service Board of Governors
6 United States Postal Service — FY2016 Annual Report to Congress 

As the governing body of the United States Postal Service, the Board of Governors has responsibilities 

comparable to the board of directors of a publicly held corporation. The Board normally consists of up 

to nine Governors appointed by the President of the United States with the advice and consent of the 

Senate, with no more than five Governors as members of the same political party.

The other two members of the Board are the Postmaster General and the Deputy Postmaster General. 

The Governors appoint the Postmaster General, who serves at their pleasure without a specific term of 

office. The Governors, together with the Postmaster General, appoint the Deputy Postmaster General. 

As of November 2014, the Governors issued a resolution regarding the exercise of those powers 

conferred by law solely to the Governors as distinguished from the full Board, which include 

the appointment and removal of the Postmaster General and the establishment of prices and 

classifications for our services. The Governors determined that their ability to exercise those powers 

reserved to the Governors’ was not impacted by the loss of a Board quorum. In FY2016, the Board 

has been operating under authority delegated to the Temporary Emergency Committee (TEC), which 

includes one Governor, the Postmaster General, and the Deputy Postmaster General.

The TEC will continue in existence until the Board is again able to assemble a quorum.

The Board of Governors

James H. Bilbray

Chairman of the Board of Governors. Member of the 

Compensation and Management Resources Committee and 

the Audit & Finance Committee. Attorney at a law firm in Las 

Vegas, NV. Former member, U.S. House of Representatives 

from Nevada. Former member, Nevada State Senate. 

Former Deputy District Attorney in Clark County, NV. 

Member of 2005 Defense Base Closure and Realignment 

Commission. At the end of our fiscal year, September 30, 

2016, Gov. Bilbray was serving a hold over year that expired 

Dec. 8, 2016. While by law the Board should include nine 

Governors, due to the lack of Senate confirmation we no 

longer have any appointed Governors on the Board.
United States Postal Service — FY2016 Annual Report to Congress 7

Megan J. Brennan

74th Postmaster General of the United States and the Chief Executive Officer, and a member of 

the Board of Governors since Feb. 1, 2015. Chief Operating Officer and Executive Vice President 

of the Postal Service from December 2010 through January 2015. Vice President of the Eastern 

Area Operations from April 2005 through December 2006, and Vice President of the Northeast Area 

Operations from December 2006 through December 2010. Started her career as a letter carrier in 

1986, and is the first female Postmaster General for the Postal Service.

Ronald A. Stroman

20th Deputy Postmaster General and member of the Board of Governors since Apr. 2, 2011. Served 

as Minority Staff Director, Committee on Oversight and Government Reform at the U.S. House 

of Representatives from 2009 to April 2011. Prior to this, served as Managing Director, Office of 

Opportunity and Inclusiveness, U.S. Government Accountability Office, from 2001 to 2009.
8 United States Postal Service — FY2016 Annual Report to Congress 

The Executive Leadership Team (ELT) of the United States Postal Service is a decision-making body 

whose members serve as senior advisors to the Postmaster General. The ELT considers and sets the 

strategic agenda.

The Executive 

Leadership Team

Megan J. Brennan

Postmaster General 

and Chief Executive 

Officer

Ronald A. Stroman

Deputy Postmaster 

General and Chief 

Government Relations 

Officer

David E. Williams, Jr.

Chief Operating Officer 

and Executive Vice 

President

Kristin A. Seaver

Chief Information 

Officer and Executive 

Vice President

Joseph Corbett 

Chief Financial Officer 

and Executive Vice 

President

James P. Cochrane

Chief Marketing 

and Sales Officer 

and Executive Vice 

President

Thomas J. Marshall

General Counsel 

and Executive Vice 

President

Jeffrey C. 

Williamson

Chief Human 

Resources Officer 

and Executive Vice 

President
United States Postal Service — FY2016 Annual Report to Congress 9

Michael J. Amato

Vice President, Engineering Systems

Susan M. Brownell

Vice President, Supply Management

Robert Cintron

Vice President, Network Operations

Joshua D. Colin

Vice President, Area Operations (Eastern)

Guy J. Cottrell

Chief Postal Inspector

Gregory S. Crabb

A/Chief Information Security Officer 

and Vice President, Digital Solutions

Isaac S. Cronkhite

Vice President, Enterprise Analytics

Dean J. Granholm

Vice President, Area Operations (Pacific)

Gregory G. Graves

Vice President, Area Operations (Western)

Luke T. Grossmann

Vice President, Finance and Planning

Jeffrey C. Johnson

Vice President, Information Technology

Linda M. Malone

Vice President, Area Operations (Capital Metro)

Kevin L. McAdams

Vice President, Delivery Operations

Maura A. McNerney

Vice President, Controller

Pritha N. Mehra

Vice President, Mail Entry and Payment 

Technology

Julie S. Moore

Secretary of the Board of Governors

Shaun E. Mossman

Vice President, Area Operations (Southern)

James A. Nemec

Vice President, Consumer and Industry Affairs

Sharon D. Owens

Vice President, Pricing and Costing

Edward F. Phelan, Jr.

Vice President, Area Operations (Northeast)

Gary C. Reblin

Vice President, New Products and Innovation

Nancy L. Rettinhouse

Vice President, Employee Resource Management

Donald W. Ross

A/Vice President and Managing Director, Global 

Business

Cliff Rucker

Vice President, Sales

Tom A. Samra

Vice President, Facilities

Gary Shapiro

Judicial Officer

Kelly M. Sigmon

Vice President, Retail and Customer Service 

Operations

Jacqueline K. Strako

Vice President, Area Operations (Great Lakes)

Douglas A. Tulino

Vice President, Labor Relations

Janice D. Walker

Vice President, Corporate Communications

Other Officers of the 

U.S. Postal Service*

*

As of September 30, 2016.
10 United States Postal Service — FY2016 Annual Report to Congress 
United States Postal Service — FY2016 Annual Report to Congress 11

PART 1

FY2016 Annual Performance Report 

and FY2017 Annual Performance Plan

U.S. Postal Service FY2016 Results and 

FY2017 Targets for Corporate-wide Goals

Deliver High-Quality Service

Provide Excellent Customer Experiences

Ensure a Safe Workplace and 

Engaged Workforce

Sustain Controllable Income

Key Financial and Operating Statistics
12 United States Postal Service — FY2016 Annual Report to Congress 

We make the connection.

Our Mission: Provide reliable, efficient, trusted 

and affordable universal delivery service that 

binds the nation together, as it has for more than 

240 years.

The United States Postal Service shall operate as 

a basic and fundamental service provided to the 

people by the Government of the United States, 

authorized by the Constitution, and created 

by an Act of Congress. The Postal Service 

shall have as its basic function the obligation 

to provide postal services to bind the nation 

together through the personal, educational, 

literary and business correspondence of the 

people. It shall provide prompt, reliable and 

efficient services to patrons in all areas and shall 

render postal services to all communities. The 

costs of establishing and maintaining the Postal 

Service shall not be apportioned to impair the 

overall value of such service to the people. The 

Postal Service shall provide a maximum degree 

of effective and regular postal services to rural 

areas, communities and small towns where Post 

Offices are not self-sustaining. — Title 39 U.S.C.

Our Vision: We envision a Postal Service that 

enables all citizens to connect, businesses to 

grow and communities to thrive in a digital world. 

Our vision includes serving those individuals 

who are currently digitally disconnected or 

underserved.

Report Purpose and Structure

The Postal Service is dedicated to transparency 

and effectively communicating to our numerous 

stakeholders. Key among these stakeholders 

are the commercial and residential customers 

whom we serve, legislators and regulators who 

provide oversight and ensure transparency and 

performance and employees who deliver worldclass service.

In addition to communicating performance 

to our stakeholders, this report satisfies the 

public reporting requirements contained in Title 

39 U.S.C. § 2401(e), § 2402, § 2803 and § 

2804, along with the Postal Accountability and 

Enhancement Act (PAEA) of 2006 Section 3652. 

These regulations require the Postal Service 

to provide an Annual Report to Congress, 

an Annual Performance Report, an Annual 

Performance Plan and a Comprehensive 

Statement of Postal Operations. This report 

covers Postal Service performance for the 2016 

fiscal year (Oct. 1, 2015, to Sept. 30, 2016) and 

reviews the Postal Service’s plans for the 2017 

fiscal year (Oct. 1, 2016, to Sept. 30, 2017).

The FY2016 Annual Performance Report and 

FY2017 Annual Performance Plan present an 

array of metrics the Postal Service uses to 

measure performance across the organization. 

These metrics provide visibility across the 

following critical functions: delivery service, 

financial performance, workplace environment 

and customer experience.

The FY2016 Comprehensive Statement 

on Postal Operations provides a more 

detailed description of the key organizational 

People 

Communities 

Commerce
United States Postal Service — FY2016 Annual Report to Congress 13

developments during the last fiscal year and 

the key initiatives underway that support the 

corporate goals for the next fiscal year.

Related Reporting Requirements

The Postal Service is among the most 

transparent organizations in the world. Legislation 

and regulation require the Postal Service to 

disclose operational and financial information 

beyond that demanded of federal government 

agencies and private sector companies.

The Postal Service is not a reporting company 

under the Securities Exchange Act of 1934 (the 

Exchange Act), as amended, and is not subject 

to regulation by the Securities and Exchange 

Commission (SEC). However, the Postal Service 

is required under PAEA to file with the Postal 

Regulatory Commission (PRC) certain financial 

reports containing information prescribed by the 

SEC under Section 13 of the Exchange Act. 

These reports include annual reports on Form 

10-K (which are audited by an Independent 

Registered Public Accounting Firm), quarterly 

reports on Form 10-Q and current reports on 

Form 8-K. These reports are available at about.

usps.com/who-we-are/financials/welcome.htm.

Title 39 of the United States Code and the 

PRC mandate further disclosures of the Postal 

Service, its operations and finances. These 

requirements include Cost and Revenue 

Analysis, Revenue, Pieces and Weight reports 

and financial and strategic plans. These 

disclosures are reviewed by the PRC but are 

outside the scope of our Independent Registered 

Public Accounting Firm. These can be found 

online at about.usps.com.

FY2016 Results and FY2017 Targets for 

Corporate-Wide Goals

The Postal Service has established an enduring 

set of performance outcome goals that enable 

management and stakeholders to measure the 

success of our corporate strategies, operations 

and continuous improvement efforts over time:

 Deliver High-Quality Service

 Provide Excellent Customer Experiences

 Ensure a Safe Workplace and Engaged 

Workforce 

 Sustain Controllable Income

These four corporate performance outcome 

goals and associated metrics are based on 

a balanced scorecard assessment of postal 

stakeholder needs and make up the framework 

of our National Performance Assessment (NPA) 

system. NPA enables our managers to monitor 

corporate-wide performance on a monthly basis 

related to each corporate performance target 

and to track associated performance indicators 

down to a scorecard for each Area of operation, 

District and business unit. The NPA performance 

scoring system is integrated into the annual 

Performance Evaluation System (PES) for all 

non-bargaining employees and serves as the 

basis for their annual Pay for Performance (PFP) 

program.

The NPA process also enables our managers 

to continuously monitor performance against 

these metrics to identify specific opportunities 

to improve operations and the workplace 

environment. The Postal Service annually 

evaluates the NPA metrics and measurement 

systems and assesses the need to make 

refinements necessary to adapt to changing 

customer expectations and business 

environment, or to adopt best practices.
14 United States Postal Service — FY2016 Annual Report to Congress 

FY2017 Performance Targets are aligned 

to the U.S. Postal Service Future Ready 

Five-Year Strategic Plan

Our mission to bind the nation together by 

providing affordable universal delivery services 

has been the foundation for Postal Service 

operations for more than 240 years. Our vision 

for the next five years (FY2017 to FY2021) is 

a Postal Service that helps people connect, 

businesses grow and communities to thrive 

in the digital economy. To realize this vision, 

the Postmaster General has established four 

strategic areas of focus, what we call our “Ready 

Now Ò Future Ready” strategies:

 Deliver a World-Class Customer Experience

 Equip, Empower and Engage Employees

 Innovate Faster to Deliver Value

 Invest in our Future Platforms

These four strategies will drive everything we do 

and are aimed at yielding the best outcomes 

for the foreseeable future. We believe that a 

focus on the customer experience — delivered 

by an equipped, empowered and engaged 

workforce — will enable us to innovate faster and 

invest strategically in our future to best provide 

customers and communities the value they 

desire and deserve. The Postal Service’s Future 

Ready Five-Year Strategic Plan is located on the 

web at http://about.usps.com/strategic-planning/

five-year-strategic-plan-2017-2021.pdf.

The following sections provide a detailed 

description of each of the four corporate 

performance categories. The performance report 

contains the following information for each NPA 

performance category:

 A description of the supporting metrics and 

measurement systems used to evaluate 

performance during FY2016;

 A discussion of the success in achieving the 

related performance targets for the fiscal year; 

and

 Where a performance target was not 

achieved, a discussion of the root causes. 

The performance plan contains the following 

information for each NPA performance category:

 A description of the metrics and target level of 

performance to be achieved during FY2017; 

 A description of the material changes 

to operational processes, technologies, 

information systems or human resources 

required to meet the fiscal year performance 

target; 

 A description of how the measures will be 

verified and validated; and 

 Where a performance measurement system 

has changed, a description of the changes 

and the reasons to why the changes were 

selected.

A summary of the U.S. Postal Service’s FY2016 

performance results and FY2017 performance 

targets for each NPA performance goal is listed 

in the following table.
United States Postal Service — FY2016 Annual Report to Congress 15

U.S. Postal Service FY2016 Results and FY2017 Targets for Corporate-wide Goals

Goal Measure FY2017 

Target

FY2016 

Actual

FY2016 

Target

FY2015 

Actual

FY2015 

Target

FY2014 

Actual

FY2014 

Target

FY2013 

Actual

FY2013 

Target

Deliver High-Quality 

Service (% on-time)

Single-Piece First-Class Mail

 Overnight1 N/A N/A N/A 95.55 96.80 96.00 96.80 96.14 96.70

 Two-day 96.50 94.66 96.50 93.28 96.50 94.90 96.50 95.26 95.10

 Three-to-Five-day 95.25 83.66 95.25 76.56 95.25 87.70 95.25 91.60 95.00

Presort First-Class Mail

 Overnight 96.80 96.16 96.80 95.74 96.80 97.00 96.80 97.20 96.70

 Two-day 96.50 95.05 96.50 93.56 96.50 96.40 96.50 97.00 95.10

 Three-to-Five-day 95.25 91.68 95.25 87.78 95.25 92.20 95.25 95.10 95.00

First-Class Composite2 N/A 93.00 96.00 89.64 96.00 94.11 96.00 N/A N/A

First-Class Mail Letter & Flat 

 (FCLF) Composite3

96.00 N/A N/A N/A N/A N/A N/A N/A N/A

Standard & Periodical Composite4 91.00 N/A N/A N/A N/A N/A N/A N/A N/A

Standard Composite5 N/A 92.97 91.00 89.58 91.00 90.09 91.00 N/A N/A

Provide Excellent 

Customer 

Experiences (%)6

CEM Composite (2011–2013) N/A N/A N/A N/A N/A CEM 

Sunset

CEM 

Sunset

78.40 82.50

Residential (2011–2013) N/A N/A N/A N/A N/A CEM 

Sunset

CEM 

Sunset

82.00 85.00

Small/Medium Business 

(2011–2013)

N/A N/A N/A N/A N/A CEM 

Sunset

CEM 

Sunset

76.40 81.00

Customer Insights Composite7 89.00 87.62 86.70 85.73 86.70 Baseline Baseline N/A N/A

 Business Service Network (BSN) N/A 95.13 N/A 94.32 N/A Baseline Baseline N/A N/A

 Point of Sale (POS) N/A 86.38 N/A 86.28 N/A Baseline Baseline N/A N/A

 Delivery N/A 76.26 N/A 77.49 N/A Baseline Baseline N/A N/A

 Customer Care Center N/A 85.18 N/A 76.00 N/A Baseline Baseline N/A N/A

Ensure a Safe 

Workplace and 

Engaged Workforce

OSHA Illness and Injury Rate8 N/A 6.25 6.05 6.85 5.10 6.75 5.10 6.05 5.20

Total Accidents Rate9 15.00 16.01 15.0 N/A N/A N/A N/A N/A N/A

Voice of the Employee Survey (%) N/A N/A N/A N/A 65.10 65.01 65.10 64.70 64.95

Sustain Controllable 

Income10

Deliveries per Hour (calculated rate)11 N/A N/A N/A 41.50 42.40 42.00 42.90 41.60 42.70

Deliveries per Total Work Hours 

 % SPLY12

0.6 0.1 1.2 N/A N/A N/A N/A N/A N/A

Controllable Income (Loss) 

 ($ in billions)

0.10 0.61 0.10 1.19 1.10 1.35 1.10 (1.00) (2.00)

1

In FY2016, the service performance target for Overnight Single-Piece First-Class Mail was removed due to the service standard changes of FY2015.

2

For FY2015, the service performance target was a combination of Single-Piece First-Class and Commercial First-Class performance for an aggregate of overnight, two-day 

and three-day service.

3

This is a new NPA measure for FY2017, focused on measuring First-Class letters and flats service performance.

4

This is a new NPA measure for FY2017, focused on measuring standard letters and standard/periodical flats.

5

For FY2015, there was a service performance target that is a combination of Standard Mail destination entry for Sectional Center Facility (SCF) letters and National Distribution Center (NDC) letters and flats.

6

In FY2013, the Customer Experience Measurement (CEM) was replaced with Customer Insights (CI) as the key measure of customer experience for our NPA system and 

PES. FY2014 served as the baseline measure for this metric and compensable targets were established for FY2015.

7

Customer Insights Composite is a corporate approved and compensated composite performance measure. Targets for the four subcomponent categories of Customer 

Insights (BSN, POS, Delivery, and Customer Care Centers) are set and compensated at the unit level. In FY2017, the Customer Insights Composite will also include an 

Electronic Customer Care (eCC) component.

8

Injury and illness rate is calculated using an industry-wide formula recommended by OSHA: Total number of OSHA injuries and illnesses (multiplied by 200,000 hours 

divided by the number of exposure hours worked by all employees). The 200,000 hours represent 100 employees working 2,000 hours per year. It provides the standard 

base for calculating incidence rates.

9

This is a new NPA measure for FY2017 and will replace the OSHA I&I rate as a measure of employee safety.

10FY2014 targets adjusted to reflect deferral of Network Rationalization, Phase 2.

11Starting in FY2017, this measure will be replaced by the new NPA measure of Deliveries per Total Work Hours % SPLY.

12Name changed from Total Deliveries per Hour % SPLY to Deliveries per Total Work Hours % SPLY in FY2017. Total Deliveries per Hour % SPLY was introduced in FY2016.

For more information regarding FY2017 performance measures, please refer to the Annual Performance Plan included in this report.
16 United States Postal Service — FY2016 Annual Report to Congress 

Deliver High-Quality Service 

The Postal Service measures service performance 

in terms of speed and reliability as part of our 

commitment to deliver high-quality service to 

our customers. We have contracted with an 

independent third-party company since 1990 to 

objectively measure performance for Single-Piece 

First-Class Mail via the External First-Class Mail 

(EXFC) system. This external sampling system 

measures the time it takes from when mail is 

deposited in a collection box or lobby chute 

to when it’s delivered at a home or business. 

Performance is measured in 892 ZIP Codes for 

Single-Piece First-Class Mail cards, letters and flat 

envelopes. Service performance for Single-Piece 

First-Class Mail parcels, which is measured using 

an internal Postal Service system, is combined 

with EXFC performance to generate overall SinglePiece First-Class Mail results.

Similarly, Presort First-Class Mail in FY2016 

was measured through a hybrid measurement 

approach that combined Full-Service Intelligent 

Mail data from commercial mailers and relied on 

data collection by an external entity. This process 

measured the time from mail acceptance to 

final processing, which involved the collection 

of data on transit time from final processing 

to mail processing equipment and through to 

delivery. The processing and delivery data were 

aggregated, combined and reviewed by the 

external entity to measure overall commercial 

mail performance.

Of particular focus are Two-Day and Threeto-Five-Day services, which are widely used 

mail categories. Individual consumers, small 

businesses and larger commercial firms all 

depend on First-Class Mail, which relies upon 

nearly all parts of the Postal Service’s operations 

and supply chain, from collection boxes and 

retail counters to final delivery. In FY2016, the 

Postal Service continued to measure service 

performance through a combination of both 

Single-Piece First-Class Mail and Commercial 

First-Class performance for an aggregate 

of Overnight, Two-Day and Three-to-FiveDay services. Single-Piece First-Class Mail 

International provides a measure of the domestic 

leg of travel for Single-Piece International mail.

FY2016 Performance Report – For FY2016, 

the Postal Service significantly rebounded from 

service challenges in FY2015 and improved 

service performance in all composite categories 

including all-time high performance in Priority 

Mail.  We continued to significantly exceed our 

Standard Mail performance targets across the 

nation, achieving record-breaking service for our 

business customers. First-Class Mail SinglePiece performance for the three-to-five day 

category continued to provide opportunities for 

improvement as we balanced the air and surface 

transportation network due to the growth in 

package mail. 

Scanning performance also continued to 

improve significantly as the Postal Service 

focused on scanning every trailer, container 

and tray to provide maximum visibility within 

our networks. New visualization dashboards 

developed in FY2016 offered robust 

performance and diagnostics tools that provided 

greater insight into mail as it moved through the 

mailstream and identified inefficiencies and points 

of failures within the mailstream to help improve 

performance and service offerings. The Postal 

Service continued to drive service performance 

by focusing on reducing cycle times, last 

mile and vital few opportunities and ensuring 

employee and industry engagement.

For more information regarding the service 

performance results and trends of the Postal 

Service’s market dominant products at the 

national and district levels, visit http://about.usps.

com/what-we-are-doing/service-performance/

welcome.htm.
United States Postal Service — FY2016 Annual Report to Congress 17

FY2017 Performance Plan – The Postal Service 

will continue to use the principles of continuous 

improvement and data analytics to drive 

service performance and to enhance customer 

experience. These efforts have helped drive 

substantial improvements in FY2016 and will 

be used to sustain these improvements while 

identifying additional opportunities. Network 

Operations Control Centers (NOCC) will be 

deployed in each Area to monitor and react to 

processing and transportation events in near 

real time. We will also continue to examine our 

network requirements, both in terms of facilities 

and transportation, to identify opportunities 

to improve service capabilities. Improved 

transportation modeling will provide insights 

into potential transportation capacity issues 

allowing for the execution of alternative plans to 

ensure service continuity. The Postal Service 

will continue to strategically invest in facilities, 

equipment and vehicles to foster and support 

new growth opportunities. (See table on page 15 

for FY2017 service performance targets.)

