Service Standards

1
Service Standards Measurement Status
ReportMTAC February 18, 2009
2
Modern Service Standards Established
Service Standards

• Postal Act of 2006 required USPS to establish
  modern service standards
• By December 20, 2007, in consultation with the
  PRC for all Market Dominant Products
• Consideration of Various Objectives and Factors
• Value, access, reliability, measurability
• New Service Standard Business Rules
• Based on Operating and Logistics capabilities by
  product
• Class based, independent of shape
• Integrate origin entry and destination entry
  standards

3
Service Standards
Ongoing Review Process

• Two Levels of Service Standard Review
• Ongoing Maintenance - Quarterly
• Localized adjustments
• National Systemic Review - Annual Review
• System wide review
• First annual internal review Oct - Dec. 2009
• Evaluate business rules
• Considerations
• Operationalizing service standard initiatives
• Network plan
• Full year of performance measurement data

4
Gathering data through three approaches
Service Measurement

• External Single-piece Domestic and International
  First-Class Mail, Periodicals
• Hybrid Presort First-Class, Standard
• Internal Packages (Parcel Post, Library Mail,
  Media Mail, and Bound Printed Matter), Special
  Services

5
External Measurement
Service Measurement

• Applies to
• First Class Mail (Single-Piece) - EXFC
• Single Piece International IMMS
• Third-party vendor creates test mail
• Test Mail anonymously dropped into USPS
  network date/time recorded
• Test Mail received by panel of recipients date
  recorded

6
Single-piece First Class Mail / External
First-Class (EXFC)
Service Measurement
7
EXFC Points of Emphasis
Service Measurement

• As of October 1, 2009, virtually all 3-Digit
  SCFs are included in EXFC
• 99.9 mail coverage 891 three-digit ZIP Code
  spans
• Reported quarterly to the district level
• IMMS reported at the area level
• Specific 3-Digit, and in limited cases 5-Digit,
  exclusions submitted to PRC

8
Hybrid Measurement
Service Measurement

• Will take effect with the implementation of
  Intelligent Mail Release 2
• First-Class Mail (Presort)
• Standard
• Periodicals
• Supplements mail scans from internal Intelligent
  Mail system with externally collected data

9
Service Measurement
Hybrid Measurement Approach
10
FCM Presort and Standard Interim Approach
Service Measurement

• Uses first processing scan at point of entry as
  a proxy for Start-the-Clock last processing
  scan plus last mile delivery factor, based on
  EXFC reporters, as Stop
• Processing scan on USPS automated equipment
  clearly demonstrates the mailing has been entered
  into USPS Network
• As Mailers/USPS demonstrate capability, we will
  transition to container scans at entry
• Pilot data being used to calculate performance
  data reported at the area level, quarterly

11
Periodicals Interim Approach
Service Measurement

• Use two external systems -
• Red Tag and DelTrak
• Measurement reported by external provider
• Data reported quarterly at the area level
• Once IMb adoption is sufficient, measurement
  process similar to commercial letters and flats

Start-the-Clock Stop-the-Clock
FAST appointment and container scans Delivery date reported by each systems monitors
12
Internal Measurement
Service Measurement

• Applies to
• Package Services
• Special Services
• Package Services rely upon Delivery Confirmation
  data (Retail and Bulk Entry)
• Data reported quarterly to the district level
• Special Services cover a broad range of products
  with distinctly different data

13
Special Services
Service Measurement

• PO Box Uptimes
• Percent on time reported quarterly to the
  district level
• Delivery Services (eReturn Receipt, Del Con,
  Certified, Registered, etc.)
• Scans available within 24 hours of scanned event
  reported quarterly to the district level
• Insurance Claims, CONFIRM, Money Order Inquiry,
  Address Correction Services, Address List
  Services
• Reported quarterly at the national level

14
Service Measurement
Measurement Enhancements

• Implementing saturation flat mail measurement
• Home Depot method
• Start the clock saturation mail barcode scanned
  to indicate arrival at unit
• Stop the clock saturation mail barcode scanned
  when delivered
• Developing remittance mail analytics
• Supplements EXFC diagnostic data
• Uses sort plan data from postal processing
  equipment

