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2015 Report on Form 10-K United States Postal Service 4
Research and Development
We operate a research and development facility in Virginia for design, development and testing of postal equipment and
operating systems. We also contract with independent suppliers to conduct research activities. While research and development
activities are important to our business, these expenditures are not material to our financial statements.
Intellectual Property
We own intellectual property that includes trademarks, service marks, patents, copyrights, trade secrets and other proprietary
information and routinely generate intellectual property in the course of developing and improving systems, services and
operations. While legal protection for intellectual property and proprietary information is significant to our success, the
knowledge, ability and experience of our employees and the timeliness and quality of service we provide are more significant.
Marketing
Our marketing program seeks to capitalize on our industry standing, including our existing relationships and our reputation
based on our service delivery performance every day. We have adjusted to changes in customer behaviors and demands to
make accessing and using postal services more convenient. We have developed innovative mobile applications which enable
customers to locate a post office, find a ZIP Code, track packages and shop online. Online service offerings available through
www.usps.com have also enhanced the customer experience.
We believe that as we work with businesses to equip them with tools to reach our mutual customers, our revenue will grow.
Our marketing approach highlights our value, our enhanced digital technologies and the linkages between them. Additionally,
we seek to maintain our name recognition through the use of media advertising, trade shows, technical seminars and direct
mailings.
We have key strategic alliances with large transportation corporations to provide distribution and delivery services allowing
us to serve our respective customers’ needs. Maintaining these alliances is crucial to sales development and growth as they
often provide us with introductions into new markets.
Competition
A wide variety of communications media compete for the same types of transactions and communications that historically
were conducted using our mailing services. These competitors include, but are not limited to, newspapers, telecommunications,
television, email, social networking and electronic funds transfers. The package and express delivery businesses are highly
competitive. The primary competitors of our Shipping and Packages services are FedEx Corporation and United Parcel Service,
as well as other regional and local delivery companies. Our Shipping and Packages business competes on the basis of the
breadth of our service network, convenience, reliability and economy of the service provided.
Seasonality
Mail volume and revenue are historically greatest in the first quarter of our fiscal year, which includes the fall holiday mailing
season, and lowest in the third and fourth quarters of our fiscal year during the spring and summer. In general election years,
direct mail may be heavily used by political organizations to reach their targeted audiences, thereby generating temporary
volume increases during the months preceding an election.
Employees
At September 30, 2015, we employed approximately 492,000 career employees and approximately 130,000 non-career
employees, substantially all of whom reside in the U.S. For a more detailed discussion of items that impact our employees,
see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Results of Operations,
Operating Expenses.
BARGAINING AGREEMENTS
Approximately 91% of career employees are covered by collective bargaining agreements. These agreements include
provisions governing work rules, while providing for general wage increases plus cost of living adjustments (“COLAs”),
which are linked to the Consumer Price Index – Urban Wage Earners and Clerical Workers (“CPI-W”), as well as provisions
that limit our ability to reduce the size of the labor force and restrict the number of non-career employees. Our labor force is
primarily represented by the American Postal Workers Union, AFL-CIO (“APWU”); the National Association of Letter
Carriers, AFL-CIO (“NALC”); the National Postal Mail Handlers Union, AFL-CIO (“NPMHU”) and the National Rural Letter
Carriers Association (“NRLCA”).