First-Class Mail Packages performance will 

be measured using a composite score of 

commercial and retail two-day and three-tofive day. First-Class Mail Letters & Flats (FCLF) 

performance will be measured using a composite 

score of overnight, two-day, and three-to-five 

day. The Standard and Periodicals Composite 

performance will be measured using a composite 

score of All Entry Type Standard Letters and All 

Entry Type Standard/Periodical Flats.

For more information regarding the 2017 

Operating Plan of the Postal Service, see the 

USPS Integrated Financial Plan for FY2017 

at: about.usps.com/who-we-are/financials/

welcome.htm.

Provide Excellent Customer Experiences

The Postal Service is dedicated to providing 

excellent customer experiences. The Customer 

Insights (CI) measurement system provides a 

comprehensive view of the customer experience 

across the most frequently used customer 

contact channels. Touch points of customer 

contact are:

 Business Service Network (BSN) – The BSN 

survey is event-based and measures the 

customer’s level of satisfaction with their BSN 

account representative.

 Point of Sale (POS) – The POS survey is 

event-based and measures the customer’s 

experience at retail locations.

 Delivery – The delivery (receiving) survey is a 

hybrid relational/event-based measurement 

of the level of satisfaction with how residential 

and small/medium business customers 

receive their mail.

 Customer Care Center (CCC) – This live 

agent survey is event-based and measures 

the customer’s satisfaction with dealing with a 

CCC agent.
18 United States Postal Service — FY2016 Annual Report to Congress 

Customer experience is measured across four 

touch points, then weighted and aggregated 

to create a national composite CI score. The 

modular components and flexible design of the 

national composite CI score allow expansion and 

inclusion of additional points of contact to meet 

the quickly changing customer landscape. To 

support the Postal Service’s mission of delivering 

excellent customer service, the CI composite 

score is a component of the NPA system which 

links the CI performance score and the employee 

PFP system. This emphasizes that each and 

every employee is responsible for ensuring our 

customers receive exceptional service.

FY2016 Performance Report – Customer 

Insights ended the fiscal year achieving a 

composite score of 87.62 percent compared to 

its target of 86.70 percent. Through increased 

employee focus and effort, the Postal Service 

was able to exceed its target by nearly 1 

percentage point while driving substantial 

improvements in the response rates of various CI 

components (See table below). For example, the 

response rate for the retail POS survey continues 

to exceed previous years. Training our retail 

employees to ask customers for their feedback 

by circling the URL address on their receipts has 

been a key to driving the response rate. We also 

rolled out training that focused on improving key 

elements of our retail customers’ visits. By using 

Quick Response (QR) codes and interactive 

voice response systems, and fostering an 

environment of effortless accessibility, we’ve 

been able to make notable strides in capturing 

additional customer insights. Expanding the ways 

customers could respond to both the POS and 

delivery surveys has increased opportunities for 

customers to share their experiences.

FY2017 Performance Plan – In the next fiscal 

year, the Postal Service will build on its crossfunctional collaboration with stakeholders from 

all customer contact channels to further improve 

customer focus and drive performance. The CI 

program will continue to be used to measure 

performance and drive improvements at our 

customer touch points. (See table on page 15 

for FY2017 CI target.)

Our CCCs are well-positioned to improve 

FY2017 performance by addressing the 

three key drivers of customer satisfaction — 

accessibility, knowledge and professionalism. 

The call centers will make even better use of our 

agent quality program, enhanced agent refresher 

training, technological advances in integrated 

voice recognition software and immediate agent 

coaching.

Goal Measure FY2016 

Actual (%)

FY2016 

Target (%)

FY2016 Total Surveys 

Initiated (actual 

numbers, unaudited)

FY2016 Total 

Surveys 

Returned 

(actual 

numbers, 

unaudited)

Provide Excellent 

Customer 

Experiences

Customer Insights Composite 87.62 86.70 N/A N/A

 Business Service Network (BSN) 95.13 N/A 28,306 5,138

 Point of Sale (POS) 86.38 N/A 11,053,060,580* 1,353,553

 Delivery (Combined) 76.26 N/A 5,746,862 71,159

 Delivery (Residential) 79.93 N/A 2,147,867 35,675

 Delivery (Small/Medium Businesses) 72.60 N/A 3,598,995 35,484

 Customer Care Center (CCC) 85.18 N/A 954,378 287,680

*Represents total POS financial transactions.

Note: Customer Insights is a corporate-approved and compensated composite performance measure. Targets for the four subcomponent categories of 

Customer Insights (BSN, POS, Delivery and Customer Care Centers) are set and compensated at unit level.
United States Postal Service — FY2016 Annual Report to Congress 19

The delivery survey is undergoing some changes 

that will affect the way it’s scored. The FY2016 

survey is scored by measuring only the “overall 

satisfaction” question, which doesn’t account for 

the other questions that are asked. In FY2017, 

the delivery survey is changing to a delivery index 

score that will be comprised of both a carrier 

survey and a PO Box survey. The carrier survey 

score will be the sum of four weighted questions 

for both residential and small/medium business 

(SMB) customers. In addition, two new questions 

are being introduced, which will provide more 

visibility into the customer’s experience with 

mail delivery so we can better address possible 

carrier-related issues and identify areas for 

improvement. (See the following chart on 

Delivery Composite methodology.)

We’ll continue to develop videos, publications, 

service talks and training for employees to 

provide education and highlight elements of our 

customers’ visits that matter most to them. We’ll 

continue to work to improve response rates to 

our surveys.

Index questions Weight

Overall Satisfaction with Letter Carrier 25%

Delivered to the correct address 25%

Delivered in good condition 25%

Carrier friendly and courteous 25%

Total 100%

Delivery Composite 

Weight:100%

Carrier Survey Index 

Weight: 95%

PO Box Survey 

Weight: 5%

Question 1

Overall 

Satisfaction

Weight: 100%

Index

Questions

Weight: 100%

Residential

Weight: 50%

SMB

Weight: 50%

Residential

Weight: 85%

SMB

Weight: 15%

Question 1

Overall 

Satisfaction

Weight: 100%

Index

Questions

Weight: 100%
20 United States Postal Service — FY2016 Annual Report to Congress 

Ensure a Safe Workplace and Engaged 

Workforce

Keeping employees safe is a priority of the 

Postal Service, and we track two metrics as an 

indication of our performance in ensuring a safe 

workplace and an engaged workforce. The first 

metric is the Occupational Safety and Health 

Administration (OSHA) Illness and Injury (I&I) rate 

and the second is the Postal Pulse survey.

OSHA Illness and Injury Rate

FY2016 Performance Report – OSHA 

requirements are designed to protect Postal 

Service and contract employees from safety 

and health hazards in the workplace. All private 

and public sector employers are subject to 

OSHA regulations; however, the Postal Service 

is the only independent federal establishment 

that can be assessed penalties and fines for 

noncompliance. The Postal Service measured 

OSHA safety performance on two levels.  The 

first was by establishing a target injury and 

illness frequency rate and the second was by 

establishing performance improvements over the 

prior year.  In FY2016, the OSHA I&I frequency 

rate for the Postal Service as reported to NPA 

was 6.25 — nearly an 9 percent decrease over 

the revised actual rate reported for FY2015. The 

FY2015 performance reported as of September 

30, 2015, was 6.55 which was later restated 

to 6.85 due to employee claims filed after the 

close of the fiscal year. Although we did not meet 

our NPA target in FY2016, the Postal Service 

continued to reduce accidents and improve 

performance. 

The decrease in the OSHA I&I rate, year over 

year, was due primarily to a comprehensive 

training and communication effort aimed at 

all employees with a focus on new, at-risk 

employees. In FY2016, our communication 

and training campaigns addressed the most 

frequent hazards of the workplace, such as dog 

bites, extreme heat, distracted driving, proper 

lifting and reaching and providing a focus on the 

importance of leadership in maintaining a culture 

of safety. In addition, we implemented a new 

program designed to focus on our most at risk 

employees. This program (CARE — Counseling 

at Risk Employees) created an open dialogue 

between employees and their supervisors 

designed to address safety concerns or unsafe 

behaviors. A safety statistical dashboard 

continued to provide targeted data to our field 

leadership that enabled them to quickly identify 

the top causes of accidents at a facility level. 

This data provided direction for creating a tailored 

safety program. 

FY2017 Performance Plan – The Postal 

Service will add additional focus on prevention 

strategies and a more proactive approach to 

employee safety. This focus will be on total 

accidents, regardless of severity or OSHA 

record-keeping requirements, and will place 

additional emphasis on employees considered 

to be at higher risk for accidents. Our safety 

initiatives for the next year will assist the field in 

establishing effective accident reduction plans, 

enlisting the cooperation and support of our 

employee partners and taking steps to address 

the increase in motor vehicle accidents through 

a redesigned driver training program. We’ll also 

continue programs to acknowledge leaders 

who demonstrate exceptional commitment to 

creating a safe work environment. The OSHA 

I&I rates measurement will be replaced by Total 

Accidents Rate in FY2017. This indicator is a 

rate established by taking the total count of all 

accidents per exposure hour and the year-todate total accidents compared to SPLY. (See 

table on page 15 for FY2017 targets.)

Postal Pulse Survey/Employee Engagement

FY2016 Performance Report – Continuing to 

improve employee engagement is a top priority for 

the organization. The Postal Service is committed 

to creating a dynamic, highly engaged workplace 

where employees perform at consistently high 

levels and work in environments that promote 
United States Postal Service — FY2016 Annual Report to Congress 21

development, recognition and learning. This helps 

increase productivity and customer satisfaction 

while simultaneously decreasing safety incidents, 

turnover and absenteeism.

Employee engagement is measured through 

the Postal Pulse survey, which was conducted 

during the second quarter of FY2016. The 

survey, distributed to all employees by mail or 

email, identified key business opportunities 

related to employee well-being, profitability, 

customer service, accident reduction and 

employee retention.

In FY2016, we accomplished the following:

 Maintained executive level oversight of the 

national employee engagement strategy.

 Built on baseline results from the inaugural 

Postal Pulse survey in FY2015. 

 Established a core team in each area and 

headquarters to administer training related to 

understanding, implementing and creating an 

engaged workforce. 

 Encouraged employee feedback through 

additional channels, including dedicated email 

address, 1-800 number and USPS intranet 

suggestion box. 

 Developed more than 18,000 “State of the 

Team” conversations and action plans to 

achieve engagement goals.

 Designed and delivered employee 

engagement information to all segments of 

the organization.

 Provided officers, executives, managers and 

supervisors training and access to a robust 

reporting platform for assessing and acting on 

survey results.

FY2016 results:

 Selected team members to support the 

efforts of the executive director of employee 

engagement who reports directly to the chief 

human resources officer. 

 Delivered the Postal Pulse survey to 600,000 

career and non-career employees. Thirtytwo percent of employees completed 

and returned the survey. The grand mean 

engagement score result increased from 3.16 

to 3.24 on a scale of 1 to 5.

 Identified, trained and certified 26 

ambassadors to deliver training to supervisors 

and managers in all areas and headquarters 

(on two-year assignments).

 Provided training to more than 6,000 

supervisors and managers, an increase from 

400 in 2015.

 Continued to leverage the talent of previously 

trained engagement leaders and champions.

FY2017 Performance Plan – The Employee 

Engagement team will continue to provide 

targeted training to executives, managers 

and supervisors so they can take concrete 

actions to create and sustain more engaged 

work environments. The team will partner with 

other functions — such as Safety, Health and 

Wellness, and Learning and Development — to 

create a sustainable approach to engagement in 

multiple aspects of the organization. 

Working with the Corporate Communications 

group, we will increase awareness about the 

importance of employee engagement across the 

organization and ensure our message is aligned 

to organizational strategy and overall Human 

Resources objectives. Employee Engagement 

will continue to research the most effective 

methods to administer the survey, including 

focus groups, post-event evaluations and 

multilevel delivery methods.

The Employee Engagement team will continue 

to share knowledge related to the successful 

implementation of engagement techniques and 

best practices. In conjunction with the Learning 

and Development function, team members 

will continue to provide expert facilitation within 

targeted leadership development programs. We’ll 
22 United States Postal Service — FY2016 Annual Report to Congress 

also provide updated materials and information 

to Learning and Development managers and 

ensure employee engagement is included in new 

and existing training programs.

One of the most significant contributions will 

continue to be the “State of the Team” process 

to create action plans and goals for improved 

employee engagement, and aligning the efforts 

of supervisors, managers and executives 

to meet these objectives. A metric used to 

determine the number of action plans created 

will also capture information about the plans in an 

electronic database. Improving interaction and 

engaging employees more effectively translates 

into better business results and increased levels 

of productivity.

Sustain Controllable Income

The Postal Service tracks three metrics for 

NPA purposes as an indication of our financial 

performance. The first is Deliveries per Hour 

(DPH), which summarizes the effectiveness of 

productivity improvement efforts. The indicator is 

relevant, especially as the organization manages 

a declining volume workload over time with a 

constantly increasing universal delivery network. 

The second is Deliveries per Total Work Hours 

as a percent of the same period last year (SPLY), 

and the third metric is Controllable Income.

Deliveries per Hour

FY2016 Performance Report – In FY2016, the 

target for DPH was an increase of 1.2 percent 

over the actual result. The actual result was an 

increase of 0.1 percent, a difference of 

1.1 percent. We did not achieve the stretch 

target due to a growth in work hours, but we 

did have an increase over SPLY. Factors driving 

work hour growth include a delay in plant 

consolidations, not capturing all of Network 

Rationalization phase 2 savings, utilization of 

additional work hours to improve service and 

additional hours from hiring, training and turnover 

rates for the non-career workforce. Our noncareer workforce provides much needed flexibility 

and reduces salary and benefit costs based on 

lower wage rates. However, the additional work 

hour usage has a negative impact on the DPH 

metric.

The Postal Service calculates the incremental 

workload impact that is due to the workload 

content of packages increasing, and letters and 

flats decreasing. Packages grew strongly in 

FY2016, and the workload content of packages 

is significantly higher than that of letters and 

flats which are decreasing. This net weighted 

volume impact is a sizable increase in work 

hours in FY2016. These additional hours are 

earned from volume and are now accounted for 

within the DPH equation by removing them from 

the denominator to compare years strictly on a 

productivity basis.

FY2017 Performance Plan – Achievement of 

the FY2017 DPH target is based on capturing 

work hour reductions from operational initiatives. 

The Postal Service does not intend to make any 

modifications in the methods used to forecast 

delivery points for the 2017 DPH target. (See 

table on page 15 for FY2017 target.)

Controllable Income

FY2016 Performance Report – FY2016 had total 

revenue of $71.5 billion and total expenses of 

$77.1 billion, resulting in a net loss of $5.6 billion.

Our financial results are impacted by items that 

are not under our control and are not reflective of 

our normal operations. These items include the 

annual legally mandated Postal Service Retiree 

Health Benefits Fund (PSRHBF) prefunding 

expense and the non-cash expenses related 

to changes in the liability for participation in the 

federal workers’ compensation program, which 

included fluctuations in workers’ compensation 

expenses caused by actuarial revaluation and 

discount rate changes, and the amortization of 

the unfunded liability for our portion of the Federal 

Employees Retirement System (FERS).
United States Postal Service — FY2016 Annual Report to Congress 23

The FERS amortization expense is calculated 

by the Office of Personnel Management based 

on government-wide demographics and pay 

assumptions and is not reflective of what we 

believe our FERS liability would be if it were 

calculated using Postal-specific demographics 

and pay assumptions. Because these items are 

not under management’s control, we believe that 

analyzing operating results without the impact 

of these charges provides a more meaningful 

insight into our financial results. In FY2016, we 

also excluded a $1.1 billion one-time, noncash adjustment resulting from a change in an 

accounting estimate in deferred revenue-prepaid 

postage, to arrive at controllable income.

We recognize revenue for postage at the time 

a piece of mail is processed and delivered, not 

when we receive cash for the sale of postage. 

We estimate the amount of postage that we 

have sold, but customers have not yet used, and 

include this amount as a liability in our balance 

sheets as deferred revenue-prepaid postage. The 

majority of this liability consists of our estimate 

of sold, but unused, Forever Stamps, the nondenominated postage stamps we introduced in 

2007. Since their introduction through September 

30, 2016, we sold approximately $48 billion in 

Forever Stamps to the public.

During 2016, we revised the estimation 

technique utilized to estimate our deferred 

revenue-prepaid postage liability for Forever 

Stamps. The change resulted from new 

information regarding customer’s retention and 

usage habits of applicable postage, and enabled 

us to update our estimate of stamps that will 

never be used for mailing. As a result of this 

change, deferred revenue-prepaid postage was 

decreased by nearly $1.1 billion. In accordance 

with accounting principles generally accepted in 

the U.S. (“GAAP”), the change was accounted 

for as a change in accounting estimate, and was 

reflected in operating results as an increase to 

revenue and a decrease in net loss by the same 

amount in the year ended September 30, 2016.

When the impact of the required PSRHBF 

prefunding expense, FERS amortization, noncash expenses for workers’ compensation and 

one-time change in accounting estimate are 

excluded, controllable income was $610 million. 

(See Financial Performance Results table on 

Page 25.)

For the fourth year in a row, revenue increased 

compared to the prior year, primarily due to an 

increase in Shipping and Packages revenue, 

which benefited from a strong calendar year 

2015 holiday season. This increase in operating 

revenue was partially offset by the expiration 

of the temporary exigent surcharge on marketdominant products that was implemented 

beginning in January 2014 and was in effect until 

April 10, 2016. We estimate that the expiration 

of the exigent surcharge reduced revenues by 

approximately $1 billion, compared to what it 

would have been if it was in effect through the 

entire year.

Total expenses of $77.1 billion in FY2016 

increased 4.2 percent, from $74 billion in 

FY2015. We had an increase for the year in 

compensation and benefits expense of 

$1.2 billion, attributable to contractually obligated 

salary escalations, and an increase in labor hours 

primarily resulting from higher Shipping and 

Packages volume. There was also a net 

$922 million increase in our workers’ 

compensation expense, mainly the result of 

changes in actuarial assumptions and the 

revaluation of existing workers compensation 

cases.

Although total mail volume remained flat in 

FY2016, First-Class Mail decreased by 1.4 billion 

pieces, or 2.2 percent from FY2015.
24 United States Postal Service — FY2016 Annual Report to Congress 

Revenue in Shipping and Packages increased by 

15.7 percent over the same period last year on 

volume growth of 13.7 percent, while Standard 

Mail revenue decreased slightly on a 1.1 percent 

volume increase. Overall, volume increased by 

1 million pieces.

The number of career employees increased by 

17,045 in FY2016, compared to the year before.

The Postal Service held approximately $8.1 billion 

of unrestricted cash entering FY2017. This is 

an increase of approximately $6 billion from the 

reported low in FY2012. This improvement in the 

Postal Service’s cash position would not have 

occurred had the Board of Governors’ TEC — 

in the interest of maintaining sufficient levels of 

liquidity — made the decision to defer our legally 

mandated PSRHBF prefunding payment due on 

Sept. 30, 2016, to ensure achievement of our 

statutory obligations, including the continuation 

of universal mail service to the nation. Aside 

from the prefunding deferral, the improvement 

is largely attributable to the temporary exigent 

surcharge which generated approximately 

$4.6 billion in incremental revenue from January 

2014 through April 10, 2016.

For more information and analysis of each 

program activity in the Postal Service budget 

and regarding the financial results of the Postal 

Service, see the USPS Form 10-K for FY2016 

at: http://about.usps.com/who-we-are/financials/

welcome.htm.

FY2017 Performance Plan – The expiration of 

the exigent surcharge and the ongoing decline 

in First-Class Mail volumes, coupled with 

contractual wage increases and higher benefits 

costs, are the primary reason that controllable 

income is expected to decrease from $0.6 billion 

in FY2016 to $0.1 billion in FY2017.

The Postal Service projects revenue growth 

of $0.2 billion, or 0.3 percent, compared to 

FY2016 despite the loss of approximately $1 

billion in revenue from the expiration of the 

exigent surcharge, due to continued growth in 

Shipping and Packages volume, partially offset 

by continued decreases in First-Class Mail. 

Shipping and Packages revenue is forecast 

to increase $1.8 billion through an expected 

volume increase of 7.6 percent as economic 

and e-commerce growth is extended through 

marketing initiatives.

Controllable operating expenses (a non-GAAP 

measure which excludes PSRHBF amortization, 

amortization of unfunded retirement liabilities and 

non-cash adjustments to workers’ compensation 

liabilities) are expected to increase $0.7 billion 

in FY2017 from both personnel and other 

non-personnel cost increases. Personnel cost 

increases are largely driven by scheduled general 

wage increases for two of our major unions, 

and higher health benefits costs. Higher nonpersonnel costs are forecast due to investments 

in information systems and support for package 

growth initiatives.

For more information regarding the financial 

performance plan of the Postal Service, see the 

USPS Integrated Financial Plan for FY2017 at: 

http://about.usps.com/who-we-are/financials/

welcome.htm.
United States Postal Service — FY2016 Annual Report to Congress 25

Key Financial and 

Operating Statistics

Financial Performance Results

(in millions)

Controllable income (unaudited) 1 FY2016 FY2015 FY2014

Net loss $ (5,591) $ (5,060) $ (5,508)

PSRHBF prefunding expense 5,800 5,700 5,700

Discount rate changes related to workers' compensation liability 1,026 809 485

Other non-cash changes in workers’ compensation liability2 188 (502) 673

Actuarial revaluation of retirement liability3 248 241 7

Change in accounting estimate4 (1,061) — —

Controllable income $ 610 $ 1,188 $ 1,357

1

Controllable income should not be considered a substitute for net income and other reporting measures under generally accepted accounting principles. 2

This is a net amount that includes changes in assumptions, as well as the valuation of new claims and revaluation of existing claims, less current year claim 

payments.

3

Determined by OPM in 2015 to amortize the $3.6 billion unfunded FERS retirement obligation based on actuarial valuations and assumptions. Payments are 

to be made in equal installments through 2046.