15
Observations
Service Measurement

• Work in progress
• Multiple systems
• Cost implications
• Communication
• Monthly consultations with PRC
• Dialogue with customers, mailing community
• Bi-weekly SSMOC
• Results posted on usps.com

16
Annual Targets
FY09 Targets - Market Dominant Products
91.0
900
17
PQ1 Results
National Performance PQ 1, FY 2009
Market Dominant Mail Class Overnight On-Time Two-day On-Time Three-Five Day On-Time
Single-Piece First-Class Mail 95.6 91.9 85.7

M.D. Mail Class Within 1 day Within 2 days Within 3 days Within 1 day Within 2 days Within 3 days Within 1 day Within 2 days Within 3 days
Single-Piece First-Class Mail 99.1 99.6 99.8 98.1 99.3 99.7 95.8 98.5 99.4
Overnight
Two-Day
Three-Five Day
Source IBM Global Business Services
18
PQ1 Results
National Performance PQ 1, FY 2009
M.D. Mail Class On-Time Overnight On-Time Two-Day On-Time Three-Day
Presort First-Class Mail 91.2 87.8 84.2

M. D. Mail Class Within 1 day Within 2 days Within 3 days Within 1 day Within 2 days Within 3 days Within 1 day Within 2 days Within 3 days
Presort First-Class Mail 97.6 98.1 98.2 96.8 98.0 98.3 94.5 96.9 97.8
Overnight
Two-Day
Three-Five Day
Source IBM Global Business Services
19
Issues and Challenges
PQ1 Results

• Presort First-Class Mail
• Pilot data
• Limited district induction points
• Mostly letters
• Representation limited
• Customer identification possible
• Area level public reporting
• Remittance Mail to begin in 2009

20
PQ1 Results
National Performance PQ 1, FY 2009
Market Dominant Mail Class Percent On-Time
Single-Piece First-Class Mail International 86.2

Market Dominant Mail Class Within 1 day Within 2 days Within 3 days
Single-Piece First-Class Mail International 95.2 98.1 99.1
Inbound/Outbound
Source IBM Global Business Services
21
PQ1 Results
National Performance PQ 1, FY 2009
Market Dominant Mail Class On-Time Destination Entry On-Time End-to-End
Standard Mail 87.4 77.2

M. D. Mail Class Within 1 day Within 2 days Within 3 days Within 1 day Within 2 days Within 3 days
Standard Mail 93.9 96.7 98.0 85.7 90.5 93.5
Destination Entry
End-To-End
Source IBM Global Business Services
22
Issues and Challenges
PQ1 Results

• Standard Mail
• Mostly letters
• Limited induction points
• Excludes destination entry and saturation flats
• Representation limited
• Customer identification possible
• Area level public reporting

23
PQ1 Results
National Performance PQ 1, FY 2009
Market Dominant Mail Class On-Time
Periodicals 69.8
Market Dominant Mail Class Within 1 day Within 2 days Within 3 days
Periodicals 85.7 91.4 94.2
Source IBM Global Business Services
24
Issues and Challenges
PQ1 Results

• Periodicals
• Temporary process
• Very limited validation for start the clock
• Lack of rigorous reporter discipline
• Sampling error is a concern
• Address Change Service for FY 2009

25
PQ1 Results
National Performance PQ 1, FY 2009
Market Dominant Mail Class On-Time
Ground Package Services 64.7
Market-Dominant Mail Class Within 1 day Within 2 days Within 3 days
Ground Package Services 78.9 87.6 92.7
Source IBM Global Business Services
26
PQ1 Results
National Performance PQ 1, FY 2009
CONFIRM Address Correction Insurance Claims Processing Address-List Services Money Order Inquiry
On-Time On-Time On-Time On-Time On-Time
Special Services 97.1 59.4 76.4 100.0 97.4
Delivery Information Special Services Combined Score Post Office Box Up-Time
On-Time On-Time
Special Services 99.3 86.5
Source IBM Global Business Services
27
Issues and Challenges
PQ1 Results

• Special Services
• ACS customers converting to daily fulfillment
• Completion in Quarter 2
• Denominator programming changes will be completed
  for Quarter 2

28
Summary
PQ1 Results

• Standards in Place
• Measurement Systems Developed and Working
• Service Opportunities Identified
• Issues and Challenges Identified