1. Delivery Operations
Joint Area Vice Presidents; Managers, Operations Support; Area Marketing Managers Meeting
September 11, 2008

2. Total Savings $1,000 26.2 FUNCTION 2 CLOSING THE GAP STRATEGIES
2009 F-2 Challenge
FUNCTION 2 CLOSING THE GAP STRATEGIES
(millions)
Workhours
Dollars
Reduce Route Structure
$530
12.7
Fall / Spring Adjustments
Maintain Hours per Rt
$300
8.1
Continuous Improvement
Collection Standardization
$25
0.7
Reduce Dedicated Coll Rts
Function 2B
21.5
$855
Rural Mail Count Annualization
$115
3.7
Rural DPS at 85%
$30
1.0
Function 2A
4.7
$145
Total Savings
$1,000
26.2

3. 2009 F-2 Budget

4. Strategies/Tactics – Qtr 1 FY 2009
Strategy / Tactics
Strategies/Tactics – Qtr 1 FY 2009
Continuous Improvement
Drive Major Delivery Efficiency Components
FY 2009 CDPOM Productivity Expectations
% Standard at Demonstrated Performance
% Adjusted Street Base at 98%
DPS at 90%
Fall Mailing Season (Sep thru Nov) Opportunity
December (Christmas) Opportunity
Eliminate Two Costly Paradigms
Result - Maintain Current Hours per Route Performance in Qtr 1 - $300 million

5. CDPOM Productivity Expectations:
Continuous Improvement
Standardized, Proactive Scheduling/Staffing Tool has Helped to Drive Continuous Improvement In Delivery Efficiency
CDPOM Productivity Expectations:
FY 2007 Qtr
Office
Street
DPS %
100% Standard
100% Street Base
85%
FY 2009 Qtr
Office
Street
DPS %
90% Standard
98% Street Base
90%
FY 2008 Qtr
Office
Street
DPS %
97% Standard
100% Street Base
89%
90% Standard – Current Nat’l Demonstrated Performance in DOIS
Aligns CDPOM with DOIS Daily Projections
FY 2008 Qtr
Office
Street
DPS %
97% Standard
98% Street Base
89%
90% DPS – FY 2009 Budget Target
4 of 9 Areas Currently Achieving
FY 2009 Qtr
Office
Street
DPS %
90% Standard
98% Street Base
90%
98% Adjusted Street Base – 5 Areas Achieving in Qtr 4

6. Area Distribution Based On Current Expectations
Continuous Improvement
Area Distribution Based
On Current Expectations
On Revised Expectations
Week 48 CDPOM Efficiency at Current Performance Expectations
Week 48 CDPOM Efficiency at FY 2009 Performance Expectations
Pivot
Opportunity %
Achieved
National
Week 48 Gap
179K Workhours
Week 48 Gap
96K Workhours

7. Fall Mailing Season Impact on Average Cased Volumes
Eliminate Costly Paradigms
Fall Mailing Season Impact on Average Cased Volumes
Average Weekly Rate of Change – May-Aug vs Sep-Nov
* Projected
IMPACT OF FALL MAILING SEASON 20 40 60 80
100
120
140
160
180
200
Cased Volume (millions) * 8%
53 M
Average Daily
Impact Per Rt
6 Min
15%
129 M
16 Min
19%
183 M
22 Min
Rate of Change
Amount of Change
1,400,000
Summer Fall
Summer Fall
2008 – 2009
Summer Fall
Avg May-Aug
957,285,386
1,140,294,866
Avg Sep - Nov
Avg May-Aug
697,219,161
750,334,448
Avg Sep - Nov
Avg May-Aug
848,028,815
976,834,805
Avg Sep - Nov
1,300,000 *
1,200,000
1,100,000
1,000,000
Cased Volume (000)
900,000
700,000
800,000
600,000
500,000
400,000 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 02 03 04 05 06 07 08 09 10
May
June
July
August
September
October
November FY FY FY
* Projected

8. Result: Maintain Current Route Coverage in Qtr 1
Hours per Route
Result: Maintain Current Route Coverage in Qtr 1

9. Tactic: Maintain Current Route Coverage in Qtr 1 (LDC 23/27)
Hours per Route
Tactic: Maintain Current Route Coverage in Qtr 1 (LDC 23/27)