4

Please see the discussion on page 23 regarding the change in accounting estimate for more information.

Financial History Summary

(in millions, unaudited)

FY2016 FY2015 FY2014

Operating results

 Total revenue $ 71,498 $ 68,928 $ 67,830

 Operating expenses

 Compensation and benefits 48,689 47,519 46,000

 Retiree health benefits 9,105 8,811 8,685

 Workers’ compensation 2,682 1,760 2,554

 Transportation 6,992 6,579 6,586

 All other operating expenses 9,431 9,157 9,353

Loss from operations (5,401) (4,898) (5,348)

 Interest, net (190) (162) (160)

Net loss $ (5,591) $ (5,060) $ (5,508)

Financial position

Cash and cash equivalents* $ 8,077 $ 6,634 $ 4,906

Property and equipment, net 15,296 15,686 16,338

All other assets 1,846 1,694 1,718

Total assets $ 25,219 $ 24,014 $ 22,962

Accrued retiree health benefits $ 33,900 $ 28,100 $ 22,417

Workers' compensation liability 20,039 18,811 18,422

Debt 15,000 15,000 15,000

All other liabilities 12,262 12,494 12,454

Total liabilities $ 81,201 $ 74,405 $ 68,293

Total net deficiency $ (55,982) $ (50,391) $ (45,331)

*Cash and Cash Equivalents are Unrestricted.
26 United States Postal Service — FY2016 Annual Report to Congress 

Revenue, Pieces and Weight Statistics

(in millions of units indicated, unaudited)

FY2016 FY2015 FY2014

First-Class Mail1

 Revenue $ 27,496 $ 28,411 $ 28,416 

 Number of pieces 61,219 62,599 63,849

 Weight, pounds 3,057 3,166 3,165

Standard Mail2

 Revenue $ 17,622 $ 17,646 $ 17,426 

 Number of pieces 80,885 80,030 80,308

 Weight, pounds 7,960 7,974 8,100

Shipping and Packages services3

 Revenue $ 17,425 $ 15,062 $ 13,549 

 Number of pieces 5,161 4,539 3,970

 Weight, pounds 9,343 7,739 6,486

International Mail

 Revenue $ 2,695 $ 2,702 $ 2,909 

 Number of pieces 1,006 913 875

 Weight, pounds 484 459 444

Periodicals

 Revenue $ 1,507 $ 1,589 $ 1,625 

 Number of pieces 5,586 5,838 6,045

 Weight, pounds 2,042 2,168 2,275

U.S. Postal Service4

 Number of pieces 421 357 439

 Weight, pounds 117 114 111

Free matter for the blind4

 Number of pieces 45 46 46

 Weight, pounds 19 19 21

Other services revenue3 $ 3,623 $ 3,380 $ 3,839 

Deferred Revenue – Prepaid Postage5 $ 1,061 $ — $ —

Postal Service totals

Operating revenue $ 71,429 $ 68,790 $ 67,764 

Number of pieces 154,323 154,322 155,532

Weight, pounds 23,022 21,639 20,602

Note: Numbers for certain mail categories for the years FY2016, FY2015 and FY2014 have been reclassified subsequent to the Postal Service’s filing 

its Form 10-K with the PRC on November 15, 2016; therefore slight differences from the 10-K exist, which the Postal Service considers immaterial for 

financial reporting purposes. The reclassifications did not impact Total Operating Revenue amount.

1

Excludes First-Class Mail Parcels.

2

Excludes Standard Mail Parcels.

3

See Shipping and Packages Services and Other Services Statistics table on page 27.

4

Includes the U.S. Postal Service’s mail and free mail provided to certain groups.

5

The Postal Service recognizes revenue for postage when a piece of mail is processed and delivered, not at the time a stamp is sold and cash is received. 

To reflect the difference in revenue and cash received, management estimates the amount of postage stamps sold but not yet used and this amount is 

recorded as a deferred revenue-prepaid postage liability. This update relates solely to changes in estimates of consumer behavior and, in accordance with 

GAAP, the adjustment is considered a change in accounting estimate.
United States Postal Service — FY2016 Annual Report to Congress 27

Shipping and Packages Services and Other Services Statistics

(in millions of units indicated, unaudited)

FY2016 FY2015 FY2014

Priority Mail Express

 Revenue $ 809 $ 779 $ 760 

 Number of pieces 33 36 36

 Weight, pounds 35 38 37

First-Class Packages1

 Revenue $ 2,787 $ 2,294 $ 2,004 

 Number of pieces 1,030 933 847

 Weight, pounds 377 320 283

Priority Mail2

 Revenue $ 8,202 $ 7,689 $ 7,237 

 Number of pieces 1,028 1,007 934

 Weight, pounds 2,466 2,370 2,162

Parcel Select Mail

 Revenue $ 4,661 $ 3,363 $ 2,597 

 Number of pieces 2,415 1,937 1,549

 Weight, pounds 5,014 3,601 2,623

Parcel Return Service Mail

 Revenue $ 169 $ 152 $ 139 

 Number of pieces 64 60 56

 Weight, pounds 188 171 171

Package Services

 Revenue $ 797 $ 785 $ 812 

 Number of pieces 591 566 548

 Weight, pounds 1,263 1,239 1,210

Total shipping and packages services

 Revenue $ 17,425 $ 15,062 $ 13,549 

 Number of pieces 5,161 4,539 3,970

 Weight, pounds 9,343 7,739 6,486

Other services

 Certified Mail

 Revenue $ 670 $ 669 $ 673 

 Number of articles 198 200 208

 Return Receipts

 Revenue $ 359 $ 374 $ 362 

 Number of articles 154 158 154

 USPS Tracking

 Revenue $ 1 $ 41 $ 84 

 Number of articles 4,318 3,550 2,931

 PO Box Services revenue $ 951 $ 924 $ 902 

 Money Orders

 Revenue $ 153 $ 159 $ 164 

 Number of articles 90 93 97

 Insurance

 Revenue $ 77 $ 90 $ 92 

 Number of articles 15 19 20

 Shipping and mailing supplies

 Revenue $ 109 $ 111 $ 119 

 Number of articles 54 55 60

 Other services revenue $ 1,303 $ 1,012 $ 1,443 

Total other services revenue $ 3,623 $ 3,380 $ 3,839 

Note: Numbers for certain mail categories for the years FY2016, FY2015 and FY2014 have been reclassified subsequent to the Postal Service’s filing its 

Form 10-K with the PRC on November 15, 2016; therefore slight differences from the 10-K exist, which the Postal Service considers immaterial for financial 

reporting purposes. The reclassifications did not impact Total Operating Revenue amount.

1

Includes First-Class Mail Parcels and First-Class Package Services.

2

Includes Retail Ground which is a retail-only product classified as Market-Dominant. Retail Ground is priced identically to Priority Mail for Zones 1–4 and is 

functionally equivalent to Priority for those Zones.
28 United States Postal Service — FY2016 Annual Report to Congress 

Post Office and Delivery Points

(in actual units indicated, unaudited)

FY2016 FY2015 FY2014

Post Offices, stations and branches

Postal-managed

 Post Offices 26,611 26,615 26,669

 Classified stations, branches and carrier annexes 4,974 4,991 4,993

Total Postal-managed 31,585 31,606 31,662

 Contract Postal Units 2,458 2,504 2,660

 Village Post Offices 877 874 767

 Community Post Offices 503 536 560

Total offices, stations and branches 35,423 35,520 35,649

Residential delivery points

 City delivery 82,411,214 82,020,625 81,650,586

 Rural 42,065,134 41,378,300 40,750,668

 PO Box 15,926,420 15,894,358 15,858,668

 Highway contract 2,880,500 2,827,085 2,774,213

Total residential delivery 143,283,268 142,120,368 141,034,135

Business delivery points

 City delivery 7,664,927 7,633,285 7,592,773

 Rural 1,614,185 1,584,916 1,554,422

 PO Box 3,452,198 3,535,563 3,634,467

 Highway contract 79,602 77,696 76,179

Total business delivery 12,810,912 12,831,460 12,857,841

Total delivery points 156,094,180 154,951,828 153,891,976

 Change in delivery points 1,142,352 1,059,852 971,543
United States Postal Service — FY2016 Annual Report to Congress 29

USPS Employees

(actual numbers, unaudited)

FY2016 FY2015 FY2014

Headquarters and HQ related employees

 Headquarters 3,098 2,916 2,934

 Headquarters — field support units 3,640 3,710 3,618

 Inspection service — field 2,411 2,379 2,376

 Inspector general 1,134 1,142 1,132

Total HQ and HQ related employees 10,283 10,147 10,060

 Field employees

 Area offices 821 851 818

 Postmasters/installation heads 14,398 14,506 16,538

 Supervisors/managers 24,832 23,754 23,035

 Professional administration and technical personnel 4,526 4,468 4,353

 Clerks/nurses 130,178 125,609 118,925

 Mail handlers 39,405 38,046 38,910

 City delivery carriers 170,885 164,378 164,626

 Motor vehicle operators 7,723 6,658 6,603

 Rural delivery carriers — full-time 68,261 67,044 66,373

 Building and equipment maintenance personnel 32,307 31,136 32,807

 Vehicle maintenance employees 5,289 5,266 5,252

Total field employees 498,625 481,716 478,240

Total career employees 508,908 491,863 488,300

Noncareer employees

 Casuals 1,633 1,727 1,658

 Postal support employees 26,368 29,312 24,781

 Nonbargaining temporary 355 367 276

 Rural part-time: subs/RCA/RCR/AUX 53,183 50,640 48,099

 Postmaster relief and leave replacements 3,626 4,839 13,207

 City carrier assistant (CCA) 40,436 37,767 36,081

 Mail handler assistant (MHA) 5,280 5,322 5,475

Total noncareer employees 130,881 129,974 129,577

Total employees 639,789 621,837 617,877
30 United States Postal Service — FY2016 Annual Report to Congress 
United States Postal Service — FY2016 Annual Report to Congress 31

PART 2

FY2016 Comprehensive Statement 

on Postal Operations

Improving Customer Experience

Engaging and Empowering Employees 

to Better Serve Customers

Investing in Future Platforms

Working Together with America’s Businesses

 Accelerating the Pace of Innovation

Connecting Communities

Maintaining Focus and 

Accelerating Growth
32 United States Postal Service — FY2016 Annual Report to Congress 

Improving Customer 

Experience

Our customers are at the center of everything 

we do. We’re dedicated to making sure every 

interaction with the Postal Service is a positive 

experience. Americans depend on us to provide 

reliable, dependable and economical products 

and services, and we’re delivering on that 

promise in new and exciting ways.

Informed Visibility – The Postal Service is 

committed to providing customers with more 

information about their mail and packages, from 

the moment we receive them to the time we 

deliver them to homes and businesses. We’re 

focused on using technology to provide real-time 

visibility for our products as they move through 

the postal system. One of the technologies we’re 

investing in is Informed Visibility (IV). This solution 

will provide comprehensive, near real-time, 

data-driven service performance measurement 

and diagnostics, mail inventory and predictive 

workloads and end-to-end tracking and reporting 

for all mail. For the Postal Service, it means 

access to valuable business and operational 

intelligence to help make us more efficient 

in what we do. IV also will help reduce our 

operational costs and lay the foundation for 

enterprise analytics.

For our customers, IV will help the Postal Service 

provide consistent, reliable and predictable 

service. In addition, it will add new value to mail, 

providing customers with long-needed, near 

real-time mail visibility, tracking and performance 

metrics necessary to help them plan their 

mailings, measure success of each mailing 

campaign and efficiently staff their operations.

In FY2016, we expanded the IV application by 

providing internal reports, tools and visualizations 

to Operations. These tools help monitor scan 

compliance and manage service performance. 

We also began development of mail inventory 

and predictive workloads, which will provide 

Operations with greater insight into managing 

workloads and resources. Additionally, we began 

piloting the new mail tracking and reporting 

application to support visibility for mailers in 

September 2016.

Informed Delivery – With the growth of digital and 

mobile communications, we have an opportunity 

to transform how consumers view mail and make 

it more accessible and convenient. We are testing 

Informed Delivery, which provides customers with 

a scanned image of the outside of letter-sized 

mailpieces that they will be receiving later that day. 

Customers have access to the images through 

an online dashboard via the MyUSPS platform 

on usps.com as well as through the MyUSPS 

application for smart phones, or they can opt to 

receive an email notification.

The Postal Service first tested Informed Delivery 

in Northern Virginia in 2014 and expanded it to 

areas of New York and Connecticut in 2015. 

A national launch is planned for spring 2017. 

As the test expands, new features will be 

implemented, including the ability to access 

interactive content associated with mail images. 

The insights and data gathered demonstrate 

that Informed Delivery notification service has a 

strong value.

USPS.com and the Postal Store – Our 

customers enthusiastically embrace the ease 

and convenience of online shipping and mailing 

through our website, usps.com. In FY2016, there 

were over 1.7 billion visits to usps.com — an 

increase of 11 percent compared to the prior 

year. With an average of 4 million daily visits to our 

site, our digital footprint continues to expand. As 

an e-commerce platform, usps.com generated 

just over $1 billion in revenue with more than 55 

million purchase transactions, which represents 

more than 53 million unique users in the United 

States and worldwide.

Due to the significant increases in online traffic 

and revenue, a new web analytics platform was 

implemented in late FY2016. This new platform 

will help us measure and analyze website growth 

while providing important insights to help improve 
United States Postal Service — FY2016 Annual Report to Congress 33

the customer experience. Data from the analytics 

platform will also be integrated into a new user 

experience testing tool. Both tools will provide 

usps.com the ability to conduct and analyze user 

experience testing to continually improve the 

website experience.

During FY2016, we focused on continued 

optimization to improve and align the customer 

experience across all digital touch points 

including mobile, desktop and retail kiosks. Our 

goal is to provide our customers with a state-ofthe-art e-commerce experience while growing 

revenue, strengthening our brand, increasing 

customer satisfaction and decreasing call volume 

to our Customer Care Centers.

A highlight of this effort was the development 

of a digital style guide to create consistency 

across all digital platforms. The style guide 

provides design and development teams with 

a standardized style, elements for a unified 

approach and consistent voice across the 

usps.com domain and other microsites for the 

Postal Service. This effort will help build our 

brand, save development time and money and 

provide a seamless customer experience.

We continue to expand and utilize the data that 

we receive from our customer feedback tools. 

We frequently update our customer satisfaction 

survey to ensure the questions being asked are 

relevant and provide actionable data. We also 

use a customer experience replay tool, which 

enables us to visualize customer activity on the 

site. During FY2016, we also developed pagelevel surveys to gather customer feedback for 

specific content areas and applications on the 

site. Customer responses from these tools 

helped us identify opportunities to improve the 

customer experience. Customer feedback helped 

us to update content on our website, such as 

enhancing our frequently asked questions section 

and Hold Mail Service on usps.com.

For FY2016, we led redesign efforts for 

Customer Registration, usps.com homepage 

and USPS Tracking as well as changing the user 

interface for Hold Mail Service. We conducted 

user experience reviews for our redesign efforts 

and used the recommendations that resulted 

from the reviews to ensure a “friction-free” user 

experience. The creative development work for 

many of these efforts was addressed in FY2016, 

with scheduled launch in FY2017.

Total revenue for the online Postal Store grew 

4 percent in FY2016 compared to the previous 

year, with total revenue of more than $280 million. 

Significant enhancements were made to the 

Postal Store to improve the customer experience 

and grow revenue. In the second quarter, PayPal 

was implemented as an alternative payment 

option for online desktop and mobile Postal Store 

transactions, with almost $7.55 million in PayPal 

revenue and an estimated $450,000 savings as a 

result of reduced merchant credit card fees.

To improve the usps.com search functionality, 

changes were made in the third quarter of 

FY2016 to the existing online search function to 

help customers find relevant information, services 

and products more quickly and seamlessly. In 

FY2017, a new search feature will be added to 

the Postal Store to allow customers to quickly 

filter through relevant items, collectibles, shipping 

supplies and retail merchandise.

My USPS.com – My USPS.com is an online 

customer portal that aggregates information 

about a household’s mail and shipments, 

communicates delivery status and provides 

functionality to control delivery. It provides 

eligible residential customers with a single, 

comprehensive dashboard solution with the 

ability to track and manage incoming USPS 

domestic packages online. With the integration 

of Informed Delivery, the portal also serves as 

a way to navigate between package and mail 

views for customers enrolled in both services.
34 United States Postal Service — FY2016 Annual Report to Congress 

USPS Mobile – Mobile solutions are essential 

to providing information and real-time data for 

Postal Service customers. We offer a set of our 

most popular features on our mobile website 

(m.usps.com) as well as Android and iPhone 

mobile applications. Users are able to track 

packages, log on to My USPS, create Priority 

Mail shipping labels, buy stamps, calculate 

shipping prices, find USPS locations and ZIP 

Codes, schedule a pickup, hold mail and 

change an address — all from the convenience 

of their mobile phones. Over 55 million users 

accessed our mobile website in 2016. The 

Postal Service continues to enhance the mobile 

website to provide a seamless experience for our 

customers.

Delivering an Excellent Retail Experience 

A visit to the Post Office has been a shared 

experience by Americans for nearly 240 years. 

Ensuring that visit is effective, efficient and meets 

customer expectations requires a focused 

commitment and ongoing effort by the Postal 

Service.

Customer Satisfaction – Retail performance is 

measured by two programs, the Retail Customer 

Experience (RCE) program and the Point of 

Sale (POS) Survey. The RCE program uses 

private “mystery shoppers” to conduct mailing 

transactions at over 7,700 of our large retail 

outlets. Data from these transactions is analyzed 

and evaluated, and feedback is provided to help 

improve the customer experience. With the POS 

Survey, a URL and QR code are printed at the 

bottom of the customer receipt. We encourage 

customers to provide their feedback on a short 

6-question web-based survey.

In FY2016, the Postal Service made several 

changes to the survey to better inform us of key 

aspects of a customer’s visit. The overall retail 

experience score from the RCE mystery shops 

was 90.76 percent versus the previous year 

score of 92.63, a reduction of 1.87 percentage 

points. One key measure of a customer’s retail 

experience is the time spent waiting in line, and 

the service standard for this attribute is “Five 

Minutes or Less.” For FY2016, the national wait 

time in line average was 2 minutes, 48 seconds 

versus the prior year of 2 minutes, 36 seconds, 

an increase of 12 seconds.

FY2016 FY2015 Variance

Average Wait 

(mm:ss) 2:48 2:36 0:12

Overall Retail 

Experience* 90.76% 92.63% (1.87%)

*Source: Retail Data Mart, Retail Customer Experience Program.

Mobile Point of Sale – Technology is changing 

and improving the way we conduct business 

with our customers at our retail locations. The 

mPOS solution — Mobile Point of Sale — is 

an example of how the Postal Service is doing 

just that. The device consists of an Apple 

iPod Touch, integrated barcode scanner and 

credit card reader, wireless receipt printer 

and wireless label printer. The Postal Service 

continues to add new applications to mPOS. 

One such application that was added this past 

year — “In Person Proofing” (IPP) — gives the 

Postal Service a means of helping its customers 

validate their personal information for several 

different applications.

The mPOS made its debut in 2014 at 68 

Post Offices. By 2015, more than 6.7 million 

transactions had been conducted on the mPOS 

generating more than $17 million dollars in 

revenue. At the end of FY2016, there were more 

than 2,900 mPOS sites across the nation with 

over 26 million transactions being conducted and 

more than $92 million dollars being generated 

in revenue. This represents approximately a 

284 percent increase in transactions and a 427 

percent increase in sales from the prior year.

Our customers and the Postal Service have 

seen the benefits of mPOS. Customers have 

enjoyed the “swipe and go” convenience of 

being able to conduct transactions quickly and 

efficiently without waiting in line. Whether they’re 
United States Postal Service — FY2016 Annual Report to Congress 35

picking up a package or dropping off a prepaid 

mailpiece, customers are experiencing extra 

convenience at the retail counter through the 

use of mPOS. Using this innovative technology, 

Sales and Service Associates have the ability to 

process many of the simpler transactions in the 

lobby. Customers can get either a paper or email 

receipt, an option that also reduces paper costs 

for the Postal Service as well as supports its “go 

green” efforts.

Alternate Retail Access Points – We also 

provide our customers with convenient alternate 

access options to our products and services. 

Customers can choose to use our self-service 

kiosks, online mailing or our shipping and mobile 

applications. They can likewise opt to utilize 

our Approved Postal Provider network where 

they can purchase stamps, mail a letter or ship 

a package. These contracted and licensed 

retailers generate additional incremental revenue 

for the Postal Service by offering our products 

and services in places where our customers live, 

work and shop and at times that are convenient 

for them. The Approved Postal Provider network 

includes Contract Postal Units (CPUs), Contract 

Post Offices (CPOs), Village Post Offices (VPOs) 

and Approved Shippers (AS). In FY2016, the 

Approved Postal Provider network consisted of 

nearly 12,000 locations nationwide.

The Postal Service periodically reviews the 

characteristics of our products and services 

and how customers are using them. In FY2016, 

we reviewed the PC Postage channel. The 

review uncovered that key characteristics of this 

channel had changed since 2008. As a result, 

the Postal Service changed how it categorized 

PC Postage from retail to commercial revenue. 

This impacted the metrics that we have 

traditionally used to measure alternate access. 

With this change, retail window brick and mortar 

now represents 76 percent of our total retail 

revenue.

Making it Easier to Mail and Receive Mail

What do customers want? They want to save 

time. They want convenience and simplicity. 

They want options on how and where they do 

business with the Postal Service. We’re meeting 

those expectations.

Mail Forwarding and Change of Address – The 

Postal Service processes approximately 37 

million change-of-address requests each year. 

We make the process as simple as possible 

for customers. A visit to the Post Office isn’t 

necessary — customers can change their 

address online at usps.com. To modify an 

original Change of Address Order, they can 

go to managemymove.usps.com. Customers 

also can use a credit or debit card with a billing 

address that’s different from either the old or new 

addresses. This feature is particularly useful for 

customers whose card is associated with a PO 

Box or work billing address, or for those filling out 

a request for an elderly or deceased relative.

