The Postal Service provides the nation with a vital delivery platform that sustains and propels American commerce and binds the nation together by serving every American business and residential address.
Because of a dramatic shift in market dynamics over more than the past decade, and a limited ability under our current regulatory framework to respond to market forces, the financial challenges facing the Postal Service have grown more serious. In the absence of needed legislative and regulatory reforms, the organization has recorded annual financial losses over the past decade.
Each year, we deliver less mail to each address, as we add more than 1 million new addresses every year. Given our current business model, our operating losses will grow larger as this trend continues. No matter how you look at it, our flawed business model is unsustainable. However, while our financial challenges are serious, they are solvable.
The Temporary Emergency Committee, which includes our governors along with Deputy Postmaster General Ron Stroman and me, are developing a 10-year business plan to put the Postal Service on a sustainable path forward. The plan will focus on the key public policy questions of what universal services the Postal Service should provide, and how to pay for those services.
While our plan is being finalized and reviewed through third-party analysis — and it may change as part of this process — you may begin seeing reports or statements about various elements and proposals in the plan based upon premature disclosures.
While we will of course brief all of our employees about the plan when it is ready, here are a few ideas to keep in mind before the final plan is released:
• The plan is essentially based on the current business model, which requires the Postal Service to be self-funded, and to generate enough revenue through the sale of our products and services to pay for all of our obligations.
• The plan is intended to preserve the ability to provide and finance secure, reliable and affordable universal delivery service; to further economic growth and enhance commerce; to ensure long-term self-sufficiency; and to maintain fairness to employees and customers.
• A number of the core initiatives will require legislative action. Tough public policy decisions will be necessary.
• If some elements of our plan are politically unpalatable, Congress will need to find substitutes for those elements to ensure that the financial gap is fully closed and that we are sustainable for the long term. This could require Congress to fundamentally reconsider our current business model.
• In the plan, we remain committed to obtaining greater product and pricing flexibility that allows us to continually invest in the future of the organization as well as in our digital and physical infrastructure to keep the Postal Service innovative and relevant for the coming years.
• We continue to seek Medicare integration and the ability to implement best-in-class practices used by successful business organizations in today’s competitive and evolving marketplace.
• We will work closely with our stakeholders to build support for the plan. While many of the elements of the plan will be controversial and some will be unpopular with affected stakeholders, the Postal Service is striving to remain balanced, and the organization is focused on key objectives and fulfilling our responsibilities to the American public.
• We will keep all of our employees informed of developments. When we make the plan available, we will provide context and background information so that every employee can be knowledgeable and aware of key initiatives.
We demonstrate our value every day by delivering for our customers. The one clear principle that all of our stakeholders have rallied behind is that we provide a fundamental service to the people and businesses of this country that everyone wants to preserve. We need to grapple now with the key public policy issues that will ensure our long-term financial health. While we do so, I would ask each of you to stay focused on continuing to provide the secure, reliable and efficient service that every American has come to expect.
Thank you for your service.