10. Tactic: Manage to Actual Workload During December
Eliminate Costly Paradigms
Tactic: Manage to Actual Workload During December

11. Tactic: Manage to Actual Workload During Dec (LDC 23/27)
Eliminate Costly Paradigms
Tactic: Manage to Actual Workload During Dec (LDC 23/27)

12. QTR 1 OPPORTUNITY – MAINTAIN CURRENT HRS per RT
Savings Summary
QTR 1 OPPORTUNITY – MAINTAIN CURRENT HRS per RT
DELIVERY ROUTES OCT-NOV
4,858,251
$179,755,299
LDC 23/27 OCT-NOV
224,632
$8,311,369
DELIVERY ROUTES DECEMBER
2,543,895
$94,124,130
LDC 23/27 DECEMBER
504,406
$18,663,014
TOTAL SAVINGS POTENTIAL
8,131,184
$300,853,812
WORKHOUR
SAVINGS
DOLLARS
Qtr 1, FY 2009

13. 2009 Rt Structure
2009 Route Structure

14. Plan Supported Routes – FY 2008 vs FY 2009
2009 Rt Structure
Plan Supported Routes – FY vs FY 2009
* Assumes that Routes are Eliminated Day 1, FY 2009

15. Strategies/Tactics - FY 2009 Route Structure
Strategy / Tactics
Strategies/Tactics - FY 2009 Route Structure
Conduct Fall Route Inspections / Minor Rt Adjustments
MRA Where Current Rt Inspection Data Exists – Using COR
Full RCI Focus on Inner City Low Volume Units
Continuous Vacant/Opportunity Route Reviews
Negotiated Minors
Execute the Strategy:
District Manager Route Reduction Targets
Aggressive Spring Route Inspection / MRAs
Casers and Deliverers Concept

16. Fall Targeted Route Inspection Tracking Report
Fall Readiness
Fall Targeted Route Inspection Tracking Report

17. DM Targets ESTABLISH DISTRICT MANAGER ROUTE REDUCTION TARGETS
FALL RT ADJUSTMENT SAVINGS POTENTIAL AT 1 ROUTE IN 20+ ROUTE UNITS

18. DM Targets ESTABLISH DISTRICT MANAGER ROUTE REDUCTION TARGETS
FALL RT ADJUSTMENT SAVINGS POTENTIAL AT 1 ROUTE IN 20+ ROUTE UNITS

19. 2009 Route Adjustment Timeline
2009 Rt Adjustments
2009 Route Adjustment Timeline
Fall Adjustments
CONDUCT
CAPTURE SAVINGS
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
QTR 1
QTR 2
QTR 3
QTR 4
Fall 2009 Savings Potential Based on 3,750 DM Target
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
FY 2009
750
720
780
6.8 mill
Fall

20. Strategies/Tactics - FY 2009 Route Structure
Strategy / Tactics
Strategies/Tactics - FY 2009 Route Structure
Spring Route Inspection / MRAs
Traditional Processes – Execute the Strategy
MRA Where Current Rt Inspection Data Exists – Using COR
Targeted Full Route Count & Inspections
Continuous Vacant/Opportunity Route Reviews
Negotiated Minors
Aggressive
Potential Article 19 Eliminating the Requirement for:
Current Route Inspection Data
Same Carrier on Route
Allows Across the Board Minor Adjustments for Volume
Reductions Plus COR Usage
Pursue Nat’l Union Negotiations (from a position of strength)

21. 2009 Route Adjustment Timeline
2009 Rt Adjustments
2009 Route Adjustment Timeline
Spring Adjustments
CONDUCT
CAPTURE SAVINGS
CAPTURE SAVINGS
Fall Adjustments
CONDUCT
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
QTR 1
QTR 2
QTR 3
QTR 4
Spring 2009 Savings Potential Based on 6,300 Required Target
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
FY 2009
1,446
1,504
5.9 mill
Spring
750
720
780
6.8 mill
Fall
750
720
780
2,196
2,284
12.7 mill
Total

22. 2009 Rt Adjustments
Casers and Deliverers
Concept

23. Recorded Volumes Discounted by 20% to Account for Inflation
Casers / Deliverers
Recorded Volumes Discounted by 20% to Account for Inflation

