Transcription of USPS Future Business Model
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USPS Future Business Model
usps Future Business ModelMarch 2, 2010 mckinsey & Company1|Contents Recent context Base case minimal management actions Addressing the challenge Short term requirementsMcKinsey & Company2| usps is experiencing unprecedented losses SOURCE: usps ; 109-435 (PAEA) profit/loss$ billionsPostal Act 2006 signed into lawNote: All years in this document refer to Fiscal Years ending on Sept 301 Includes one-time $4 billion deferral2 Per 2010 Integrated Financial Plan (January Year-to-Date results are favorable to Plan) pre-funding,$ billionsKey drivers Revenue declines due to: E-diversion of First-Class Mail Down-trading from First-Class to Standard Mail Losses of advertising mail due to the recession RHB pre-funding requirement introduced by the PAEA Cost savings, while substantial, have been less than revenue declines due to high fixed costs of the networkNo rate increase 2003-2006 Recent ContextMcKinsey & Company3|Losses have been driven by volume declines, RHB pre-funding requirements and limitations on cost deferralCost pre-funding of change in net income 2006 vs.
McKinsey & Company 2| USPS is experiencing unprecedented losses SOURCE: USPS; P.L. 109-435 (PAEA)-7.82 2010 0.9 05 1.4 04 3.1 03 3.9 02-0.7 01-1.7 2000-0.2 06-2.8 07 09-5.1 08-3.8 Net profit/loss $ billions Postal Act 2006 signed into law Note: All years in this document refer to Fiscal Years ending on Sept 30 1 Includes one-time $4 billion ...
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