Retail Revenue by Channel

Services

(unaudited)

FY2016 

retail 

revenue 

($ millions)

FY2016 

percent share 

of total retail 

revenue

FY2016 share 

difference 

from FY2015

FY2015 

retail 

revenue 

($ millions)

FY2015 

percent share 

of total retail 

revenue

FY2015 share 

difference 

from FY2014

FY2014 retail 

revenue 

($ millions)

FY2014 

percent share 

of total retail 

revenue

Retail window brick 

and mortar

$10,244 76% 21.72% $10,430 54.28% (1.98)% $10,706 56.26%

Expanded access $ 3,232 24% (21.72)% $ 8,785 45.72% 1.98% $ 8,325 43.74%

Total retail revenue $13,476 100% — $19,215 100% — $19,031 100%
36 United States Postal Service — FY2016 Annual Report to Congress 

Premium Forwarding Service – Premium 

Forwarding Service Residential (PFS-R) provides 

customers the option of temporarily forwarding 

their mail once a week by paying the application 

fee and weekly shipment fees. The customer’s 

PFS-R mail is shipped via Priority Mail service 

with USPS Tracking. An online version of PFS-R 

is available, offering customers the convenience 

of applying for and managing their accounts at 

usps.com. PFS-R online continues to help grow 

revenue and create efficiencies by increasing the 

portion of transactions conducted online. Overall, 

PFS-R revenue grew 2.7 percent in FY2016, and 

PFS-R online revenue already represents over 28 

percent of all PFS-R revenue.

Providing a Seamless Experience for 

Commercial Mailers

Our use of information and technology enables 

us to compete more effectively and deliver 

greater predictability and value to our customers, 

especially commercial mailers. We’re streamlining 

and simplifying systems, improving access to 

information and providing rich data and analytics 

to business mailers.

RIBBS – RIBBS (Rapid Information Bulletin 

Board System) is an important online source of 

information for both industry and USPS users, 

providing service alerts, technical updates, 

product webinars and more. A redesign of the 

website is underway to create a more intuitive 

experience for users. The Postal Service is 

working closely with the Mailers’ Technical 

Advisory Committee in this effort. Our focus 

is to improve search functionality, make the 

site compliant with accessibility requirements 

and better enable mailers to stay up-to-date 

and informed. After debuting the redesign at 

the National Postal Forum, a test site called 

PostalPro will allow for customer feedback while 

keeping the old RIBBS accessible.

Business Solution Center – The Business 

Solution Center (BSC), formerly referred to as 

the Premier Business Mail Entry Unit (BMEU), 

is administered by the Mail Entry and Payment 

Technology group. The mission of the BSC 

is to provide world-class, one-stop, solutionoriented customer service by identifying the best 

solutions for commercial mailing needs. The 

center offers consultation, diagnostics, research, 

recommendations and hands-on assistance. 

BMEUs obtain this level of service by meeting 

set requirements that include completing 30 

hours of training, implementing a Lean Six Sigma 

process at the unit and offering the latest mailing 

tools and technology to its customers.

Mail Preparation, Addressing and 

Commercial Acceptance 

Our continued adoption of Intelligent Mail and 

Full-Service technologies, which rely on the use 

of smart barcodes, has enabled continuous 

improvements in the way we accept and verify 

commercial business mailings. We are working 

to reduce reliance on manual processes and 

move into a digitized process flow with programs 

such as Full-Service Intelligent Mail, Seamless 

Acceptance, eInduction, Electronic Verification 

System and payment modernization. These 

evolving capabilities empower customers with 

a suite of tools enabling payment flexibility, 

preparation simplicity, multiple access points for 

account management and deeper visibility into 

mailing status.

Full-Service – Full-Service uses Intelligent 

Mail barcodes on mail containers, handling 

units (trays, sacks) and mailpieces to provide 

end-to-end visibility of the mailstream. As of 

September 2016, overall Full-Service adoption is 

at 90.43 percent of all eligible Full-Service mail. 

Information provided in electronic documentation 

allows for verification of key elements such 

as proper by/for identification and barcode 

uniqueness. Results of these verifications are 

available by viewing the Mailer Scorecard (see 

Mailer Scorecard on next page). Assessments 

began in November 2016 based on October 

2016 verifications.
United States Postal Service — FY2016 Annual Report to Congress 37

eInduction – The electronic induction process, 

better known as eInduction, simplifies the 

induction of drop shipments and expedited plant 

load mailings. It enables the use of electronic 

documentation, Intelligent Mail container 

barcodes and handheld scanner technologies 

to verify the payment and preparation of 

commercial mail containers. eInduction 

eliminates the need for paper forms and manual 

reconciliation at the entry facility. Nearly 65 

percent of all containers are shipped through 

eInduction. Results of these verifications are 

displayed in the Mailer Scorecard.

Seamless Acceptance – This program 

automates the verification of commercial 

mailings by leveraging electronic documentation, 

Intelligent Mail container barcodes, Intelligent 

Mail tray barcodes, Intelligent Mail barcodes 

and information collected from both handheld 

sampling devices and mail processing 

equipment scans. Seamless Acceptance 

answers two critical questions: has every piece 

of mail been paid for and was every piece of 

mail paid for at the correct rate. Results of these 

verifications are available by viewing the Mailer 

Scorecard.

Over 18 percent of all commercial volume is 

entered through Seamless Acceptance. The 

Postal Service delayed adding new mailers to 

Seamless Acceptance while we continue to work 

with the mailing industry to address concerns 

on resolving and validating undocumented 

mailpieces and sampling data and the Mailer 

Scorecard. Once these issues are resolved, the 

program will be opened up to all mailers.

Move Update – The Move Update program is 

designed to keep mailing address lists current. 

We’re proposing to update the verification 

of Move Update compliance from sampling 

to a census verification approach using mail 

process equipment scan data. This census 

method approach will be for any mailer 

submitting Full-Service mail volume. Results of 

these verifications are displayed in the Mailer 

Scorecard. The industry will be engaged in 

validation and testing of the Mailer Scorecard 

prior to notification of assessments. In December 

2014, the Postal Service published an advance 

notice in the Federal Register announcing a 

census method approach for Move Update 

verification. Based on mailer feedback from the 

initial posting, another notice was published in 

July 2016. Implementation of this approach is 

pending regulatory approvals.

Mailer Scorecard – A Mailer Scorecard provides 

a dashboard view of the mail quality verification 

results of letter and flat mailing activity over a 

calendar month. Results of verifications can be 

viewed by the mail owner or mail preparer. Today, 

mail quality is established on individual mailings 

through manual verification processes. The 

results of the manual verifications, including any 

additional postage charges, are communicated 

to the mailer prior to the acceptance of the 

mail, allowing the mailer the opportunity to 

dispute or accept additional postage charges 

prior to induction. The key initiatives mentioned 

previously — Full-Service, Move Update, 

eInduction and Seamless Acceptance — 

transition mailers from the current process to a 

trend-based process where verification results 

and additional postage amounts are aggregated 

over an entire calendar month.

This change has mailers concerned about 

post-induction assessment processes and 

with performance and functionality of the 

Mailer Scorecard. Working with the mailing 

industry through the Mailers’ Technical Advisory 

Committee, we completed Mailer Scorecard 

testing for Full-Service, Move Update, Seamless 

Acceptance and eInduction. The industry testers 

represented a well-rounded group of mailers 

with a comprehensive set of mailing scenarios. 

Results of this testing were positive. USPS 

announced an assessment date of November on 

October data for Full-Service verifications. The 

Postal Service continues to work with the mailing 
38 United States Postal Service — FY2016 Annual Report to Congress 

industry to resolve concerns with misshipped 

logic for eInduction and undocumented and 

sampling logic for Seamless Acceptance.

A new publication, Streamlined Mail Acceptance 

for Letters and Flats, contains policies and 

processes for verification of eligible business 

mailings using tools provided by Full-Service 

Intelligent Mail, Move Update, eInduction and 

Seamless Acceptance. The Postal Service has 

sought industry feedback on the publication. 

The publication contains an explanation of 

each verification program, detailed participation 

requirements for each program, descriptions of 

USPS verifications, mail quality error thresholds 

and postage assessment calculations.

Automated Package Verification – This revenue 

assurance program is designed to collect 

shortpaid revenue for packages created through 

PC Postage or packages entered into the system 

through retail channels. It automates the validation 

of weight and rate elements of packages as 

they are processed in plants to ensure correct 

postage was paid. In February 2016, a Federal 

Register notice was published requiring PC 

Postage vendors and resellers to collect 

shortpaid postage effective Dec. 31, 2016.

Streamlining Customer Payment and 

Account Management Processes

Several initiatives in FY2016 improved our ability 

to manage customer incentives, contract pricing 

and loyalty tracking. At the same time, we gained 

deeper insights into how our customers use our 

products and their revenue contribution. New 

technical specifications, namely “Intelligent Mail 

Indicia Performance Criteria,” were published for 

PC Postage and meter vendors that will provide 

the Postal Service with improved product usage 

information. Improvements in payment and 

account management will reduce the current 

burden experienced by mailers in opening 

permits and managing accounts.

Payment Modernization – This initiative will 

replace current product-centric payment 

systems with a single, secure centralized 

payment and account management system. 

Accounts will be created and managed online, 

eliminating the need for hard copy forms and 

simplifying account setup and management. 

Commercial mailers will be able to use a single 

national account to pay for a variety of products 

and services (including permit mailings and 

commercial PO Boxes), view enterprise spending 

through integrated reporting and allow multiple 

users secure access to payment information 

using unique login credentials. Deployed in a 

phased approach, this initiative is expected to 

launch in FY2017.

Collaborating with Industry

The input and feedback of our industry partners 

are essential as we introduce new products 

and services. The Postal Service works closely 

with its mailing industry partners through many 

venues. We share a common goal — a strong 

and vibrant mailing industry that will continue to 

be an engine of economic growth for the nation.

National Postal Forum – Since 1968, the National 

Postal Forum (NPF) has been the leading mailing 

industry conference, bringing together the Postal 

Service and its major customers. The goal of the 

NPF, a not-for-profit educational corporation, is to 

bring industry professionals together to interact 

with Postal Service management and learn about 

existing and future USPS products and services. 

In 2016, the NPF was held in Nashville, TN, 

with Postmaster General Megan Brennan as the 

keynote speaker. On average, the forum attracts 

approximately 3,000 large and small business 

customers from across the country.

The four-day NPF annually showcases the latest 

in technology and innovation, providing a unique 

opportunity for mailers to network with each 

other as well as talk to potential vendors and 

suppliers. It also features educational workshops 

on topics ranging from marketing to operations, 

general sessions with senior postal leadership, 

certification courses, focus group sessions and 
United States Postal Service — FY2016 Annual Report to Congress 39

other activities. Attendees hear how the Postal 

Service and industry are collaborating to develop 

and deliver solutions to service issues, share the 

latest information on logistics and operations and 

strengthen the relationship between the mailing 

and shipping industries.

Mailers’ Technical Advisory Committee – The 

Postmaster General’s Mailers’ Technical 

Advisory Committee (MTAC) is another venue 

for the Postal Service to share technical 

information with mailers and receive advice 

and recommendations from them on matters 

concerning postal products and services. 

MTAC comprises nearly 175 executives and 

representatives who represent 50 associations 

and mailers. MTAC’s list of accomplishments 

highlight successful collaborations on issues 

ranging from barcoding improvements to 

implementing drop shipping changes to 

modifying business mail entry processes.

To better serve the mailing community, MTAC 

is organized into four key focus areas: Mail 

Preparation, Entry and Operations; Enterprise 

Analytics and Data Usage; Emerging Technology 

and Product Innovation; and Payment and 

Acceptance and Education. Each of these areas 

focus on customers’ specific needs and further 

supports the mission of providing exceptional 

customer service.

Postal Customer Councils – Postal Customer 

Councils (PCCs) consist of Postal Service 

leaders and business mailers who work together 

at the local level to promote the value of mail, 

address mailing concerns and exchange ideas. 

The goal is to maximize the benefits of our 

products, programs, services and procedures. 

Through regular meetings, educational programs 

and seminars, PCC members learn about the 

latest Postal Service products and services that 

will help them grow their businesses. There are 

more than 155 active PCCs nationwide.

Each year the importance of PCCs and their 

contributions to the success of the Postal 

Service are celebrated during National PCC 

Week, which features a state-of-the-business 

address by the Postmaster General. Events were 

held Sept. 19–23 with more than 100 PCCs 

participating. Our leadership spoke at more than 

80 events, with an estimated 12,000 customers 

in attendance.

Taking Care of Customers

Our Consumer and Industry Affairs group 

is responsible for Postal Service customer 

interaction and support for individual consumers, 

small businesses, large corporations and 

commercial mailers. The Office of Consumer 

Advocate and Customer Relations serves to 

confirm the “voice of the customer” is accurately 

represented to the organization and is focused 

on ensuring that each and every customer has 

a positive customer experience. The primary 

objective is to improve customer interactions with 

the Postal Service and position “the value of the 

mail” in a consumer and business environment. 

In addition, the group develops a strategic 

direction, policy improvements, program 

enhancements and standardized expectations to 

field consumer and industry contact operations.

Consumer and Industry Affairs reaffirms 

the importance of customer service and 

shares customer insights through monthly 

videos, weekly messaging, training, tools and 

resources that inform and engage employees. 

We’re continuously working to improve 

our standardized complaint handling and 

resolution process, which provides guidelines 

encompassing initial contact through resolution. 

A better resolution process for the customer 

increases their overall satisfaction. We want to 

improve processes and enhance systems in 

ways that support timely and thorough resolution 

of customer concerns and inquiries.

Customer Care Centers – Our four Customer 

Care Centers are staffed by Postal Service 

employees. In FY2016, the centers received 

nearly 49 million calls, of which 33 million were 
40 United States Postal Service — FY2016 Annual Report to Congress 

handled through the self-service interactive voice 

response system. Nearly 16 million callers, about 

52,000 per day, requested additional assistance 

from an agent.

Business Service Network – The national 

Business Service Network (BSN) is dedicated 

to providing the best customer experience to 

over 20,000 of the Postal Service’s largest 

customers. The BSN encourages a proactive 

approach that fosters a one-on-one relationship 

with our customers and serves as the 

essential link between them and Postal Service 

operations. By understanding our customers 

and translating their business needs, the Postal 

Service not only meets but continuously exceeds 

expectations by providing excellent service, 

communications and information to our most 

valuable customers.

Security Comes with a Stamp

Despite the many changes to the Postal Service 

since its inception, there is this constant held 

by our customers: Americans have the right to 

mail and receive letters and packages with every 

expectation that no one will tamper with or steal 

their mail. The Postal Inspection Service, the 

federal law enforcement, crime prevention and 

security arm of the Postal Service, helps deliver 

on that expectation.

The Postal Inspection Service ensures the safety, 

security and integrity of the U.S. Mail. Their 

mission is to support and protect the Postal 

Service and its employees, infrastructure and 

customers; enforce the laws that defend the 

nation’s mail system from illegal or dangerous 

use; and ensure public trust in the mail. The 

Postal Inspection Service completes this mission 

with a workforce comprising Postal Inspectors; 

uniformed Postal Police Officers; contract 

security providers; and a cadre of professional, 

technical and administrative employees.

Our Postal Inspectors investigate a wide range 

of postal-related crimes, such as mail theft, 

identity theft, dangerous mail, threatening letters, 

mail bombs, assaults on our employees and 

postal-related robberies and burglaries. And they 

protect against the use of the mail to launder 

drug money, defraud customers, traffic in illegal 

drugs and exploit children.

The Postal Inspection Service also maintains a 

state-of-the-art National Forensic Laboratory, 

comprising highly trained forensic scientists 

and technical specialists who play a key role 

in identifying, apprehending, prosecuting and 

convicting individuals responsible for postalrelated criminal offenses. They provide scientific 

and technical expertise to the criminal and 

security investigations of the Postal Inspection 

Service.

Carrying out that mission also means ensuring 

that our employees, customers and some 

32,000 Postal Service facilities are safe from 

criminal attack and the nation’s mail system is 

protected from criminal misuse. Whether dealing 

with mail thieves in colonial times, stagecoach 

robbers in the 1800s, gangsters in the 1930s, 

Wall Street insider traders in the 1980s, the 

Unabomber in the 1980s and 1990s, or, in this 

century, anthrax mailings and cybercrimes — the 

Postal Inspection Service has been there.

If it has anything to do with safeguarding the 

safety, security and integrity of the nation’s 

mail system from criminal misuse, they do it. 

And they’ve been doing it successfully since 

Benjamin Franklin appointed William Goddard 

the first surveyor, the precursor of today’s Postal 

Inspector, on Aug. 7, 1775.
United States Postal Service — FY2016 Annual Report to Congress 41

Engaging and 

Empowering 

Employees to Better 

Serve Customers

For the first time in history, there are five 

generations in the workforce. Understanding 

these generational differences is a key factor in 

how we as an organization will adapt internally 

and externally to serve the needs of our 

customers. The face of the Postal Service is 

represented by every employee who touches 

any facet of the mail. By taking steps to better 

engage and empower our employees, we’ll 

strengthen our commitment to delivering 

excellent customer service for the nation, now 

and for the future.

Investing in Leadership and Employee 

Growth

The Postal Service is now operating in the most 

complex and competitive business environment 

in our history, one that’s marked by uncertainty 

and change. Despite the difficulties this business 

environment presents, we’ve withstood every 

challenge because of strong leadership and 

committed employees.

Leadership Readiness – Similar to most federal 

agencies, a large number of our managers 

and senior leaders are eligible for retirement. 

To plan for the significant risk this poses, in 

FY2016 we implemented a new assessment 

process for Corporate Succession Planning 

(CSP) to enable us to gauge leadership potential, 

allowing us to better identify critical experiences 

needed to build a robust leadership pipeline. We 

administered our operations-focused leadership 

programs such as New Supervisor Program 

(NSP), Managerial Essentials for Field Leadership 

(MEFL) and Postmaster Essentials (PME) to 

ensure that our managers and supervisors are 

job ready. During the year, we offered more 

classes than originally planned to meet the 

increased demands of the organization.

Also, our Executive Leadership Team 

demonstrated an unwavering commitment to 

employee engagement and invested in utilizing 

our engagement leaders and champions 

throughout the organization to conduct 

engagement leader training for employees 

at all Executive and Administrative Schedule 

(EAS) levels within the organization. Altogether, 

these efforts improve leadership readiness and 

support culture changes necessary for long-term 

success.

Our leadership development programs achieved 

important outcomes in FY2016, including:  The new CSP assessment process helped 

us identify 1,600 potential successors 

to leadership positions and has been 

incorporated into the CSP nomination 

process for new potential successors.

 Eighty-eight percent of critical Postal Career 

Executive Service (PCES) positions now have 

at least one “ready now” potential successor, 

and 158 new potential successors were 

added to CSP. To support individual 

development planning, 75 percent of CSP 

potential successors have an active plan (i.e., 

completion of one activity every six months).

 In February 2016, we introduced a 

streamlined process for EAS leadership 

development open season for area and 

district employees. Program eligibility was 

expanded to EAS-16 employees to allow 

supervisors to begin development for 

managerial-level positions in the district. A 

two-year strategic plan has been established 

for each area and district, which includes 

structured opportunities to enhance the 

growth and development of EAS Leadership 

Development (ELD) program participants.

 The ELD program grew by 4,934 new 

participants. To support individual 
42 United States Postal Service — FY2016 Annual Report to Congress 

development planning, 63 percent of ELD 

program participants have an active plan (i.e., 

completion of one activity every six months). 

Once the pending manager review and 

approval occurs, there will be an additional 

27 percent of ELD program participants that 

have active individual development plans.

 Ten leadership development programs were 

offered to both headquarters and field EAS 

high-potential employees to develop our 

bench strength. In addition, there were six 

programs for executive-level employees. 

Leadership programs continue to focus on 

critical business challenges and maximizing 

the creativity, innovation and strategic 

thinking of our high-potential employees to 

recommend new solutions and strategies.

To prepare employees for career advancement, 

learning opportunities are available for officers, 

senior executives, executives, managers and 

supervisors. The following list summarizes 

participants by program:

Leadership Programs Participants

Advanced Leadership Program 54

Executive Foundations 51

Executive Leadership 96

Managerial Leadership Program 186

New Supervisor Program 2,568

Managerial Essentials for Field Leadership 873

Postmaster Essentials 1,846

Data Source: EDW Learning Management System and Rosters for Leadership 

Programs

A total of 15 officers and high-potential 

executives have completed the Senior Executive 

Assessment and Development Center program, 

designed to accelerate development for senior 

executive-level positions. Eighty percent of 

participants in the program have an active 

executive development plan.

Impactful Training Programs – In FY2016, the 

Postal Service invested in pilot training programs 

for new employees in field operations. These 

onboarding programs serve two purposes — 

prepare new employees to be job ready and 

improve retention.

 Field Onboarding. A redesigned orientation 

for newly hired letter carriers, custodians, mail 

handlers and other craft employees. Based 

on a root cause analysis, the orientation 

addressed 19 elements of turnover, from 

training to feeling welcomed and supported 

by supervisors. Piloted in the Northern Virginia 

District during peak mailing season, the 

integrated program resulted in productive 

employees and decreased turnover by 22 

percent. The Postal Service is launching the 

program nationwide at the start of FY2017.

 Holiday Employee Orientation. A redesigned 

one-day orientation for newly hired temporary 

employees who work three pay periods 

during peak season. The Postal Service is 

launching “train the trainer” in early FY2017 

and plans to deploy the program nationwide 

to support an anticipated hiring of more than 

37,000 employees.

 Assistant Rural Carrier. Program for a 

new class of carriers who primarily deliver 

packages Sundays and holidays. Leveraging 

content from the Field Onboarding program, 

the Assistant Rural Carrier program contains 

an accelerated self-study, new hire orientation 

and a condensed, hands-on academy 

focused on package delivery. The Postal 

Service is launching the program in early 

FY2017.

Functional and technical skills were other areas 

of focus for pilot training programs in FY2016. 

Small Package Sorting System and Vehicle 

Maintenance Fleet programs include essential 

machinery and maintenance training to keep 

the mail moving efficiently. In addition, the Postal 

Service piloted a blended learning program 

called Respectful Communications targeted at 

EAS and PCES. Its goal is to increase effective 

communication in the workplace and improve 

work environments. The Postal Service will offer 

the course nationwide at the start of FY2017.
United States Postal Service — FY2016 Annual Report to Congress 43

Protecting Employees’ Information – The Postal 

Service made significant progress in FY2016 to 

improve its ability to defend against advanced 

threats and cyber intrusions. Over the next few 

years, the Postal Service will continue making 

major investments to enhance its defense 

capabilities and ensure the security of its data 

assets. Protecting the privacy of customer, 

employee, supplier and corporate information 

has been - and will always be - a priority for the 

Postal Service.

