Implications of Electronic Mail and Message Systems for the U.S. Postal Service

Chapter 2

Background and Purpose of Study

Introduction

By some measures, the U.S. Postal Service
(USPS) has done remarkably well in the 10
years since postal reorganization.* Gross pro
ductivity, as measured by number of pieces of
mail per workyear, has increased by 34 per
cent since fiscal year 1970 when 741,000 postal
employees delivered 85 billion pieces of mail.
In fiscal year 1980, 667,000 employees de
livered 106.3 billion pieces of mail. In 1980,
mail volume increased by 6.5 percent over
1979. First and third class mail volumes con
tinue to show strength with increases of ap
proximately 15 and 36 percent, respectively,
over the last 5 years. During the same period,
pieces of mail per capita have increased by
about 13 percent, from 418 pieces per person
in fiscal year 1976 to 480 pieces in 1980.'
On the financial side, USPS more than broke
even over the combined 1979 80 period. The
surplus of $470 million in fiscal year 1979 off
set a deficit of $306 million in 1980. The cost
of postage continues to rise, but since 1975 at
a rate that is lower than the consumer price
index. If fully adjusted for inflation since 1975,
a first class stamp would cost 22( rather than
the current 20(. However, if fully adjusted for
inflation since 1967, a first class stamp would
cost only about 14(. Thus, about 6( out of the
current 20C represents a real increase in the
first class letter rate since 1967. The letter rate
in the United States continues to be well below
rates in most other countries. For example, in
1980 the letter rate was about 29( in Britain
and Japan, 31( in France and Sweden, and 33(
in West Germany.
*Th Postal Reorganization Act of 1970 enacted by Congress
abolished the Post Office Department as a cabinet level agen
cy of the executive branch. Postal functions were transferred
to an independent Government agency known as the United
States Postal Service, which commenced operations on July 1,
1971.
'Annual Report of the Postmaster General fiscal 1980.
'Ibid.

Why, then, is there concern about the future
of USPS? While recent years have been rela
tively good, the 1980's and 1990's will pose
a number of new and perhaps more difficult
challenges.
First, the potential for further improve
ments in postal productivity through presort
discounts and through mechanization and
automation is limited. Even a fully im
plemented expansion of the ZIP code to nine
digits (known as ZIP + 4) would mean a
cumulative reduction of only about 15,600
workyears by 1987 according to USPS esti
mates. Compared to the current USPS annual
workyears of 679,000, the productivity im
provement would amount to about 2.3 per
cents This means that continued automation
will provide only a small part of the total pro
ductivity improvement needed by USPS to
offset inflationary increases in employee com
pensation and transportation, which together
account for over 92 percent of total USPS an
nual expenditures.
Second, while USPS operating statistics in
dicate that ontime delivery has been main
tained for 95 percent of first class mail des
tined for local or metropolitan area overnight
delivery, ontime delivery within 600 miles and
for cross country fist class mail generally has
declined since 1977. Two day delivery of let
ters within 600 miles was achieved 86 percent
of the time in 1980 compared to 90 percent in
1977. Three day delivery of cross country let
ters was achieved 87 percent of the time in
1980 compared to 91 percent in 1977.SPart of
'Comptroller General of the United States, Implications of
Electronic Mad for the Postal Service Work Forme (Washington,
D. C.: U.S. General Accounting Office, Feb. 6, 1981), p. 32. The
estimated changes in workyears per year from the nine digit
ZIP are as follows: 1981 (+3), 1982 (+87), 1983( 1334), 1984
(2382), 1985 (-3301), 1986 (-4378), and 1987 (-4295) for
a total reduction of 15,600 workyears. Per Nov. 4, 1981, discus
sion with Douglas Lynn of the USPS Operations Group.
Annual Report, op. cit., p. 24.
'Ibid., pp. 8, 11.

United States. Congress. Office of Technology Assessment. Implications of Electronic Mail and Message Systems for the U.S. Postal Service. UNT Digital Library. http://digital.library.unt.edu/ark:/67531/metadc39480/. Accessed December 19, 2014.