USPS Unveils New Operational Model to Strengthen Postal Operations Network
The U.S. Postal Service is investing $40 billion in modernization, introducing a new operational model to improve service and competitive posture.
The United States Postal Service (USPS) is embarking on a transformative journey to strengthen its postal operations network. The organization has been designing its future transportation, processing, delivery, and retail network for the past two years and is now accelerating the implementation of this structure.
Historically, the USPS expanded its operations alongside the nation, growing the number of delivery units, processing facilities, and truck trips as mail volumes increased and customer needs evolved. However, with mail volume peaking in 2007 and declining steadily since then, the operational model that guided the movement of mail and packages became inadequate. The shift in demand towards package delivery and financial losses strained the organization’s ability to invest in its operations.
The USPS is now investing $40 billion in modernization, including a network formed around Regional Processing and Distribution Centers (RPDCs), Local Processing Centers (LPCs), and Sorting and Delivery Centers (S&DCs). This new model establishes a much more logical, reliable, precise, and efficient network to improve service and competitive posture.
Key Points of the New Operational Model
Regional Processing and Distribution Centers (RPDCs): These large facilities will process all originating mail volume and all package volume for a region. They will also serve as the conduits for national and regional transportation. Each RPDC will serve as the control point for its region, managing the flow of mail and packages that enter or leave its jurisdiction.
Local Processing Centers (LPCs): Each of the 60 RPDCs will be supported by LPCs. The primary role of these facilities will be to process destination letters and flats and transfer mail and package volume to the region’s delivery operations.
Sorting and Delivery Centers (S&DCs): These centers will replace many of the current 19,000 Delivery Units (DUs) by aggregating the operation of five to 10 DUs into one large facility, which can serve a wider geographical area and much broader customer base.
The USPS is enhancing its operational model with a combination of new and existing facilities supported by improved processes, workflows, and logistics. The goal is to ensure that service and operational excellence steadily improve. The network being built will rival that of the most sophisticated competitors, helping USPS win a much larger share of America’s shipping business and substantially improve the reliability, performance, and value provided to every sender and receiver of mail and packages throughout the country.
The USPS's new operational model is a part of the Delivering for America plan, which aims to meet or exceed 95 percent on-time service performance for all mail and shipping products once all plan elements are implemented. The USPS defines service performance as the time it takes to deliver a mailpiece or package from its acceptance into its system through its delivery, as measured against published service standards.
The USPS's recent third-quarter report for the fiscal year 2023 shows improved delivery performance across all main categories, with an average time of 2.5 days to deliver a mailpiece or package across the nation. 98% of the nation’s population currently receives mail and packages in less than three days.
The USPS's commitment to modernizing its operations and improving service reliability is a testament to its dedication to serving the American public and business customers. The new operational model and the ongoing modernization efforts are expected to deliver continual improvements in service, reliability, and competitiveness.
Source: THE EAGLE VOLUME 2 · ISSUE 4