US Postal Service 2008 Annual Report Download - page 52

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52 | 2008 Annual Report United States Postal Service
Note 1 — Description of business
Nature of Operations
The United States Postal Service (we) provides a variety of
classes of mail service to the public, without undue dis-
crimination among our many customers. This means that
within each class of mail our price does not unreasonably
vary by customer for the levels of service we provide. This
fulfills our legal mandate to offer universal service at a fair
price. We conduct our operations primarily in the domestic
market, with international operations representing approxi-
mately 3% of our total revenue.
Our services are divided into two broad categories: mail-
ing and shipping, which account for 89% and 11% of our
revenue, respectively. Two lines, First-Class Mail and Stan-
dard Mail, account for about 94% of our mail volume, while
Priority Mail and Express Mail represent significant services
we provide in our shipping category. The principal markets
for our services are the communications, distribution, de-
livery, advertising, and retail markets. Our services are sold
and distributed through almost 37,000 Post Offices, sta-
tions, branches, contract postal units, and a large network
of consignees.
Our labor force is primarily represented by the American
Postal Workers Union (APWU), National Association of Let-
ter Carriers (NALC), National Postal Mail Handlers Union
(NPMHU), and National Rural Letter Carriers Association
(NRLCA). More than 85% of our career employees are cov-
ered by collective bargaining agreements.
By law, we also consult with management organizations
representing most of the employees not covered by col-
lective bargaining agreements. These consultations provide
an opportunity for nonbargaining unit employees in the field
to participate directly in the planning, development, and im-
plementation of programs and policies affecting managerial
employees in the field.
Postal Reorganization
We commenced operations on July 1, 1971, in accordance
with the provisions of the Postal Reorganization Act. We
are an “independent establishment of the executive branch
of the Government of the United States.” Governing deci-
sions are made by a Board of Governors, which consists
of nine members who are appointed by the President with
the advice and consent of the Senate, plus the Postmaster
General and Deputy Postmaster General.
The equity that the U.S. government held in the former Post
Office Department became our initial capital. We valued the
assets of the former Post Office Department at original cost
Notes to the Financial Statements