U.S. Postal Service:

Sustained Attention to Challenges Remains Critical

T-GGD-00-206: Published: Sep 19, 2000. Publicly Released: Sep 19, 2000.

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Bernard L. Ungar
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Pursuant to a congressional request, GAO discussed the Postal Service's (USPS) overall performance as well as the challenges that persist as mail volume growth continues to slow and competition from the private sector increases.

GAO noted that: (1) USPS has slightly improved its overnight First-Class Mail delivery performance, improved productivity, and implemented cost-cutting measures; (2) USPS has reported that it faces significant threats from electronic substitution and is planning for declining mail volumes, especially in First-Class Mail, in the coming years; (3) although it is difficult to predict the timing and magnitude of further mail volume diversion and potential financial consequences, USPS states that it is working to address this challenge by aggressive cost-cutting to achieve breakthrough productivity and by revenue generation; (4) a key oversight issue for USPS, Congress, and the American people is whether USPS is heading for financial shortfalls that could, in the long run, hinder its ability to carry out its mission of providing affordable, universal postal services that bind the nation together; (5) several continuing challenges facing USPS include improving productivity, controlling costs, enhancing revenues, and improving labor-management relations; (6) long-term increases in productivity will be essential for USPS' future success; (7) USPS recently reported to GAO that its productivity for fiscal year 2000 through mid-August had increased 2.2 percent; (8) although this would be the largest increase since 1993, it would translate into a cumulative increase of only 1.5 percent over the past decade; (9) questions for continued oversight include how and when USPS expects to achieve breakthrough productivity; and (10) another issue is whether USPS, unions, and management associations will be able to find a common ground to address long-standing problems in the workplace that may impede USPS' ability to improve its productivity.

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