In FY2016, the Postal Service focused on 

building comprehensive cybersecurity capabilities 

through technology, people and processes. 

These capabilities included defending against 

threats, monitoring systems for possible 

unauthorized access and eradicating intruders. 

Moving forward, the Postal Service will enhance 

its cyber security infrastructure by continuing to 

invest in the development and maintenance of a 

robust information security organization.

CyberSafe at USPS – In FY2016, the Postal 

Service’s awareness and training initiative 

continued to foster a cybersecurity culture 

among postal community members through 

monthly awareness campaigns, annual training 

courses and online resources. Efforts increased 

both internally and externally to provide our 

employees, suppliers and customers with the 

knowledge and skills needed to protect critical 

USPS information.

In FY2016, the CyberSafe at USPS initiative 

deployed 12 themed, monthly awareness 

campaigns to our employees and suppliers 

that included numerous articles on information 

security topics such as password security, 

insider threats, safe social media use, how 

to avoid phishing attempts, how to safeguard 

mobile devices and how to protect systems from 

malware. The initiative managed two internal 

websites, providing employees with guidance 

on how to perform key information security 

processes associated with their job roles. A 

customer-facing CyberSafe at USPS website 

launched on Sept. 30, 2016, with the goal of 

providing customers with the cybersecurity 

knowledge to protect individuals, families and 

small businesses. The Postal Service also 

continues its strategic partnership with the 

Department of Homeland Security’s “Stop. Think. 

Connect.” campaign, further demonstrating 

our commitment to serving as a leader in 

cybersecurity among government organizations.

In addition to awareness activities in FY2016, 

CyberSafe at USPS continued organizationwide training efforts. The initiative re-released its 

cornerstone training, CyberSafe 101: Password 

and Phishing, and launched CyberSafe 201: 

Data Protection to USPS employees in January 

2016. CyberSafe 101 received a 99 percent 

completion rate from its 200,000 enrolled 

USPS employees, as did CyberSafe 201 from 

its 55,000 enrolled employees. The initiative 

developed two additional web-based training 

courses in FY2016 that focused on computer 

workstation safety and protecting systems and 

devices from malware. These will be released to 

USPS employees and suppliers in FY2017. The 

CyberSafe at USPS training strategy focuses 

on providing USPS employees and suppliers 

with the knowledge and skills to perform their 

job functions while protecting USPS information 

assets.

The CyberSafe at USPS initiative will continue 

its efforts to improve the information security 

of consumers and businesses that rely on the 

Postal Service. In pursuit of this goal, the initiative 

will expand to include a role-based training 

curriculum for those who have access to the 

USPS network, increase awareness messaging 

and training for suppliers and customers and 

continue to bolster customer-facing online 

resources.
44 United States Postal Service — FY2016 Annual Report to Congress 

Keeping Postal Employees Safe and 

Secure

The Postal Service values our employees, and 

keeping them safe is a top priority. Members of 

the Postal Inspection Service work closely with 

our managers in the field to develop prevention 

measures and provide guidance to employees 

on strategies to improve their safety while on the 

job. These measures include:

 Training employees in risk-avoidance 

practices at USPS-sponsored events and 

engaging employees through personal 

interactions in their workplace.

 Developing and reviewing security policies 

and ensuring local compliance.

 Supporting the Postal Service’s zero tolerance 

policy for workplace violence.

 Monitoring our facilities 24/7 through the 

National Law Enforcement Communication 

Center.

 Investigating reports of threats and assaults 

related to postal employees.

 Coordinating state and local law enforcement 

resources to investigate and solve crimes 

committed against our employees.

On a more targeted level, the Postal Inspection 

Service created an employee security campaign 

called “Deliver Yourself Home - The Safe and 

Secure Campaign.” The program is separated 

into four parts that are delivered by Postal 

Inspectors to different target audiences.

 Letter Carrier Safety provides carriers with 

robbery and assault prevention tips.

 Workplace Violence focuses on employeeon-employee violence and provides tips 

on handling assaults and threats in the 

workplace.

 General Security focuses on employee safety 

inside a facility.

 Active Shooter focuses on options available 

to an employee in the event of an active 

shooter incident.

Managing the Changing Face of our 

Organization

Many factors impact our employees, from 

operations-related changes to the challenges of 

managing multiple generations in the workplace. 

As our employee population transforms, we’ll 

continue to implement employee-centered 

Human Resources programs that focus on 

addressing our changing workforce environment.

Shifts in the ratios of career to non-career 

employees reflect our efforts to contain costs 

and respond to the growing need for ondemand shipping, which requires a more flexible 

workforce. In FY2016, the Postal Service hired 

more than 130,000 non-career employees in all 

flexible workforce categories, including postal 

support employee (PSE), city carrier assistant 

(CCA), mail handler assistant (MHA), rural carrier 

associate (RCA), casual and Postmaster relief 

(PMR).

In order to recruit candidates for these critical 

positions during FY2016, the Postal Service had a 

presence at 157 career fairs. The diversity at these 

events was broad yet strategic and included, 

among others, African Americans, persons 

with disabilities, Hispanics, LGBT, veterans and 

women. We also participated in career events 

to recruit for targeted positions where there’s a 

major hiring need, such as operations industrial 

engineers (OIEs), CCAs, PSEs and MHAs. 

In addition to attending targeted career fairs, 

advertisement materials were developed to be 

used in a recruiting texting campaign, newspaper 

advertisements and bus advertisements. We 

also continued to enhance innovative strategies 

to develop and retain our workforce, including a 

monthly lunch and learn series, while exploring 

diversity and inclusion themes.
United States Postal Service — FY2016 Annual Report to Congress 45

The Postal Service career workforce has an 

average tenure of about 17 years of service and 

an average age of 53. Currently 33 percent of 

employees are eligible to retire. As our average 

age continues to rise, identifying successors 

will be critical to filling voids created by retiring 

employees. Furthermore, an aging workforce will 

increase the need for knowledge management 

and alternative career paths.

Diversity – During FY2016, the Diversity and 

Inclusion program maintained its prominence at 

the Postal Service. While diversity and inclusion 

have always been a shared value across the 

organization, strengthening support for an 

inclusive workplace is a focal point for the 

organization. To advance these efforts, Diversity 

and Inclusion implemented several initiatives 

during the year:

 Lunch and learn series. Held monthly, these 

sessions highlighted wellness, employee 

engagement, employee benefits and 

professional development.

 Multicultural Awareness Day. Developed 

a platform for employees to host exhibit 

booths, showcasing the pride of their 

culture, customs, values, etc. These cultural 

awareness days were hosted in eight districts 

this year.

 Executive Diversity Council (EDC). Revived 

the EDC, including a multi-tiered approach 

from the Postmaster General extending to 

district-level advisory councils. Extensive 

demographic data on our workforce has 

been reviewed. Subcommittees have been 

developed to analyze the data in detail and to 

develop target areas for the EDC to focus on 

in FY2017.

 Diversity and Inclusion summit. Development 

platform for area and district Diversity and 

Inclusion professionals. The headquarters 

diversity team has worked closely with area 

and district diversity teams to ensure that 

Management Directive 715 (MD 715) data 

is accurate and is being utilized to develop 

a diverse and inclusive workforce. (MD 715, 

issued by the Equal Employment Opportunity 

Commission, requires federal agencies to 

ensure employment decisions are free from 

discrimination.) 

 Diversity resources. In partnership with 

Learning and Development, training was 

developed to expand diversity efforts while 

addressing topics such as unconscious 

bias and generation, gender and cultural 

sensitivity. Other notable resources include 

monthly heritage resource kits and a quarterly 

book club designed to engage employees.

 In a cross-functional working group with 

Operations on retention, a tool was 

developed that will be utilized in the new field 

orientation program. The “Your Future in the 

USPS” guide will be presented to every new 

employee both career and non-career. The 

presentation is designed to increase the new 

employee awareness of long-term career 

benefits and to decrease turnover.

Equal Employment Opportunity – The Postal 

Service is committed to providing equal 

employment opportunity for all employees. This 

is a critical component in our efforts to recruit, 

develop and retain a diverse workforce. The 

Postal Service does not tolerate harassment of 

any type and holds managers responsible for 

preventing it.

The Postal Service provides high-quality and 

timely complaint processing in accordance with 

Equal Employment Opportunity Commission 

regulations. As of September 30, 2016, a total 

of 13,610 informal complaints were filed and 

timely addressed. For the same time period, 

4,131 formal complaints were filed and also 

timely addressed. The Postal Service utilizes 
46 United States Postal Service — FY2016 Annual Report to Congress 

interagency agreements to provide EEO services 

to 26 federal agencies including counseling 

and mediation services, investigations and final 

agency decisions.

During FY2016, the Postal Service continued its 

EEO training efforts in support of our commitment 

to prevent complaints and provide a work 

environment free of harassment. Two USPS areas 

were offered the eight-hour course, Addressing 

Workplace Harassment. Eighty human resources 

and labor relations managers received this training 

on understanding, investigating and preventing 

harassment in the workplace. Additionally, 130 

Inspection Service participants received training 

on workplace harassment during the annual 

national leadership meeting.

A mandatory course titled, Notification and 

Federal Employee Antidiscrimination and 

Retaliation Act (No FEAR Act), was made 

available to career and non-career employees. 

This course provides information on EEO rights 

and remedies under federal anti-discrimination 

laws and provides scenarios to aid employees 

in recognizing circumstances and behaviors 

that could give rise to unlawful harassment. 

Nationally, 615,429 employees have completed 

this course, as of September 30, 2016.

In collaboration with the Law Department and 

Field Labor Relations, EEO Compliance and 

Appeals conducted national training on nonbargaining employees’ disciplinary and adverse 

action appeals process. A total of 340 employees 

attended the various training sessions.

Disability Program – This program provides 

support for managers, supervisors and 

employees in understanding the reasonable 

accommodation process, and it promotes 

disability employment awareness and inclusion. 

This effort is managed at headquarters and 

includes disability specialists domiciled at each 

area office. Team members provide direction, 

education and consultative services to key 

reasonable accommodation decision makers, as 

well as Human Resources, Law Department and 

other Postal Service functions.

Disability Program teams also serve as subject 

matter expert contributors to policy guidance 

and service talks, as well as classroom and 

web-based training materials covering various 

disability-related topics.

In FY2016, the Disability Program team 

launched the first National Disability Employment 

Awareness Month online resource kit to 

commemorate the 25th anniversary of the 

enactment of the Americans with Disabilities Act. 

This resource kit includes overviews of disability 

employment policy, technology assistance 

for employees with disabilities and links to 

educational sites. The kit is readily available to 

employees on the Postal Service intranet.
United States Postal Service — FY2016 Annual Report to Congress 47

To ensure employees with disabilities enjoy equal 

opportunities to succeed in the workplace, the 

Disability Program team provides guidance to 

management and employees on assistive and 

adaptive technology solutions. The program 

funds and oversees all sign language interpreting 

services for installations across the country. 

As such, team members work closely with 

Purchasing and Supply Management, as well 

as our Video Remote Interpreting supplier, 

to provide the most effective communication 

accommodations to employees and job 

applicants who are deaf or hard of hearing.

Compensation and Benefits – In FY2016, 

non-bargaining employees, including officers 

and executives, received pay and/or bonuses 

under the Pay for Performance program, which 

is designed to provide financial incentives for 

meeting specific performance targets. Postal 

Service management has multiple systems 

in place to monitor employee performance. 

Employees set goals annually and individual 

performance is reviewed at mid-fiscal year and 

end of fiscal year. The Postal Service continues 

to actively monitor and control compensation 

and benefits expenditures, including health care 

costs for employees and retirees.

Executive Compensation: Total Compensation 

in Excess of Federal Executive Level 1 

Compensation ($203,700 in last full Calendar 

Year 2015). In Calendar Year 2015, salary 

includes one additional pay period of earnings 

due to a 27th payday which occurred on 

December 31, 2015.

Executive name CY2015 amount in excess of Level 1 

Compensation of the Executive 

Schedule (unaudited)

Drew T. Aliperto $30,245

Megan J. Brennan $78,622

Susan M. Brownell $7,639

Kevin A. Calamoneri $11,252

Robert Cintron $9,893

James P. Cochrane $56,331

Joshua D. Colin $24,817

Joseph Corbett $63,638

Guy J. Cottrell $13,227

Jo Ann Feindt $16,325

Dean J. Granholm $25,115

Linda M. Malone $8,231

Thomas J. Marshall $71,037

Maura A. McNerney $9,457

Pritha Mehra $1,655

Randy S. Miskanic $24,882

Julie S. Moore $12,425

Shaun E. Mossman $4,454

James A. Nemec $8,817

Edward F. Phelan, Jr. $16,635

Gary C. Reblin $4,305

Nancy L. Rettinhouse $17,799

William C. Rucker III $14,294

Tom A. Samra $7,639

Kristin A. Seaver $29,817

Kelly M. Sigmon $971

Jacqueline K. Strako $23,617

Ronald A. Stroman $70,306

Douglas A. Tulino $7,639

Richard P. Uluski $31,246

Giselle E. Valera $355

David E. Williams, Jr. $48,658

Jeffrey C. Williamson $56,331

Note: Provided in compliance with Title 39, Section 3686(d) which requires 

compensation in last full calendar year.
48 United States Postal Service — FY2016 Annual Report to Congress 

Everything we do at the Postal Service, from finetuning our networks to purchasing new vehicles 

to enhancing tracking and visibility, has impact 

beyond our organization. The mailing industry 

depends on the Postal Service. According to 

the 2015 EMA Mailing Industry Job Study, the 

mailing industry provides 6 percent of the nation’s 

jobs — 7.5 million — and contributes to the 

economy with $1.4 trillion in revenue, an increase 

of 9.5 percent from 2011. The study reports 

that 73 percent of mail industry jobs depend on 

the delivery infrastructure at which USPS is the 

center. Our efforts to ramp up our investments in 

optimizing our retail, delivery, network, digital and 

enterprise platforms are crucial to deliver worldclass service, improve efficiency and prepare our 

organization to meet future customer needs.

New Package Processing Technology

The Postal Service continues to invest in 

equipment and processes to efficiently handle 

the growth in e-commerce. To improve our 

handling of packages, the Postal Service 

recently installed 25 new Small Parcel Sortation 

Systems and expanded the capacity of existing 

Automated Packaged Processing Systems and 

the Automated Parcel and Bundle Sorter. We 

also installed a new sorter system, the High 

Throughput Parcel Sorter in our Denver plant. 

This machine has the highest capacity of any 

machine in the fleet and we plan to deploy 

similar machines in key locations in the coming 

years. Due to the increased size and variation 

of e-commerce mail, we are also deploying 

new Universal Sorting Systems to handle 

larger packages. We also have invested in new 

software and systems that share information 

across multiple systems allowing all packages to 

be sorted using the best information available, 

which reduces the need for manual handling 

and data entry. The Postal Service continues to 

invest in the research and development of new 

sortation machines and technologies to continue 

to expand the processing capacity and efficiency 

of the package network.

Full-Service Simplification and Promotion

Full-Service Intelligent Mail barcodes set the 

stage for achieving end-to-end visibility in the 

mailstream — and revolutionizing the way we 

do business with our commercial mailers. 

Building on existing technology, we’re moving 

away from a manual, paper-driven process of 

accepting and verifying commercial mailings 

to a digitized process with programs such 

as eInduction, Seamless Acceptance and 

payment modernization. This shift in business 

processes will provide mailers with payment 

flexibility, preparation simplicity, ease of entry and 

induction, multiple access points for account 

management and greater visibility into their 

mailing status and quality. As of September 

2016, 90.43 percent of all eligible Full-Service 

volume was being prepared as Full-Service.

Enhanced Tracking and Visibility

Package tracking is one of the most important 

customer touch points for the Postal Service. 

Nearly 70 percent of all visitors to usps.com 

come to track a package, and a similar 

proportion of call volume to our Customer Care 

Center revolves around package status. The 

Postal Service is committed to improving the 

package tracking experience for our customers 

and is enhancing the language, design and 

functionality of usps.com, My USPS and our 

mobile interface to provide a truly world-class 

platform.

In addition to improving the user experience, 

we’re also developing innovative tools and 

technologies to improve the visibility into and 

performance of our shipping and mailing 

solutions. Collectively, these improvements 

will benefit the Postal Service, the mailing and 

shipping community and everyday consumers.

Internal Service Performance Measurement 

Sampling – In FY2016, the Postal Service 

implemented the internal Service Performance 

Measurement (SPM) sampling component 

of Informed Visibility. USPS employees use 

Investing in 

Future Platforms
United States Postal Service — FY2016 Annual Report to Congress 49

handheld scanners to scan live mailpieces at 

randomly selected collection and delivery points, 

reducing reliance on external vendor support 

for service performance measurement and 

providing valuable insight into the first and last 

mile. In FY2016, we enhanced the program by 

providing reports and tools to help monitor scan 

compliance and manage service performance. 

We reported results from the internal SPM 

system to the Postal Regulatory Commission for 

the second and third quarters of FY2016. We 

continue to run the new system in parallel with 

the legacy systems.

Bundle Visibility – Bundle Visibility was rolled out 

nationwide in 2016 and will provide a transparent 

and consistent view into the mailstream. Bundle 

Visibility assists in tracking mail volume as it 

travels through the Postal Service processing 

and delivery network. The business and 

operational intelligence created is of great benefit 

to the Postal Service and is a necessity to 

controlling costs and implementing operational 

efficiencies in mail processing and delivery.

Transition to the Intelligent Mail Barcode – 

Conversion from older barcode formats to the 

Intelligent Mail barcode (IMb) set the foundation 

for mailers to participate in the Full-Service 

Intelligent Mail option. Unique barcoding coupled 

with data reporting requirements of the FullService program provide the Postal Service with 

100 percent visibility into the mailstream. Using 

Full-Service IMb information, a suite of service 

performance diagnostic tools was developed for 

use by field managers to analyze and improve 

service performance. These tools provide field 

managers with timely and meaningful information 

on potential service impacts, allowing corrective 

action to be taken to eliminate potential service 

failures.

The ability to see diagnostic data supports 

efforts to improve mail processing. For example, 

field managers are able to measure and reduce 

cycle time to consistently meet service targets. 

In addition, through container and individual 

mailpiece scans, field managers gain visibility into 

the elapsed time between each operational step 

in the process. As a result, incorrect mail flows 

and mishandlings are identified and corrected.

In FY2016, the volume of mail in measurement 

grew by 21 percent compared to FY2015. This 

was accomplished through enhanced business 

logic and improvement in scan compliance. 

Several new enhancements were added to the 

service performance diagnostics tool which 

provides greater operational visibility to field 

managers. These enhancements give new 

insight on service issues, enabling the field to 

systematically identify the root cause of top 

impacts.

Diagnostic reports allow mailers to uncover 

mail or documentation issues, which, when 

resolved, facilitate service improvements for their 

mail. Through the Full-Service option, mailers 

have access to the lowest automation rates, 

address correction for Full-Service mailpieces 

and visibility into their own mailings. The IMb 

planning tool, available on RIBBS, shows mailers, 

by induction facility, how many days it takes to 

accept, process and deliver their mail. It also 

explains service variance, allowing mailers to 

track on-time delivery performance and see the 

elapsed duration (in hours) between entry time 

and the first automated scan. Mailers use this 

IMb information to better manage their customer 

expectations about when the mail should be 

delivered and make informed marketing, financial 

and operational decisions.

Full-Service adoption increased in FY2016. 

Out of the 90 percent of IMb volume potentially 

eligible for participation in Full-Service, 90.43 

percent was Full-Service as of September 2016 

compared with 88.22 percent in September 

2015. Between September 2015 and 2016, 

among the major mail products, First-Class flats 

experienced the highest increase in adoption 

rate (5 percent), from 72 percent to 77 percent. 

Full-Service adoption continues to be the highest 

for Presorted First-Class Mail letters/cards, 
50 United States Postal Service — FY2016 Annual Report to Congress 

increasing by 2 percent, from 91 percent to 

93 percent. Full-Service Standard Mail letters 

increased by 3 percent, from 88 percent to 91 

percent. Full-Service Periodicals increased by 1 

percent, from 84 percent to 85 percent.

Through the use of service performance 

diagnostics tools, USPS continues to improve 

processes and reduce variance on service. The 

FY2016 commercial mail scores and the oneday service variance scores are as follows:

 Presort First-Class Mail overnight ended 

the fiscal year at 96.16 percent, with mail 

delivered at 99.10 percent within one day of 

the service standard;

 Presort First-Class Mail 2-Day ended the 

fiscal year at 95.05 percent, with mail 

delivered at 98.65 percent within one day of 

the service standard;

 Presort First-Class Mail 3-5 Day ended 

the fiscal year at 91.68 percent, with mail 

delivered at 97.65 percent within one day of 

the service standard;

 Standard Mail Destination Entry ended 

the fiscal year at 92.33 percent, with mail 

delivered at 97.38 percent within one day of 

the service standard;

 Standard Mail End-to-End ended the fiscal 

year at 65.92 percent, with mail delivered at 

79.35 percent within one day of the service 

standard; and

 Periodicals ended the fiscal year at 80.07 

percent, with mail delivered at 90.66 percent 

within one day of the service standard.

Creating Operational Efficiencies

From acceptance to delivery, we’re focused 

on enhancing our operational performance and 

increasing customer value. At the same time, 

we’re preparing to meet future customer needs.