24. Result - Inefficient route structure and vehicle utilization
Casers / Deliverers
Current Situation
Significant Number (16%) of Units Average Less Than
3ft Cased Volume a Day (Based on May 2008)
Carriers expand office time to justify leaving time
Low, incremental volumes cause waiting time impacts felt
on every route
Average FOT costs have increased to minutes nationally
Current Annualized Cost of FOT - $1.2 billion
Result - Inefficient route structure and vehicle utilization

25. Total Earned Daily Office Time
Casers / Deliverers
Current Situation
Many inner city, low volume units earn more in Fixed
Office Time than the value of their cased workload
Example:
30 route office casing an average of 2.5 ft
of mail daily and achieving 100% Standard
Value of
Cased Workload
Fixed Office Time
20.0 hours
19.7 hours
Total Earned Daily Office Time
39.7 hours
Due to :
Expansion of office time
Carrier waiting time / mail flow Issues
Actual % Standard performance degrades
to avg of 150% standard in low volume units
60.0 hours
Total Actual Daily Office Time
Result: Traditional 2 hours in the office and 6 on the street!

26. Suggested Unit Criteria for Implementation
Casers / Deliverers
Suggested Unit Criteria for Implementation
3 Feet or Less Cased Volume per Route
Poor Percent to Standard
Current Vacant Routes or Potential Vacant Routes
Current Street Times Greater than 6:30
Consistent Mail Flow from Processing
Mail Arrival (to meet 3 hour casing window, 9:30 AM leave time)

27. SAMPLE CANDIDATE OFFICES
Casers / Deliverers
SAMPLE CANDIDATE OFFICES

28. Solution – Decouple Office / Street Duties
Casers / Deliverers
Solution – Decouple Office / Street Duties
Proposed Strategy
Evaluate Routes and make Adjustments by Removing
Casing / Office Duties from as Many Routes as Possible
Creating Separate Caser and Deliverer Assignments
Street Routes – 100% Street Delivery
Caser Routes– Office and Street Delivery
Existing RC&I or Minor Adjustment Process
requires reasonably current data and same carrier
Local agreed upon process

29. Solution – Decouple Office / Street Duties
Casers / Deliverers
Solution – Decouple Office / Street Duties
Proposed Strategy – Creation of 100% Street Routes
Remove all office time except clocking in, sign for keys,
accountables, obtain scanner, receive instruction/service talks, vehicle safety check.
Add street time to the route approximately equal to amount of office time removed (as near to 8 hours as possible)
Carrier collects mail prepared and staged for street delivery, collects accountables, clocks to the street, loads vehicle and proceeds to the first delivery point
Expectation that carrier street time will be about 7:40 hours for deliverers

30. Suggested Implementation
Casers / Deliverers
Suggested Implementation
Perform a Route Inspection on the Unit
Determine the Office Time value for the Unit
Using Unit Office Time determine the number of casers required (Total office time / 2:45)
Determine the Street Time value for the Unit
Determine the Street Time required to make the Casers 8 hours (Total street time - Casers * 4:30)
With Remaining Street Time determine how many Deliverers are needed (Remaining street time / 7:40)
Create New Assignments in COR

31. Benefits Over Current Traditional Rt Structure
Casers / Deliverers
Benefits Over Current Traditional Rt Structure
Reduction of required unit level Fixed Office Time
Reduction of idle waiting time due to low incremental volumes on multiple trips
Less contention over the value of the workload with individual carriers
More consistent delivery times

32. New Tools for Effective
Street Management Tools
New Tools for Effective
Street Management
GPS/GIS
Delivery Point Coverage
Daily Report

33. Global Positioning System/Global Information System
Street Management Tools
Global Positioning System/Global Information System
Currently installed in 500 vehicles with passive GPS/GIS system in Chicago
Requires no interaction with carrier
GPS makes it possible to easily locate and account for USPS delivery vehicles
Simply records information
Miles traveled
Deviations from route
Idle time
With engine on and with engine off
Number of stops and park points
Deviation from route structure (hop and stop vs. park and loop)
Provides breadcrumb trail of vehicle activity

34. Street Management Tools
This first slide shows us a map of the Chicago area and the Cesar Chavez Station highlighted in Green. The Red dots indicate the location of the vehicles assigned to this station.
As we can see from the map there is one vehicle that is located outside of the ZIP code that it is assigned to.
The system can send an alert to selected individuals Blackberry’s when this happens so that the local person responsible can investigate why.
In addition, if we click on the vehicle we can get some information about that location. This vehicle appears to be at a Contract repair facility “Art’s Collision Repair. This location was entered by the District as a location that vehicle may frequent. All of the Stations in the city of Chicago have been entered as locations.
When we click on the location we can get a pop-up display that can show a 360 degree view of what the area looks like.
This will come in handy in a later slide.

