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February 2012
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Price
Capped by inflation Price elasticities are in flux due to growing alternatives
These trends will continue to put pressure on USPSs ability to provide Labor Costs affordable universal ~80% of total costs COLA increases service
Rising but capped Rising Cost per hour
Benefits: pensions, retiree health, health insurance Limited flexibility Retiree prefunding obligation, rising workers compensation costs 2
First-Class Mail
125 125
Standard Mail
100 98 75 78
100
103 83 82
75
81
50
53 39
50
25
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Note: Savings reflect early estimates/goals. Further updates business plan financials will be shared in the coming weeks
What is Changing?
24:00
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Fed
Expanded Window
Fed
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Hour
Hour
Option #1 Frequent pickups at future processing location Option #2 Continue at current location or close proximity
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Timing
Proposed Service Standard Change
Publish Final Rule Implementation Mid-April After May 15
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Concluding Thoughts
We are doing our utmost to maintain the long-term affordability of mail and high level of service Network changes will be imperceptible to 150 million residential customers; seamless for business customers We are creating giant efficiency improvements throughout our network; take advantage by aligning your logistical network with ours We value your business and will provide responsible solutions throughout our transition
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Questions?
This presentation is posted online at: http://about.usps.com/news/facility-studies/welcome.htm
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