Total Factor Productivity (TFP) – TFP is an index 

that measures how efficiently the Postal Service 

uses resources (inputs) to handle all aspects 

of our workload. An increase in the TFP index 

indicates that the ratio of work being completed 

is increasing compared to the resources used 

and that the Postal Service is operating more 

efficiently. Workload consists of three primary 

components: delivery points, mail volume 

weighted by product type and miscellaneous 

Total Factor Productivity 

(Cumulative improvements compared to 1972 baseline) 

17

18

19

20

21

22

23

24

25

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

19.6%

19.0%

18.0%

20.1%

21.4%

22.4%

24.2%

24.6% 24.6% 24.4%

Note: Prior year results are updated based on most current data. All years shown are fiscal years. 
United States Postal Service — FY2016 Annual Report to Congress 51

Real Estate Inventory (see pages 54)

(in actual units indicated, unaudited)

Real estate inventory FY2016 FY2015 FY2014 FY2013

Owned properties 8,484 8,524 8,583 8,598

Owned interior square feet 192,521,396 194,220,092 195,617,292 196,956,774

Leased properties 23,214 23,314 23,649 23,814

Leased interior square feet 78,735,195 78,144,453 77,838,427 79,045,620

GSA/other government properties 285 286 296 297

GSA/other government interior square feet 1,885,956 1,902,726 2,001,667 2,005,330

Real Estate Inventory Actions (see pages 54)

(in actual units indicated, unaudited)

Inventory actions FY2016 FY2015 FY2014 FY2013

Lease actions (alternate quarters, new leases and renewals) 5,050 6,206 5,282 3,487

Property disposals1 27 16 30 44

New construction (AQ, NCL, NCO and expansion)2 52 22 70 29

Repair and alteration projects (expense) 53,466 51,584 46,961 45,040

Repair and alteration expense totals $ 245,000,000 $ 215,000,000 $ 159,000,000 $ 156,000,000

Repair and alteration projects (capital) 5,102 6,981 6,431 4,178

Repair and alteration capital totals $ 314,000,000 $ 347,000,000 $ 226,000,000 $ 195,000,000

1

Total partial and complete property sales (does not include non-property sales such as right-of-ways/easements, sale of rights, defaults, installment payments, 

etc.).

2

Includes the build-out of pre-existing non-postal spaces (Alternate Quarters [AQ]), the new construction of leased (NCL) or owned (NCO) space and the expansion of postal-owned space (Expansion).

Postal Vehicle Inventory (see page 52)

(in actual units indicated, unaudited)

Vehicle type FY2016 FY2015 FY2014 FY2013

Delivery and collection (1⁄2–21⁄2 tons) 203,853 193,489 189,750 190,104

Mail transport (tractors and trailers) 5,511 5,620 5,751 5,850

Mail transport (3–9 tons) 2,100 2,112 2,133 2,139

Administrative and other 6,357 6,414 6,249 6,449

Service (maintenance) 7,191 4,565 4,599 4,613

Inspection Service and law enforcement 2,884 2,733 2,782 2,529

Total 227,896 214,933 211,264 211,684

Number of Routes, by Type of Delivery (see page 52)

(in actual units indicated, unaudited)

Route FY2016 FY2015 FY2014 FY2013

City 144,571 143,051 141,271 142,073

Rural 74,724 73,818 73,166 73,089

Highway contract route 9,809 9,908 9,928 9,990

Total 229,104 226,777 224,365 225,152
52 United States Postal Service — FY2016 Annual Report to Congress 

output (e.g., passports). Resource usage is based 

on the constant dollar amounts (i.e., the costs 

adjusted for changes in prices) of the labor, capital 

and materials used by the Postal Service.

The chart on page 50 starts with the cumulative 

TFP improvement from 1972 to 2007 and 

then reflects the cumulative score each year 

since then. TFP declined slightly in FY2016. 

Labor productivity was positive as the weighted 

mail volume growth was higher than the labor 

resources used, however this was outweighed 

by the additional transportation used to improve 

service.

Delivery Optimization – With the exception of 

packages, mail volume continues to decline 

over time while the number of addresses we 

deliver to steadily increases. Because of this, 

there’s a need to continuously revamp the 

delivery infrastructure through route reviews and 

adjustments, focus on increasing centralized 

delivery and use technology to leverage 

comprehensive delivery applications. This 

includes the delivery management system and 

volume arrival profile. Local Operations Centers 

(LOCs) were deployed in every area and district 

office to improve delivery and customer service 

by providing real-time insight into street delivery 

operations. These LOCs are being used to 

monitor and mitigate daily delivery unit conditions 

with possible customer service impacts.

In the past year, the Postal Service completed 

the deployment of over 276,000 Mobile Delivery 

Devices (MDDs) to 24,666 delivery units in 

19,472 postal facilities. The MDD with its 

innovative functionalities improves the Postal 

Service’s ability to provide customers with realtime scanning and predictive delivery. MDD 

deployment provides new functionalities to all of 

USPS delivery routes including 144,000-plus city 

routes and over 74,000 rural routes.

Mode Conversions – The Postal Service 

continues to provide consistent and reliable 

service in an efficient manner by converting 

deliveries to a more centralized mode. Mode 

conversions also enable the Postal Service 

to reduce transportation costs. As a result of 

our communication and outreach efforts with 

our customers, in FY2016, the Postal Service 

achieved a total of 98,439 voluntary conversions: 

74,227 residential conversions and 24,212 

business conversions.

Route Evaluations and Adjustments – Field 

management continues to inspect, evaluate 

and adjust delivery routes as necessary to 

control costs while improving service. During 

FY2016, the total number of routes increased by 

2,327 from 226,777 to 229,104, while growing 

1,142,352 additional delivery points.

Investing in the Delivery Fleet – In FY2016, 

the Postal Service invested $221.7 million in 

our delivery fleet. This includes 3,339 RAM 

ProMaster extended capacity delivery vehicles, 

purchased for $105.4 million to replace our 

aging fleet of 2006 minivans. We also purchased 

2,446 service vehicles for $76.9 million 

replacing our vehicle maintenance vehicles with 

a mean age of 15.7 years. In addition, 1,688 

administrative vehicles will be purchased for 

$39.4 million to replace administrative vehicles 

with a mean age of 12 years.

Network and Transportation Optimization – In 

FY2016, the Postal Service continued its 

self-imposed deferment on consolidations to 

focus on continued improvements to service 

performance. While improving service, the 

Postal Service also aligned its inventory of 

processing equipment to reflect the continuing 

changes in public mailing habits. By focusing on 

improvements in machine utilization and reducing 

fixed overhead costs, the Postal Service is 

operating with 6.1 percent fewer letter sorting 

machines or Delivery Bar Code Sorters (DBCS) 

than last fiscal year. The Postal Service continues 

to repurpose available processing space to 

support the growth in package processing, 

without the need to invest in new facility assets. 
United States Postal Service — FY2016 Annual Report to Congress 53

The continued use of Lean Principles and 

analytical tools has also resulted in a more 

balanced transportation network, better aligning 

carrier capacities with processing realities. The 

result of these improvements can be seen in the 

record service performance of Priority Mail and 

Standard mail.

Lean Mail Processing (LMP) – Mail processing 

facilities and delivery units nationwide, continue 

to build on LMP principles. Sites nationwide 

are now focusing on Customer to Customer 

Value Stream for different product types. 

They are identifying pain points in the value 

stream and utilizing Lean Six Sigma tools, to 

improve operational efficiency and reduce 

cycle times. Utilizing these tools help reduce 

waste and create an organized workspace with 

standardized roles and responsibilities. LMP 

principles will continue to use key performance 

indicators to drive improvements in mail 

processing operations, which result in better 

service for our customers and better budget 

outcomes for USPS.

Air Cargo Optimization – During FY2016, there 

was a significant focus on improving our air 

network modeling capability and accuracy. New 

modeling technology was deployed consisting 

of multiple models, one focused on forecasting 

future air demand and one dedicated to 

allocating the demand across the various air 

networks. The new allocation model increases 

the opportunity to use lower cost carrier capacity 

by maximizing the allocation of air demand to 

the appropriate air network based on service 

standards and contract terms.

Ground Transportation Optimization – Highway 

transportation expenses for FY2016 were $3.8 

billion. This is an increase of 5 percent over 

FY2015. The increase resulted in large part due 

to package volume growth, strategically moving 

some lanes from Air-to-Surface, increase in 

rate per mile due to legislation in California as 

well as a nationwide shortage of drivers, and 

the expanded Peak Season ground network 

in FY2016 to handle package growth. These 

increased transportation costs were buffered 

by a reduction in fuel prices and our efficiency 

measures to remove redundant transportation 

from the network.

International Operations Optimization – The 

Postal Service continues to focus on improving 

customer service performance and reducing 

cost through increased visibility for international 

civilian, DOD (Military mail) and Department 

of State (DOS) volume using customs data to 

improve operational processes. In collaboration 

with DOD and DOS, the USPS has enabled 

enhanced customer visibility and tracking of Air/

Army Post Office (APO), Fleet Post Office (FPO) 

and Diplomatic Post Office (DPO) mailpieces 

being dispatched to/from select high-volume 

locations: Europe, Middle East and Asia. USPS 

also continues to leverage additional scan 

events on outbound international civilian items by 

integrating air carrier data and additional foreign 

post scan events into its tracking platforms. 

USPS is piloting the “Green Lane” initiative at 

JFK Airport to expedite the customs processing 

of inbound packages using electronic customs 

declaration data so “targeted” volume is sent 

to customs and the balance of the volume 

“by-passes” customs and gets to the recipient 

sooner. Based on the results of the JFK pilot, 

the plan is to select an additional pilot location 

in early FY2017. The double-digit growth of 

inbound international e-commerce volume over 

the last four years is requiring a more aggressive 

strategy for the expansion of foreign post 

partners providing Advanced Electronic Data 

(AED) which will be the framework for future 

initiatives to expedite inbound international civilian 

and military sorting within the domestic network.
54 United States Postal Service — FY2016 Annual Report to Congress 

Facilities Management

Our facilities are the primary place of interaction 

with many of our customers. We’re focused on 

developing innovative solutions to improve that 

customer experience and provide world-class 

service. Our real estate portfolio of approximately 

32,000 buildings includes 273 million square feet 

of interior space. It’s vital that we manage and 

adapt our building portfolio to align with customer 

and organizational needs at a sustainable cost. 

The Facilities team provides appropriate facilities 

for Postal Service needs to ensure proper 

stewardship and management of real estate 

inventory and related resources.

Facilities performs strategic planning through 

“node studies” analyzing the processing, delivery 

and retail use of existing facilities, and current 

and future local service needs. This identifies 

communities that can benefit from additional or 

modified capacity and locations where capacity 

exceeds the needs of the Postal Service, 

representing potential opportunities for savings 

and revenue generation. The 64 node studies 

approved in FY2016 represent $116.5 million in 

net present value in potential savings.

We executed over 5,000 leases in FY2016, 

ensuring USPS operations could continue at 

these properties. Despite increases in lease 

rates driven by the recovering economy, lease 

rates were negotiated at 10.1 percent below 

market value aggregately. The sale and leasing of 

excess rental real property generated 

$285.7 million in gross receipts. This trend 

is slowing as economic conditions shift and 

opportunities decrease.

In FY2016, the Facilities team implemented 

portfolio modification projects ranging 

from emergency replacements to planned 

infrastructure changes supporting organizational 

and network initiatives. Facilities completed 52 

new construction projects and 42 projects to 

consolidate or repurpose space within existing 

owned or leased buildings. These projects 

enable the Postal Service to provide enhanced 

services, maintain or restore operations after 

catastrophic events, and combine multiple 

facilities into fewer or smaller locations when 

appropriate. It also allows us to take advantage 

of less costly space, sell large underutilized 

properties or move to smaller, more efficient 

space.

To meet the continual need to maintain our 

buildings, in FY2016, we completed over 58,500 

repair, alteration and replacement projects along 

with 387 upgrades for the Premier Post Office 

program. We also finished 182 upgrades to 

maintain customer access in locations impacted 

by POStPlan, the strategy to modify retail window 

hours to match customer use. These measures 

ensure safety, security and serviceability of Postal 

Service buildings as we maintain and right-size 

our network to provide a positive customer 

experience.

The current industry trend of consumer migration 

away from brick-and-mortar shopping to 

e-commerce, and the resultant growth in our 

package business, continue to impact our 

facilities portfolio management plan. However, 

the Facilities team continuously innovates and 

adapts the plan to address these marketplace 

developments.

Team Cleaning at USPS – As cleaning science 

and technology have evolved tremendously, 

our maintenance operations organization began 

researching and testing new custodial processes. 

The American Postal Workers Union and the 

Postal Service agreed on new team cleaning 

standards and nationwide implementation has 

been ongoing since June 2014.

Our employees and the environment continue 

to reap the rewards of team cleaning concepts 

that emphasize cleaning for health instead of 

just cleaning for appearance. New processes 

use a standard set of chemicals distributed in 

ultra-small collapsible packets designed for easy 

recycling.
United States Postal Service — FY2016 Annual Report to Congress 55

During FY2016, much of the Team Cleaning 

effort has been focused in the major Processing 

& Distribution Centers. The Postal Service has 

begun to implement this new process in the 

smaller retail units as well. Team cleaning has 

now been implemented at more than 200 sites 

since its inception and has achieved a total 

savings of $45 million.

Working Together with 

America’s Businesses

Our suppliers help us be successful in our 

mission of serving the American public. They 

provide equipment, materials and services 

that enable us to deliver superior products 

and services to our customers. Overseeing 

these relationships is our Supply Management 

organization, which supports key Postal Service 

programs by providing timely and lean solutions 

with its supply-chain partners. In FY2016, Supply 

Management supported many strategic initiatives 

including Network Optimization and World Class 

Package Platform activities.

As Supply Management works with our business 

partners to increase the efficiency of moving 

the mail, we’re equally focused on reducing 

the possibility of damaged and lost mail and 

improving the processes around handling 

such items. This effort, called Project ICE 

(Improve Customer Experience), includes multiorganizational project teams that work to identify 

and correct root causes for damaged and 

undeliverable mail.

In addition to our commitment to serving the 

American public, we’re also committed to 

implementing sustainable solutions. The Postal 

Service and its highway contract suppliers 

continue to increase the number of tractor-trailers 

that run on alternative fuels, which is part of the 

organization’s broader efforts to become more 

sustainable. In FY2015, Postal Service suppliers 

used 72 tractor-trailers that run on natural gas 

— up from 39 such vehicles one year earlier. 

In fiscal 2016, we converted an additional 

106 contract tractor-trailers to alternative fuels, 

bringing the total number of alternative fuel 

vehicles to 178. These increases more than 

doubled the number of annual miles operated by 

natural gas vehicles to 13.5 million miles.

Finally, while the United States accounts for 

45 percent of the global market in cross-border 

shopping, our offerings are limited. Supply 

Management and Global Business are working 

together to bring the Global e-commerce 

Marketplace on line, positioning the Postal 

Service to become more competitive in providing 

these services.

Supplier Diversity – As an essential part of 

our procurement strategy, supplier diversity 

continues to strengthen the Postal Service’s 

competitiveness in the marketplace. Supplier 

diversity is embedded into the routine principles 

and practices that govern the procurement 

process. This helps ensure all suppliers have 

access to this process and an opportunity to 

provide value-added products and services the 

Postal Service needs to maintain and increase 

customer satisfaction and decrease overall 

costs. In FY2016, our contract commitments 

exceeded $2.9 billion with small businesses, 

$379 million with minority businesses and 

$651 million with women-owned businesses.

During the year, the Supplier Diversity group 

reached over 25,000 potential suppliers by 

participating in congressional, federal and 

industry events and conferences focused on 

supplier diversity and development across the 

nation. Participation included promoting supplier 

registration, delivering workshops, conducting 

one-on-one business meetings and providing 

key information on doing business with the 

Postal Service.

Supplier Diversity maintains memberships 

with premier multicultural business and trade 
56 United States Postal Service — FY2016 Annual Report to Congress 

associations, such as the National Minority 

Supplier Development Council, Women’s 

Business Enterprise National Council, U.S. 

Hispanic Chamber of Commerce, U.S. Pan 

Asian American Chamber of Commerce and 

the National Congress of American Indians with 

a combined total of over 40,000 members. It 

also supports National Veterans Small Business 

Engagement activities and the Small Business 

Administration and is a member of the Office of 

Small and Disadvantaged Business Utilization.

Recently, our work has been recognized by 

leading publications and organizations including 

FederalNewsRadio.com, DiversityPlus magazine 

and DiversityBusiness.com, which named the 

Postal Service the country’s top government 

agency for multicultural business opportunities. 

In addition, the Supplier Diversity program has 

been recognized by The Presidents’ Roundtable 

and the PRT Reach Foundation and the 

U.S. Hispanic Chamber of Commerce for its 

significant contributions to supplier diversity and 

as a supporter of the Hispanic community.

Accelerating the Pace of 

Innovation

Innovation waits for no one. While the Postal 

Service always has been a leader in embracing 

new technologies, we recognize the pace of 

change is speeding up — and we’re keeping 

pace. In fact, we’re accelerating our testing of 

new approaches to better serve our customers’ 

changing needs and bring mail much more 

deeply into their digital lives. We understand that 

it can be difficult to envision the prospects of 

mail with so many tools to utilize. We developed 

IRRESISTIBLE, a website and catalog that 

provides physical examples of printing techniques 

and emerging technologies that mailers can 

incorporate into their own campaigns.

In the pages of the IRRESISTIBLE book, 

customers can learn about textures, dynamic 

inks, augmented reality, QR codes and unique 

folds. All these facets culminate in a unique 

experience that stays with the recipient far after 

the lifespan of the mailpiece. On our awardwinning IRRESISTIBLE website, there are even 

more examples of our applications, as well as 

case studies. We’re adding more advertising to 

mail in a way that is both effective for the mailer, 

but also more enjoyable for the recipient.

To keep up with increased e-commerce 

purchases and deliveries, the Postal Service 

has developed the next generation mailbox, a 

larger receptacle to fit today’s delivery needs. 

The mailbox improves the customer experience 

as it conveniently holds the majority of mail, so 

more packages get delivered to the box. Various 

models are available online for sale with big box 

retailers.

Our Mailing Business – The beauty of mail is that 

it’s tangible and tactile. We’re enhancing this 

distinct experience with digital facets to expand 

the possibilities of print. We want to drive our 

clients’ customers to engage with brands and 

purchase products via seamless experiences 

that break down the barrier between physical 

and digital. The future of mail depends on this 

merging of the physical and the digital. We drive 

this merge by incenting mailers to invest in new 

ways to use mail and to engage their customers 

through annual promotions.

Stamp Program – The Postal Service continues 

to issue postage stamps as a convenient and 

secure payment method for consumers.

The “Forever” stamp concept was first introduced 

in April 2007 with a stamp featuring the image of 

the Liberty Bell and was designed for consumers’ 

ease of use during price changes. In 2011, all 

domestic First-Class 1-ounce stamps became 

Forever stamps with the exception of stamps in 

coils of 3,000 and 10,000, and those formats 

were added to the Forever program in 2014. 

Forever stamps sell for the basic First-Class Mail 

1-ounce price in effect at the time of sale.
United States Postal Service — FY2016 Annual Report to Congress 57

In FY2016, the “Forever” stamp concept 

advanced one step further and extended this 

convenience to customers needing stamps for 

mailing items weighing more than 1 ounce as 

well as for postcards and bulky or odd-sized 

envelopes that require hand sorting. The new 

“additional-ounce” Forever stamps will always 

be equal in value to the applicable price for 

the price category printed on them at the time 

of use. Customers purchasing these Forever 

stamps can easily determine their use by the 

descriptions on the stamps: ADDITIONAL 

OUNCE, POSTCARD, NON-MACHINABLE 

SURCHARGE, TWO OUNCE and THREE 

OUNCE.

A Global Forever stamp was introduced in 2013, 

offering a single price for any First-Class Mail 

International 1-ounce letter to any country in the 

world. Global Forever stamps may also be used 

to mail a letter up to 2 ounces to Canada.

In FY2016, 42 new stamps were issued with 

135 designs recognizing American history, 

culture, people and achievements. Some of 

the stamps issued — as part of the Postal 

Service’s annual stamp program — paid tribute 

to individuals diverse as Richard Allen, Jaime 

Escalante, Shirley Temple, Sarah Vaughan and 

Henry James. Other stamps issued included: 

Lunar New Year: Year of the Monkey, Botanical 

Art, Pets, Indiana Statehood, Star Trek, Wonder 

Woman, Pickup Trucks, Jack-o’-lanterns, Soda 

Fountain Favorites and Songbirds in Snow; 

and stamps released to support the once in a 

decade World Stamp NY 2016 included: World 

Stamp Show Folio, Repeal of the Stamp Act, 

Classics Forever, National Parks, Views of Our 

Planets, Pluto Explored, The Service Cross 

Medals and Colorful Celebrations; and all new 

holiday celebrations stamps included Holiday 

Windows, Diwali, Hanukkah, Kwanzaa, EID, 

Nativity, and Florentine Madonna and Child.

Of the stamp issuances, National Parks proved 

to be the biggest selling commemorative stamp 

issuance for FY2016 with over 27 million stamps 

sold. This was followed by our Black Heritage

stamp honoring Richard Allen, Views of Our 

Planets, Legends of Hollywood’s Shirley Temple

and our Music Icons’ Sarah Vaughan, all of which 

sold over 10 million stamps each. Flags were by 

far our most purchased stamps with 1.9 billion 

stamps sold, followed by stamps featuring 

flowers and holiday themes, with each sold over 

250 million each.

The Postal Service also is authorized by 

Congress to issue semi-postal stamps that are 

used to help raise funds for designated causes. 

The price of a semi-postal stamp pays for the 

First-Class Mail single-piece postage price in 

effect at the time of purchase and reasonable 

reimbursement of costs to the Postal Service, 

plus an additional charge. This additional charge 

(or “differential”) helps fund causes designated by 

Congress, with money going to a congressionally 

selected executive agency or agencies. Four 

semi-postal stamps have been issued since the 

program began in 1998 resulting in the donation 

of $98.9 ($98.1+$0.5+$0.3) million. The two 

semi-postal stamps on sale in FY2016 were the 

Breast Cancer Research and Save Vanishing 

Species stamps.

The Breast Cancer Research stamp 

(1998-current) generated proceeds of 

approximately $500,000 in FY2016 and 

$83 million since it was first issued in 1998. By 

law, 70 percent of the amount raised is given to 

the National Institutes of Health and 30 percent 

is given to the Medical Research Program at the 

Department of Defense.

The Save Vanishing Species stamp (September 

2011-current) generated proceeds of 

approximately $300,000 in FY2016 and 

$3.6 million in total since its 2011 release.

Stamp Services recognizes the importance 

of innovation and technology and has begun 

bridging the gap between digital and physical. 

This resulted in the development and release 
58 United States Postal Service — FY2016 Annual Report to Congress 

of the first official USPS StampApp. This new 

app leverages digital technology to include both 

a digital reference library — the U.S. Stamp 

archive as well as an interactive platform for 

users to browse the fully illustrated Postal Service 

stamp library. The StampApp allows users to 

manage their own personal collections, create 

and edit their stamp wish lists and share their 

collections with others. This mobile app is unique 

because it includes a pre-populated reference 

library of United States postage stamps.