35. Street Management Tools
This is the Detailed Activity Report and it shows all of the transmitted activity of the vehicles for a selected period of time (Today, Yesterday, or a selected period).
When this report is opened it also displays a breadcrumb trail of the activities listed. CLICK ON THIS SLIDE AND THE BREADCRUMB APPEARS WITH SOME HIGHLIGHTS.
Here is a copy of the Breadcrumb trail for this Detailed Activity report.
If we look at the report and the trail we can do some analysis. The highlighted boxes show the vehicle selected has been parked at 2238 S Washtenaw Avenue for over 3 hours and 40 minutes. This should raise some questions as to what kind of area is this and why would we be parked there for that long?
This would trigger the local management to investigate the situation. And on the next slide we will see how they might do that.

36. Street Management Tools
This is the Start/Stop report and it shows any time the vehicle actually has the engine turned on or off. In this report we can select a timeframe which tells the report to bold any list that is stopped for more that the selected timeframe.
In this report we asked for any stop greater that 30 minutes and we see that 2238 S Washtenaw Avenue appears again.
If we click on the either of the times we will get the information for that time and be able to see the 360 degree view of the location as we saw in the first slide.
Looking at this 360 degree view we see that this area has door to door delivery, which raises the question why do have a park location that makes door to door delivery and it lasts for 3 hours and 40 minutes.
These are just a couple of the ways that the system can help the deliver managers.
In addition to these types of reports, with the Blackberry and support alerts can be sent when selected events occur such as
When a vehicle enters or exists their ZIP Code area
When a vehicle is stop for an extended period
When a vehicle arrives a a pre-determined location
When a vehicle is in motion during late (after 1700) or non-delivery times

37. Cost Breakdown: Unit cost = $252 ea 500 $126,000
Street Management Tools
COST OF CURRENT SYSTEM UTILIZED IN CHICAGO
Cost Breakdown:
Unit cost = $252 ea $126,000
Installation = $50 ea $25,000
Training $2,000
Monthly Service $22.95 ea $11,475
Total Annual Cost $138,000
Annual Cost
Breakeven Point minutes per route per day!

38. Daily Delivery Coverage
Street Management Tools
Daily Delivery Coverage
Objective:
Identify Estimated Daily Delivery Point Coverage through Automation Equipment
Compare Against a Route’s Base Delivery Coverage
Generate a Daily Report for AM Supervisor to Review and Consider When Determining Street Expectations
Next Steps:
Currently Completing Initial Coding Requirements
Pilot Site Testing to Begin Over the Next Several Weeks
National Deployment Qtr 2 FY09

39. Daily Delivery Point Coverage Report
Street Management Tools
Daily Delivery Point Coverage Report
0 – 65% Coverage
65 – 85% Coverage
> Than 85% Coverage

40. Daily Delivery Point Coverage Report
Street Management Tools
Daily Delivery Point Coverage Report
Area Rollup
* Non Validated Data

41. We Face an Unprecedented Budget Challenge in FY 2009
Summary
We Face an Unprecedented Budget Challenge in FY 2009
with 6,300 Unfunded Routes on Day 1
Every Day we Wait in Reducing Routes Adds to the 2009 Reduction
Requirement. Execute the Strategy with:
Aggressive Fall/Spring Inspection/MRA Plans
Accountability – District Manager Route Reduction Targets
While We Won’t Realize Substantial Savings from Route
Reductions in Qtr 1, we Have a Huge Opportunity in
Maintaining our Current Hours per Route Through December
Eliminate the Paradigms and Manage to Actual Workload
Fall Mailing Season Opportunity
Christmas Opportunity
To the Extent we are Unsuccessful in Reducing the # Routes Needed to Achieve Budget, We Will Need to Close the Gap By:
Continued and Deeper Levels of Pivoting Through:
Effective Use of Scheduling / Staffing Tools
Achievement of Continuous Improvement Targets