In addition, we introduced the eBook edition 

of the popular Postal Service Guide to U.S. 

Stamps. This is the first-ever eGuide to U.S. 

Stamps accessible on your smartphone or 

tablet. The eGuide to U.S. Stamps includes 

all the contents within the hard copy book that 

we publish annually — which was the 42nd 

edition this year. The eGuide brings the power 

and beauty of stamp art to the screens of 

laptops, tablets and phones, where collectors 

can experience the majesty of U.S. stamps as 

never before. Along with stunning high-resolution 

imagery of the art of the Postal Service archive, 

from the Postmasters Provisionals of 1845 

through the final issuance of 2015.

For more information about the Postal Service 

stamp program, visit www.usps.com/stamps.

Stamps to Go and Stamps by Mail – It’s never 

been easier to get stamps, whether at a Post 

Office, online at usps.com or at one of our retail 

partner locations. In FY2016, the Postal Service 

provided customers with access to stamps at 

more than 64,250 retail partner locations through 

the Stamps to Go program. Various marketing 

efforts are used to remind customers that U.S. 

postage is available through more than 600 

partner companies. These efforts sustain stamp 

sales while expanding our retail footprint. The 

Contract Postal Unit program also continued 

to grow revenue and expand the reach of our 

stamp program through strategic partnerships. 

The Stamps to Go program made over $1 

billion in stamp inventory available to customers 

through our retail partner locations in FY2016 

and is one of our most cost-effective channels.

Customers, of course, can always take 

advantage of our Stamps by Mail program. 

Stamps are delivered through the U.S. Mail 

without delivery or handling charges. Our retail 

offices ordered more than 6.8 million brochures 

highlighting Stamps by Mail to circulate 

throughout their communities. This program 

remains popular with the elderly and disabled.

Promotions – The Postal Service encourages 

mailers to invest in new ways to use mail 

and engage their customers through annual 

promotions.

These promotions drive new business by 

encouraging companies to push the envelope on 

the way they deliver their direct mail messages. 

Over 33 billion mailpieces have been mailed 

through the USPS Promotions program since 

2009. In calendar year 2016, the Postal Service 

launched several promotions designed to help 

marketers engage their customers by using 

dynamic color print mobile technology as well as 

traditional and innovative mail techniques.  Earned Value Reply Mail (Apr. 1 to Jun. 

30, 2016) – This promotion is designed to 

encourage mailers to promote First-Class 

Mail as a primary reply mechanism for their 

customers and to keep Courtesy Reply 

Mail/Business Reply Mail envelopes in their 

outgoing mailpieces by providing a financial 

benefit when CRM/BRM envelopes are used. 

Mailers who register their mailer identification 

information and use eligible Intelligent Mail 

barcodes on their reply pieces will receive 

a postage credit for each mailpiece that’s 

returned to the mailer during the promotion 

period.

 Personalized Color Transpromo (Jul. 1 to Dec. 

31, 2016) – Since 2014, USPS has provided 

this promotion to encourage mailers of bills 

and statements to use color messaging in 
United States Postal Service — FY2016 Annual Report to Congress 59

order to create a greater connection to and 

response from consumers. This promotion 

provides an upfront 2 percent postage 

discount to mailers who use dynamic/variable 

color print for personalized transpromotional 

marketing messages on their bills and 

statements. This approach is intended to 

continue to grow the value of First-Class Mail 

and encourage mailers to invest in color print 

technology.

 Emerging and Advanced Technology/Video in 

Print (Mar. 1 to Aug. 31, 2016) – The Postal 

Service continues to encourage mailers to 

integrate direct mail with mobile technology 

and now with video/print technology. Mailers 

can earn an upfront 2 percent postage 

discount on mailpieces that include the use 

of standard near field communications, or an 

“enhanced” augmented reality experience 

(augmented reality superimposes digital 

images or content over a live image of a 

mailpiece.) These mobile-based technologies 

allow the recipient to engage in innovative 

digital experiences triggered from their 

mailpiece. New for this year is the inclusion of 

Video in Print to generate opportunities that 

leverage new video technologies incorporated 

with a printed mailpiece.

 Tactile, Sensory and Interactive Mailpiece 

Engagement (Mar. 1 to Aug. 31, 2016) – 

Tactile, sensory and interactive mailpieces 

were included in the Emerging and Advanced 

Technology promotion in 2015. Due to its 

popularity, this year includes a new promotion 

focused solely on these applications. 

Advancements in paper, ink and interactive 

mailpiece elements provide marketers 

exciting new ways to enhance customer 

engagement opportunities. The engagement 

can be achieved through the innovative 

use of specialty inks, sensory elements, 

textural papers and the use of folds or other 

dimensional elements that the recipient can 

interact with and manipulate on the mailpiece. 

This promotion provides mailers with the 

opportunity to earn an upfront 2 percent 

JULY AUG SEPT 

Earned Value 

Personalized Color Transpromo 

STANDARD MAIL® AND FIRST-CLASS MAIL

FIRST-CLASS MAIL® 

 

 Promotion Period (6 months) 

March 1 – August 31 

Promotion Period (3 months) 

April 1 – June 30 

Promotion Period (6 months) 

July 1 – December 31 

STANDARD MAIL

Emerging and Advanced Technology/Video In Print 

Registration 

February 15 –March 31 

Registration 

January 15 – August 31 

Registration 

May 15 - December 31 

Registration 

May 15 – Dec 31 

Promotion Period (6 months) 

July 1 – December 31 

Mobile Shopping 

Tactile, Sensory & Interactive Mailpiece Engagement 

 Promotion Period (6 months) 

March 1 – August 31 

Registration 

January 15 – August 31 

APRIL MAY JUNE OCT NOV DEC 

 2016 Promotion Calendar 

JAN FEB MARCH 
60 United States Postal Service — FY2016 Annual Report to Congress 

postage discount by incorporating these 

features.

 Mobile Shopping (Jul. 1 to Dec. 31, 2016) 

– This promotion provides mailers with the 

opportunity to earn an upfront 2 percent 

postage discount by integrating mobile 

technology with direct mail. Using technology 

platforms such as Quick Response Codes, 

Snap Tags, watermarks and other advanced 

technologies, the consumer is launched 

from the mailpiece into online shopping 

experiences. This year adds social media 

opportunities through “buy it now” features 

highlighted to support shopping during social 

media activities. This promotion encourages 

mailers to adopt technologies that create 

consumer excitement and highlight the 

connection between the mailpiece and the 

digital shopping experience. 

Every Door Direct Mail – Every Door Direct 

Mail service is an easy, cost-effective way for 

marketers to reach potential customers near 

their businesses. Using an online mapping 

tool available at usps.com, mailers can select 

individual postal routes for delivery to every 

household on those routes. They also can select 

demographic data in choosing routes. With 

EDDM Retail, customers can pay for and enter 

their mail at the retail counter using simplified 

mailing preparation. Customers may also 

choose to mail from a Business Mail Entry Unit 

(BMEU). Since its launch in April 2011, EDDM 

has generated over $2.2 billion in revenue and 

over 13 billion mailpieces from mailers across the 

country.

Market-Dominant Product Pricing and 

Classification – Our Mailing Services, which 

include First-Class Mail, Standard Mail, 

Periodicals and certain parcel services, account 

for approximately 74 percent of our annual 

operating revenues. Price increases for these 

services are generally subject to a price cap by 

class of mail based on the Consumer Price Index 

for All Urban Consumers (CPI-U). Our Board of 

Governors sets the prices, which are reviewed 

by the Postal Regulatory Commission. Prices for 

certain Mailing Services increased an average of 

1.9 percent in May 2015, 1.7 percent in January 

2014 and 2.6 percent in January 2013. Due to a 

very small CPI, there was not an overall CPI price 

increase in 2016.

Price Increases – In August 2016, the PRC 

approved price increases for First-Class Mail 

retail parcel prices for 1-, 2- and 3-ounce 

pieces. This price change was to address 

migrating volume from higher priced First-Class 

Package Services to lower priced First-Class 

Mail retail parcels that resulted from the rollback 

of exigent prices in April 2016.

Exigent Surcharge – In December 2013, the 

PRC ruled that the Postal Service could collect 

an exigent surcharge to recoup revenues lost 

due to the Great Recession’s impact on mail 

volume. The surcharge revenue is in addition to 

revenue that the Postal Service would generate 

solely from a price increase based on CPI-U. The 

PRC determined the value of this lost revenue to 

be $3.2 billion in incremental revenue, and 

$2.8 billion in contribution. The ruling also stated 

that when this revenue amount is reached the 

Postal Service must remove the surcharge from 

our prices.

As a result of the ruling, the Postal Service 

implemented a 4.3 percent temporary exigent 

surcharge on Mailing Services in January 2014. 

That same month, the Postal Service filed an 

appeal of the PRC ruling in Federal Court. In 

June of 2015, the Federal Appeals Court ruled 

in favor of the Postal Service’s appeal. They 

remanded the case back to the PRC to review 

the total amount of surcharge originally awarded. 

In their review, the PRC determined that the 

Postal Service was due an additional $1.4 billion 

in revenue. The new total incremental revenue 

target number for the exigent surcharge was 

$4.6 billion. On April 10, 2016, in compliance 
United States Postal Service — FY2016 Annual Report to Congress 61

with the PRC’s ruling, once $4.6 billion in 

surcharge revenue was collected, the Postal 

Service rolled back the exigent surcharge to the 

CPI prices approved in May 2015.

Our Shipping and Packages Business

As shipping and package volumes and revenues 

continue their impressive growth, the Postal 

Service has taken steps to simplify products, 

offer people more control over where, when 

and how they receive packages, and provide 

superior labeling, manifesting and payment 

solutions.

Priority Mail Pricing – The Postal Service 

increased Priority Mail prices 9.8 percent in 

FY2016, after three years of no net increase. 

This increase better aligned our offerings in 

the marketplace and improved contribution, 

while maintaining Priority Mail’s popularity 

with customers. Unlike others in the shipping 

industry, the Postal Service did not implement 

any new dimensional weight changes. When 

customers ship with Priority Mail, they get free 

insurance, expected delivery day and Flat Rate 

and Regional Rate packaging options. Priority 

Mail is one of the Postal Service’s most popular 

shipping products, helping to boost the Postal 

Service’s package volume and meet customers’ 

needs for convenience at competitive prices.

Dynamic Routing and Sunday Delivery – 

To continue meeting the needs of today’s 

consumers, the Postal Service increased 

package delivery from six days per week to 

include Sunday in select ZIP Codes. During 

FY2016, the Postal Service has increased 

Sunday delivered ZIPs from 8,287 to 9,369. 

All totaled, USPS delivered over 111 million 

packages on Sunday to homes, businesses and 

Post Office Boxes this year.

Package Pickup – We not only deliver to every 

address — we also will pick up packages 

from those same addresses. To improve 

convenience, more USPS shipping products 

now can be picked up from customers’ homes 

and offices through our free Package Pickup 

service. Customers go online to usps.com to 

request that their carriers pick up their packages 

during regular delivery the next business day. 

Additionally, we are now offering Ship from Store. 

Several major retailers now utilize the Postal 

Service to pick up their fulfillment orders from 

local stores for same or next day delivery. During 

FY2016, the Postal Service has collected and 

delivered approximately 1.7 million packages in 

this initiative.

Metro Post – The market test product, which 

was introduced in 2012 in San Francisco, 

enabled consumers to receive same-day delivery 

on packages ordered from participating retailers 

before 2 p.m. In FY2015, the Postal Service 

delivered nearly 162,000 Metro Post packages 

to consumers and businesses in the New York 

metro market.

The Postal Service ended the market test for 

Metro Post same-day delivery on Dec. 16, 2015. 

The market test duration was two years. Qualified 

customers were moved to a Negotiated Service 

Agreement. The new name of the service will be 

Priority Mail Metro Post Same Day.

Returns – In 2016, Parcel Return Service (PRS) 

customers were able to pick up their PRS 

volumes at 8,841 Return Delivery Units (RDUs). 

While this total represents a reduction in RDUs 

compared to the previous fiscal year, the Postal 

Service is in the process of expanding the 

number of RDUs based on recent requests from 

both existing and new PRS customers.

Parcel Lockers – We continue to better service 

the needs of our package receiving customers. 

In FY2016, we added 1,782 indoor parcel 

lockers to enable customers to easily pick up a 

package when they have PO Box delivery.
62 United States Postal Service — FY2016 Annual Report to Congress 

The Postal Service continues to test our outdoor 

keyless parcel locker, gopost, in the Northern 

Virginia and New York City areas. Gopost is a 

convenient way to receive and ship packages. 

Our gopost units are automated, secure, 

self-service parcel lockers that are placed in 

convenient locations, where customers can 

pick up or ship packages 24 hours a day, seven 

days a week at most locations. Customers 

who sign up for gopost receive user ID cards 

and PIN numbers which they can then use to 

access lockers and retrieve or send packages. In 

FY2016, the program added three new gopost 

locations in the New York City vicinity.

Other Products and Services

Passports – The Postal Service, in partnership 

with U.S. State Department Passport Services, 

makes it easy and convenient to apply for a 

passport. Postal Service employees accept 

more than 70 percent of first-time applications. 

Over 5,000 USPS facilities provide fee-based 

acceptance of first-time applications for a U.S. 

passport book or passport card. Over 4,500 

facilities provide both passport acceptance and 

photo services (for a fee). Total passport revenue 

for FY2016 from both applications and photos 

was in excess of $199 million, an increase of 

13.6 percent over the previous year.

A near-term goal is to improve contribution from 

passports by increasing efficiency, growing the 

number of applications accepted and improving 

service to meet State Department requirements. 

In particular, the emphasis will be to improve 

the percentage of passport mailings processed 

through automation and consolidate passport 

facilities. The Postal Service has implemented 

passport acceptance centers in larger cities to 

provide passport services in a separate area 

or location, focusing on customer service and 

convenience.

Post Office Box Service – At 8,400 Post Office 

locations, we offer competitive PO Box service, 

which offers enhancements similar to services 

offered by our competitors and at comparable 

prices. More than 1.1 million customers have 

signed up for the following services:

 Real Mail Notification - Customers receive 

daily emails or text messages to inform them 

that they have mail in their PO Boxes. In 

FY2016, 206,686 customers have signed up 

for this service.

 Street Addressing - Mail is addressed to a 

customer using either their PO Box or the 

street address of the Postal Service facility, 

along with the PO Box number. Over 463,000 

customers used this service during FY2016.

 Signature on File - Offered for receipt of 

Priority Mail Express Mail, insured mail 

over $500, Return Receipt (electronic) and 

Signature Confirmation, more than 318,950 

customers signed up to use this service in 

FY2016.

When choosing a new competitive PO Box, 

customers could participate in the “Baker’s 

Dozen” — 13 months of service for a 12-month 

payment — and a deposit is not required for 

the first two keys. Many locations also offer 

expanded lobby access hours and earlier times 

when mail will be available for pickup.

PO Boxes offer the convenience of online billing 

and payment. Federal agencies now can link and 

pay for all boxes and caller services through their 

Official Mail Accounting System accounts.

Making the Global Connection

In FY2016, the Postal Service made progress 

in its role as a major international e-commerce 

shipping solutions provider. Leveraging our 

strengths in business-to-consumer delivery 

worldwide, 2016 initiatives supported a forward 

looking strategy to help U.S. businesses and 

consumers expand their connections globally.

Commercial Outbound ePacket – In FY2016, 

we signed the first International Customized 

Mail Agreement for Priority Mail International and 

Commercial ePacket hybrid solution for Canada. 
United States Postal Service — FY2016 Annual Report to Congress 63

Designed to meet the needs of e-commerce 

merchants, this option provides a way for 

applicable customs duties, taxes and associated 

fees to be charged to the sender and not 

collected from the addressee upon delivery.

The Postal Service introduced new commercial 

solutions as well. We added workshare versions 

of Priority Mail Express International, Priority 

Mail International and First-Class Package 

International Service for commercial customers. 

These presort drop shipment mailing options 

are now available to most countries and offer 

commercial customers a more cost-effective 

solution for their global e-commerce shipments.

Recognizing that significant opportunities exist in 

the cross-border e-commerce market, the Postal 

Service developed an experimental e-commerce 

solution as a market test designed to remove 

uncertainty and complexity risks facing U.S. 

merchants and their international consumers. 

The easy-to-use, feature-rich integrated solution 

connects existing web stores of U.S. merchants 

to consumer markets around the world.

Ongoing Bilateral Agreements – The Postal 

Service has taken a proactive role in 

strengthening its partnership strategies globally. 

The 2017 USPS and Canada Post Corporation 

bilateral agreement, negotiated in 2016, is one 

of the most effective in market competitiveness 

with regard to service performance and cost 

between the Postal Service and Canada Post. 

We continue to strengthen our alliance with 

Kahala Posts Group and the International Post 

Corporation to be more competitive and provide 

high-quality delivery service.

In preparation for the Universal Postal Union 

Congress being held in Istanbul, Turkey, in 

September-October 2016, the Postal Service 

hosted a pre-congress meeting attended by 

more than 40 countries. The objective of the 

meeting was to work collaboratively to discuss 

and align with other posts in support of the most 

significant proposals.

Enhancing Global Products – The Global 

Business group in 2016 examined global trends 

to better align our efforts to meet the growing 

needs of customers. We reevaluated products 

and services and made a number of changes. 

Global Express Guaranteed (GXG) was added 

to PC Postage platforms in FY2016, giving 

more customers access to this premier USPS 

international service. Additionally, consumers 

had access to GXG at Contract Postal Units 

nationwide.

Priority Mail Express International combined 

the shipping label/customs form. The new PS 

Form 2976-B, Priority Mail Express International 

Shipping Label, reduces paperwork and 

simplifies the customer’s package preparation 

experience. In the fourth quarter, we simplified 

the Priority Mail International product offering by 

moving the Small Flat Rate Boxes and Flat Rate 

Envelopes over to the Priority Mail International 

parcel stream. This gives all Priority Mail 

International products the same features and 

benefits and makes it easier for Postal Service 

customers and employees to understand the 

value of this Postal Service brand.

A number of initiatives in FY2016 focused on 

improving the customer experience. At the 

Customer Call Centers, for example, changes 

were made to the inquiry and claims system to 

auto-populate customs data, reducing agent 

handling time and eliminating the need for the 

caller to provide information that we already 

have. Additionally, by modifying the process 

to monitor each customer inquiry to detect a 

scan that the package has arrived in the foreign 

country, we’ve narrowed the focus of our 

inquiry. If the system does not show arrival in a 

country, our call center agents work the inquiry 

without contacting the foreign administration. 

These inquiries are resolved quicker and reduce 

unnecessary back and forth communication with 

foreign administrations.
64 United States Postal Service — FY2016 Annual Report to Congress 

In FY2016, many Global Business initiatives 

were designed to increase awareness of the 

USPS international services brand. For example, 

additional packaging displays were placed in 

retail units to promote GXG service. This display 

also includes how to properly complete the 

label and shipping forms. In addition to signage 

elements in retail offices promoting international 

services, the team educated retail associates 

and Postmasters on how to sell international 

services to meet customers’ needs. We showed 

the employees how to ask questions to learn 

what truly matters to the customer.

Global Business community outreach included 

a nationwide summer challenge promoting 

USPS international services with universities and 

small/medium businesses. Events were held at 

Post Offices, universities and larger venues in 

collaboration with Postal Service retail and small 

business sales teams in a coordinated effort to 

promote the Made in Rural America initiative.

Connecting Communities

Our employees not only are the faces of public 

service in communities across the nation — they 

give back in many ways, from collecting food 

for families in need to raising awareness about 

important issues to even helping save lives.

During the annual Stamp Out Hunger Food 

Drive, our letter carriers collected more than 80 

million pounds of food donated by customers on 

their routes and destined for local food banks, 

pantries or shelters. It was the 12th consecutive 

year that more than 70 million pounds were 

collected and surpassed the previous record of 

77 million pounds. Since the program began, 

more than 1.5 billion pounds of food has been 

collected. Stamp Out Hunger, the nation’s largest 

single-day food drive, was launched in 1993 by 

the National Association of Letter Carriers and 

is supported by the Postal Service. Canned 

and non-perishable items are collected by 

230,000 letter carriers and other Postal Service 

employees in 10,000 cities and towns in all 50 

states, District of Columbia, Puerto Rico, Virgin 

Islands and Guam.

Each year in May, the Postal Service supports 

National Dog Bite Prevention Week. This public 

safety campaign builds awareness concerning 

animal attacks. Nationwide, 6,549 Postal Service 

employees were attacked in calendar year 

2015. Of the 4.5 million Americans bitten by 

dogs annually, half are children, according to the 

Centers for Disease Control and Prevention. The 

Postal Service, medical community, veterinarians 

and insurance industry are working together to 

educate the public that dog bites are avoidable.

Since 1985, the Postal Service has worked in 

partnership with the National Center for Missing 

and Exploited Children and Valassis to reunite 

families with missing children. Valassis publishes 

the RedPlum circular that showcases the “Have 

You Seen Me?” photos.

This program — America’s Looking For Its 

Missing Children® — is widely recognized as 

one of the nation’s most effective public service 

initiatives. It is responsible for the safe recovery 

of 148 missing children.

The Postal Service also publishes photos 

and information in the Postal Bulletin, adding 

over 600,000 employees to the effort to find 

America’s missing children.

For more information, go to www.missingkids.

com or http://www.valassis.com/about-us/

community/missing-kids.aspx.

Each year, Postal Service employees go beyond 

the call of duty, some even risking their own 

safety, to save the lives of the customers they 

serve. Hundreds have been recognized as 

heroes over the years. At its annual recognition 

event in Washington, DC, the Postal Service and 

the National Association of Letter Carriers (NALC) 

honored Rock Hill, SC, letter carrier Mark Pizzo 
United States Postal Service — FY2016 Annual Report to Congress 65

as the 2016 National Hero of the Year. Pizzo 

risked injury to save a 7-year old girl who was 

being mauled by a vicious dog.

The Postal Service, the National Marrow Donor 

Program and the Be the Match Foundation 

created the “Delivering the Gift of Life” campaign 

18 years ago. To date, more than 58,000 Postal 

Service employees and their families have joined 

the donor registry. More than 80 have become 

donors, helping critically ill patients. The Postal 

Service has now aligned its efforts with Be the 

Match, focusing on individuals between the ages 

of 18 and 44. For more information on Be The 

Match and how to become a marrow donor, go 

to www.bethematch.org.

Since 1912, Postal Service employees, charities 

and individual and corporate volunteers have 

helped children and families in need experience 

the magic of the holiday season by answering 

letters to Santa. This year the Postal Service 

is celebrating the 104th anniversary of the 

Operation Santa program as it continues to fulfill 

the dreams of children nationwide. More than one 

hundred years later, our employees, volunteers 

and organizations remain committed to making 

children’s Christmas wishes come true.

The Postal Service has Operation Santa sites in 

action around the country. In the vast number of 

locations, our employees respond to the letters 

by providing a written response signed by Santa, 

while other Post Offices may work with local 

schools, municipalities and community groups 

who volunteer for the joyous task.

Each year, however, in select Post Offices the 

general public is invited to “adopt” Santa letters. 

In all locations where the public may adopt letters 

written to Santa, strict privacy guidelines are in 

place. Any member of the public choosing to 

adopt a letter may simply respond in writing or 

if they choose, grant the wish, a decision that is 

left to the individual.

New York City’s Operation Santa serves as the 

largest public adoption Post Office in the country. 

A “Big Apple” tradition that has changed very little 

since the 1940s and one which continues to 

thrive to the delight of those who visit the iconic 

James A. Farley building, in the heart of the 

Manhattan.

The Postal Service and Postal Inspection 

Service dedicate one week in March every year 

— National Consumer Protection Week — to 

educate consumers about identity theft and 

other fraud schemes and provide tools and 

information to combat these crimes.

Crime Prevention and Consumer 

Education

There are criminals out there who take things 

out of your mailbox and there are others who 

put things in your mailbox. Postal Inspectors 

investigate these crimes and arrest the criminals. 

But they can’t arrest everybody. So an important 

part of the Postal Inspection Service’s crime 

fighting repertoire is crime prevention and 

consumer awareness. They’ve found that 

educating people about scams and other crimes 

is the best way to prevent them from becoming 

a victim.

Fraud schemes continue to be a major concern, 

targeting the elderly and the young, the rich 

and the poor. Fraudsters have no regard for the 

age or socio-economic status of their victims. 

Technological innovation has extended the reach 

of these criminals who know no boundaries and 

makes law enforcement and prosecution efforts 

more difficult. Identity theft claims thousands of 

American victims each year, while businesses 

and consumers suffer millions of dollars in losses 

and untold amounts of frustration and misery 

recovering from these scams.

In response, the Postal Inspection Service has 

developed a unique approach to consumer 

crime prevention: the Consumer Alert News 

Network (CANN). Now in its fourth year, this 

original news series exposes fraud, identity theft 
66 United States Postal Service — FY2016 Annual Report to Congress 

and cyber scams. Developed in partnership 

with Litton News Source, CANN helps educate 

consumers on prevention measures to avoid 

crimes including bogus job offers, sweepstakes 

swindles, foreign lottery fraud and charity 

scams. Each news segment is presented by 

the inspectors who investigated the crime and 

the consumers who were victimized. Since its 

launch in September 2012, more than 500 

episodes have been produced and distributed 

to 120 television stations across the nation 

— representing a potential 3.8 million viewers 

per segment. Fraud-related public service 

announcements are also aired in conjunction 

with the news segments. The goal is simple: 

help consumers preserve their health, welfare 

and financial well-being.

Building off the success of CANN, Litton 

Entertainment, with the support and technical 

advice of the Postal Inspection Service, created 

“The Inspectors,” a half hour scripted drama 

airing on Saturday mornings on the CBS 

network. The longer format programming enables 

a more in-depth delivery of consumer awareness 

and crime prevention messages on a weekly 

basis to the estimated 1 million weekly viewers 

in the target audience. The show also reaches 

American service members and their families 

overseas through the American Forces Network, 

an audience of an additional million viewers. In its 

first season, the fraud-awareness focused series 

garnered an Emmy award and more than 

50 million viewers.

We’re making a positive impact

As the face of public service in communities 

across the country, we recognize the importance 

of leading by example and nurturing a culture 

of social and environmental responsibility. 

The Postal Service regularly engages with 

employees, customers, suppliers and federal 

peers in sustainability efforts, working to improve 

energy efficiency, reduce water consumption and 

limit waste production from our operations.

Sustainability Performance

The Postal Service is committed to reporting the 

results of our sustainability efforts every year. Our 

targets are in conjunction with those established 

through Presidential Executive Order in terms of 

reductions and base years for comparison. In 

CY2015, we achieved the following:  12.4 percent total greenhouse gas emissions 

reduction.

 32.1 percent decrease in facility energy 

usage.

 31.8 percent decrease in water usage.  41 percent waste diversion from landfill.

We also track our vehicle fuel usage. Postal 

Service-owned vehicle transportation fuel 

use increased by 19 percent. The continued 

increase in fuel use is due to an aging fleet of 

delivery vehicles that we are in the process 

of replacing, as well as a growing number of 

delivery points which adds to the miles we travel.

In 2016, the Postal Service updated our 

commitment to reducing greenhouse gas 

emissions. Our new goal is to reduce Scope 

1 and 2 emissions from our facilities, vehicles, 

purchased electricity and steam by 25 percent 

by 2025. We also plan to reduce our Scope 

3 emissions by 30 percent by 2025. Scope 3 

emissions include categories such as contracted 

transportation, leased facilities and employee 

commuting emissions.

As a sustainability leader, we report three separate 

greenhouse gas inventories. The first is with our 

federal peers through Executive Order 13693: 

Planning for Federal Sustainability in the Next 

Decade. The second is with our industry peers 

at the International Post Corporation, and lastly, 

with our business peers at The Climate Registry. 

In addition, we also report progress to the White 

House Council on Environmental Quality in the 

Strategic Sustainability Performance Plan and the 

Office of Management and Budget Scorecard. 

Each of these efforts furthers our transparency.
United States Postal Service — FY2016 Annual Report to Congress 67

Climate Change Adaptation – Climate change 

could potentially disrupt our ability to provide 

consistent mail service. To better manage 

emerging risks and ensure effective operations 

and resiliency, the Postal Service works to 

incorporate climate impacts into strategies, 

plans, business processes and programs. In 

2015, the Postmaster General reaffirmed this 

commitment in a memorandum. Internal steering 

and working groups track and manage climate 

change considerations in appropriate actions 

and policies. They also work to identify ways that 

long-term planning and collaboration can reduce 

or avoid costs associated with natural disasters, 

rising sea levels and temperature extremes. 

The groups take into account rebuilding costs, 

downtime, equipment loss, employee safety and 

other significant cascading effects resulting from 

climate change.

In 2016, our efforts focused on three areas:  Creation of an analytic climate tool to help 

understand where and what potential impact 

exists.

 Updating policies to reflect our improved 

understanding of climate change impact.

 Improved communications to our employees 

on the issue of climate change.

Read our plan at: http://about.usps.com/whatwe-are-doing/green/climatechange.htm.

Annual Sustainability Report – This year our 

Annual Sustainability Report incorporates 

Global Reporting Initiative (GRI) G4 Guidelines 

and focuses on a new, repeatable reporting 

process. We used the guidelines, including a 

stakeholder engagement pilot process, to solicit 

sustainability input from our internal stakeholder 

group. Through this stakeholder engagement, 

we consider social, economic and environmental 

impacts to operations while considering risks, 

opportunities and long-term prospects.

In a pilot test of a sustainability engagement 

process, we surveyed a focus group to identify 

areas of concern relevant to our operations. In 

the coming years, we will revisit the stakeholder 

engagement process, gradually including a larger 

and wider array of stakeholders to ensure we are 

reporting on what matters most.

Read the Annual Sustainability Report at: http://

about.usps.com/publications/sar2015/sar2015/

welcome.htm.

Environmental Compliance – Continuous 

improvement drives our management systems 

approach to environmental compliance. Several 

standardized national programs, including 

environmental compliance reviews (ECRs), 

facilitate compliance at Postal Service sites 

with environmental risk factors (e.g., vehicle 

maintenance and mail processing activities, 

regulated underground storage tanks and other 

significant permits/plans). Each year, we conduct 

approximately 200 ECRs and hundreds of other 

environmental compliance support site visits. 

Beyond assessing compliance, these visits 

also provide “hands on” training and assistance 

to sites in data management, record keeping 

and other vital functions, and also assist in 

disseminating policies, guidance and tools 

and collecting records and data for corporate 

systems.

Standardized guidance, training and 

record keeping are part of our electronic 

management systems approach to maintain 

compliance. The Postal Service maintains a 

comprehensive inventory of program guidance 

and implementation tools on our compliance 

website. Additionally, a centralized data 

management system provides easy access to 

key environmental data indicators. In FY2016, 

we initiated a mobile application to provide 

instant access to site data during environmental 

compliance visits.

In FY2016, the Postal Service continued 

implementing its underground storage tanks 

strategy focused on providing the Postal Service 

with a modern tank infrastructure that reduces 
68 United States Postal Service — FY2016 Annual Report to Congress 

environmental risk, improves emergency fueling 

planning and maintains associated bulk fuel cost 

savings. In addition to strategically removing and 

replacing these tanks, the program establishes 

a centralized national monitoring system and 

provides on-site compliance support.

USPS BlueEarth Federal Recycling Program

– With the knowledge gained from our own 

sustainability efforts, the Postal Service is 

committed to assisting our customers in 

achieving their own green objectives.

The USPS BlueEarth Federal Recycling Program 

for printer cartridges and electronic waste is part 

of a branded suite of sustainability solutions and 

innovations designed for our federal customers. 

The program provides government agencies and 

their employees with the ability to securely and 

efficiently recycle electronic devices and printer 

cartridges free of charge on a national level. 

Recycling programs help prevent e-waste from 

going to landfills, which can be dangerous to 

both the environment and human health.

Twenty-three federal agencies are currently 

enrolled, including the Postal Service. Federal 

agencies receive a recycling activity report with 

data to assist them in meeting Executive Order 

13693 sustainability requirements. Additionally, 

this effort has been recognized as an example of 

“federal government leading by example” under 

the National Strategy for Electronic Stewardship.

All federal agencies can enroll in the USPS 

BlueEarth Federal Recycling Program to recycle 

electronic devices using the Postal Service 

network. This program makes it simple for 

federal agencies and their employees to properly 

dispose of items such as printer cartridges and 

obsolete small electronics. All items are shipped 

to a certified third-party recycling facility, which 

ensures they are either securely recycled or remanufactured for resale opportunities.

Besides providing a simple, secure and costeffective way to recycle e-waste, the USPS 

BlueEarth Federal Recycling Program also 

increases mail volume and postage revenue. 

For information about the program for federal 

agencies, visit http://blueearth.usps.gov/.

National Recycling Program – As previously 

stated, the Postal Service diverted 41 percent 

of its waste from landfills to recycling. We 

strongly believe we can significantly increase 

this percentage and do so in a financially 

beneficial way. The Postal Service generates 

a large amount of recyclable material, the 

majority of which is mixed paper. We continue 

to incur disposal costs to handle much of this 

material, which would better be turned into 

revenue through recycling. Just like many other 

organizations in the transportation, shipping 

and service sectors in the U.S. economy, the 

Postal Service is increasingly looking to leverage 

its existing reverse logistics capabilities into 

business opportunities. For the Postal Service, 

with its extensive nationwide transportation 

network, the opportunity is significant.

In FY2014, the Postal Service launched a 

five-year National Recycling Operation capital 

equipment investment initiative to expand our 

backhaul recycling to every part of the country. 

Backhauling is using the space available in 

trucks and mail transportation equipment to carry 

recyclables from Post Offices to large distribution 

centers and hubs on the return trip from 

transporting mail to Post Offices. The materials 

are consolidated for recycling at those hub 

locations, and thus no additional transportation is 

required for handling recyclables. To date, capital 

equipment has been deployed into 39 districts 

and 97 USPS facilities.

USPS BlueEarth Secure Destruction Mail 

Service Program – The USPS BlueEarth Secure 

Destruction Mail Service Program is another 

key branded and innovative sustainability 

solution, launched nationwide in FY2015. 

Designed specifically for business mailers 

using the Intelligent Mail barcode, the program 

securely shreds and recycles letter-size pieces 
United States Postal Service — FY2016 Annual Report to Congress 69

of undeliverable-as-addressed First-Class Mail 

with personal protected information that would 

otherwise be returned to the sender. Secure 

Destruction is an opt-in service that operates 

under the protection and supervision of the 

Postal Service.

Mailers enrolled in the program receive a daily 

electronic notice of the mailpieces sorted for 

Secure Destruction. These e-notifications are 

provided to registered mailers through the USPS 

Electronic Product Fulfillment customer portal 

website.

Mailing industry benefits of Secure Destruction:

 Reduces carbon emissions (i.e., greenhouse 

gases). The Postal Service estimates that 

for every 25,000 pieces of carrier-delivered 

return-to-sender (RTS) mail that’s destroyed, 

carbon emissions are reduced by an average 

of 1 metric ton of CO2 equivalent.

 The process takes place within secure USPS 

facilities by our employees, reducing risks of 

information exposure.

 All securely destroyed mail will be recycled, 

thus reducing the demand on natural 

resources.

Benefits for registered mailers:

 Reduction of in-house costs for handling and 

destroying RTS mail.

 Visibility into the process through daily 

automated notifications on the USPS 

Electronic Product Fulfillment website.

 Improvements in privacy protection for 

customers.

The SD Mail Service Program has been 

operational for two years now and continues 

to grow and attract new business mailers. 

In FY2016, more than 30.6 million pieces of 

undeliverable SD mail was captured, destroyed 

and recycled in-house by USPS employees. This 

is an improvement from FY2015 with over 5.3 

million additional pieces of SD mail captured.

Metric FY2016 FY2015

Mail Volume (pieces) 30,622,876 25,280,354

Potential GHG 

Reduced (metric tons 

CO2

 equivalent)

1,224.9 1,011.2

Paper Recycled (metric 

tons)

781.3 645

Capture Rate 3.53% 2.91%

Maintaining Focus and 

Accelerating Growth

The Postal Service has adopted a structured 

management process, Delivering Results, 

Innovation, Value and Efficiency (DRIVE), to 

improve business strategy development and 

execution against our major goals. It’s sponsored 

by the Postmaster General with direct oversight 

from the Executive Leadership Team.

This process is based on a well-established 

methodology used by many corporations to 

apply strategic and financial rigor to decisionmaking, and to navigate through significant 

organizational changes. This structured approach 

to organizing operational and management 

activities facilitates cross-functional dialogue and 

collaboration, provides streamlined reporting and 

accountability and incorporates measurement, 

analysis and evaluation of a portfolio of strategic 

initiatives.

In FY2016, progress was tracked through 

a detailed reporting system and is reviewed 

every month by the Executive Leadership Team 

for the Postal Service. We continue to make 

improvements to our governance processes 

using industry best practice approaches to 

ensure successful outcomes. The DRIVE 

portfolio of initiatives is dynamic and changes as 

priorities and resources require, and as programs 

are completed or adjusted based on external 

events. These initiatives support Postal Service 

corporate-wide goals as shown in the FY2016 
70 United States Postal Service — FY2016 Annual Report to Congress 

DRIVE Portfolio of Initiatives table (see page 71).

In FY2016, the Postal Service focused on the 

implementation of a portfolio of 15 strategic 

initiatives to meet its ambitious performance and 

financial goals. To date, the DRIVE portfolio has 

been able to drive significant revenue and costsavings measures through our initiatives to make 

a positive impact on the Postal Service financial 

outlook in FY2016 and beyond. The strategic 

initiatives identified for FY2016 were designed 

to respond to the changing environment of the 

Postal Service moving from a solely economic 

model to a model focusing on change, 

improvement and increasing our competitiveness 

to increase revenue generation.

On an annual basis, the portfolio of initiatives are 

evaluated by the Executive Leadership Team 

to determine the appropriate mix of initiatives to 

continue into the next year, including initiatives 

that 1) remain a priority and will continue, 

2) should be closed or refined based on 

organizational priorities or 3) based on business 

needs to add new initiatives.

FY2016 DRIVE Portfolio of Initiatives

We continue to refine and grow our initiatives 

to best serve the overall needs of the Postal 

Service. To that end, the FY2016 DRIVE Portfolio 

of Initiatives table demonstrates our changes to 

the portfolio year over year.

The changes to our initiatives can be categorized 

by the following six actions (see table):

1)  New — Initiative has been created in 

FY2015 to address an emerging business need.

2) ⇔ Continued — Initiative continued into 

FY2015 with minimal changes from FY2014. 

3) ⊗ Closed — Initiative was closed as a result of 

a completed activity or change in business need.

4) ⇑ Refined — Initiative was refined to reflect the 

current business situation and to achieve greater 

alignment with organizational goals.

5) ‡ Combined — Initiative was combined with 

a similar DRIVE initiative(s) to more accurately 

reflect the current business situation and provide 

greater alignment organizationally.

6) ≺ Split — This initiative had been divided into 

smaller more discreet initiatives to provide better 

focus on critical programs.
United States Postal Service — FY2016 Annual Report to Congress 71

FY2016 DRIVE Portfolio Initiatives

Corporate Goal Strategies FY2015

Initiatives

Change 

Year Over 

Year

FY2016

Initiatives

Deliver HighQuality ServiceOptimize the Value of Infrastructure Optimize Network Operations ⇑ Refined Optimize Network Platform

Optimize Delivery Operations ⇑ Refined Optimize Delivery Platform

Transform Access ⇑ Refined Optimize Retail Platform

Optimize Facility Footprint ⊗ Closed

Build a World-Class Package Platform ⇔ Continued Build a World-Class Package

 Platform

Modernize Delivery ‡ Combined Optimize Delivery Platform

Provide Excellent 

Customer 

Experiences Improve Customer Experience 

Improve Customer Experience ⇑ Refined

 New

Build a World-Class Customer 

 Care Process

Create a World-Class Social 

 Media Platform

Leverage Technology to Drive 

 Business Value

Leverage Technology and

 Data to Drive Business Value

⇔ Continued Leverage Technology and

 Data to Drive Business Value

Sustain 

Controllable 

Income

Grow Revenue from Innovation, 

 Core Products and Markets

Accelerate Innovation ⇑ Refined Accelerate Innovation to 

 Maximize Revenue and Profit

Customer Growth and Retention ⊗ Closed

International Competitiveness ‡ Combined Accelerate Innovation to 

 Maximize Revenue and Profit

 New Informed Delivery

Strengthen Financial and Risk

 Management Capabilities

Obtain PCI Compliance ⊗ Closed

Achieve 100% Customer and Revenue

 Visibility

⇑ Refined Optimize Customer and

 Revenue Visibility

Enhance Enterprise Risk Management

 Capabilities

⊗ Closed

Revenue Assurance ‡ Combined Leverage Technology and

 Data to Drive Business Value 

Greenfield Costing ⊗ Closed

Advance the Legislative and 

 Regulatory Agenda

 New Obtain PRC Approval for an 

 Alternative Pricing Model

Ensure a Safe 

Workplace 

and Engaged 

Workforce

Engage and Empower 

 Employees

Contract Implementation and 

 Compliance

Corporate Succession 

 Planning

Build Competitive Workforce of 

 the Future

Building the Workforce of the Future ≺ Split Improve Safety Programs

Building an Integrated Human

 Resource System

 ‡ Combined Leverage Technology and

 Data to Drive Business Value
72 United States Postal Service — FY2016 Annual Report to Congress 

All references to a specific year or “the year” refer 

to the Postal Service fiscal year ending Sept. 30. 

However, specific month and year references 

pertain to the calendar date.

The following are among the many trademarks 

owned by the United States Postal Service®:

1-800-ASK-USPS®, ACSTM, APC®, Approved 

by the Postmaster General®, Approved 

Postal Provider®, Automated Postal Center®, 

Carrier PickupTM, Certified Mail®, Click-NShip®, Commercial Base®, Commercial 

Plus®, Confirm®, Critical Mail®, Customized 

MarketMail®, CyberSafe at USPSTM, Delivery 

ConfirmationTM, DineroSeguro®, DMM®, 

EDDM®, EDDM Retail®, ePacket®, EPM®, 

Every Door Direct Mail®, Express Mail®, 

FAST®, FASTforward®, First-ClassTM, FirstClass Mail®, First-Class Mail International®, 

Forever®, Global Direct Entry®, Global Express 

Guaranteed®, gopost®, IM®, IMb®, Intelligent 

Mail®, International Priority Airmail®, International 

Surface Air Lift®, LACSLink®, Media Mail®, 

MERLIN®, Metro Post®, Mover’s Guide®, 

MyUSPS.com®, NCOALink®, Netpost®, 

OneCode ACS®, Our Priority Is You®, Parcel 

Post®, Parcel Select®, PC Postage®, 

PCC®, PLANET Code®, PO BoxTM, Post 

OfficeTM, Post Office BoxTM, Postal ServiceTM, 

PostalOne!®, POSTNETTM, Premium Forwarding 

Service®, PRIORITY:YOU®, Priority Mail®, 

Priority Mail Express®, Priority Mail Express 

International®, Priority Mail Flat Rate®, Priority 

Mail International®, Priority Mail Regional Rate®, 

RDITM, ReadyPost®, Real Mail Notification®, 

REDRESS®, Registered MailTM, RIBBS®, 

Self-Service Ship and Mail Center & Design®, 

Signature ConfirmationTM, Stamps by Mail®, 

Stamps to Go®, Standard Mail®, Standard 

PostTM, The Postal Service®, U.S. Mail®, U.S. 

Postal Service®, United States Postal Inspection 

Service®, United States Postal Service®, United 

States Postal Service Office of Inspector General 

and Design®, USPS®, USPS BlueEarth®, 

USPS Change of Address®, USPS Delivery 

Confirmation®, USPS Digital ServicesTM, USPS 

Electronic Postmark®, USPS ePacket®, USPS 

Mobile®, USPS Package Intercept®, USPS 

Retail GroundTM, USPS Tracking®, USPS.

COM®, Village Post OfficeTM, VPO®, ZIP 

CodeTM, ZIP + 4®.

The Sonic Eagle Logo and the trade dress of 

the Round Top Collection Box, the Letter Carrier 

Uniform, USPS packaging and the LLV Mail Truck 

are also among the many trademarks belonging 

to the United States Postal Service.

Trademarks

Year References
Forever Stamps

2016