Postal Service begins expanding into 1500 Staples

October 29, 2014

The Postal Service announced back in July that it was ending its pilot program to put mini-post offices in Staples stores.  The 82 postal counters it had set up last October would be transitioned to the Approved Shipper program, which has been around for years without causing much controversy.  (The Postal Service explained the transition in this blog post.)

At the time, it seemed like the Postal Service was looking for a graceful way out of the pilot because of all the protests it had caused.  But now the Postal Service is expanding its presence into all 1,500 Staples.  

Earlier this month, the Postal Service sent a letter to the APWU informing the union that it would be moving into every Staples store in the country as part of the Approved Shipper program.  

The Postal Service included a list of the Staples stores, along with the launch date for each location.  You can find an easier-to-use list of Staples stores here, and a map, here.  For more about the history of the Staples deal, see these previous posts.  We've also made a list and map of nearly 1,400 Staples showing the post office in the same zip code and the distance between them.

Staples already offers UPS shipping services, so also selling some USPS products would be typical of an Approved Shipper.  These Approved Shippers are businesses like Goin Postal and Shipping Depot that offer products and services from the Postal Service, FedEx, UPS, DHL, and whomever else they want to partner with.  They usually make their money by putting a surcharge on the regular price charged by the delivery service.  (They usually don't give customers big discounts on USPS products, like Staples was doing last summer as part of the pilot — discounts made possible by a secret Negotiated Service Agreement.)  The Approved Shipper stores make a point out of giving the customer a choice, and they don’t typically identify themselves primarily as USPS providers.

The USPS presence in 1,500 Staples may turn out to be something different, however.  The photo above shows a new sign in the Kips Bay Staples Store at 574 Second Avenue in New York City.  This location wasn’t part of the pilot of 82 Staples, so it’s an example of the new expansion.  As you can see, the sign doesn’t give the impression that the Postal Service is just part of an Approved Shipper counter.

You get the same impression when you go to Staples’ Store Locator website.  The locator allows you to select from six store features you may be looking for — mobile phones, computer workstation, buy online with pickup in stores, etc.  One of the six features is “U.S. Postal Service.”

When the Postal Service said in July that it was not going ahead with the Staples pilot, the APWU called the announcement a “ruse.”  "This attempt at trickery shows that the 'Don't Buy Staples' movement is having an effect,” said APWU President Mark Dimondstein.  “We intend to keep up the pressure until Staples gets out of the mail business.”

It looks like Mr. Dimondstein was right.  The Postal Service may have retreated from the pilot to put mini-post offices in 82 Staples, but it is going right ahead with expanding into 1,500 Staples, just under a different program.  Within a few weeks, a sign like the one in the Second Avenue Staples store will be showing up in Staples across the country.

The Postal Service is moving full speed ahead to put postal counters in big box stores.  You can add these 1,500 Staples to the 2,000 Walmarts that are getting a Goin Postal store, also under the Approved Shipper program.  That’s 3,500 new places to do business with the Postal Service.  It also represents a dramatic increase in the number of Approved Shippers.  There are currently about 6,000; there will soon be nearly 10,000.

The USPS Office of Inspector General is currently doing an audit investigation to determine whether the Postal Service maintains adequate oversight of the Approved Shippers Program.  That oversight is about to get a lot more complicated.

Postal management says that expanding into big box stores is all about “customer convenience,” but the real goal is clear enough: Build up the network of alternate retail access channels so it’s easier to close post offices, and replace union jobs in post offices with low-paid workers in big box chains.  Along with closing processing plants, shifting to cluster boxes, making private deals with companies like Amazon, and selling off postal properties, it’s just another phase in the privatization of the Postal Service.

(Photo credit: Kevin Walsh, Dir. Org. NYMAPU)

Canada converts 100,000 customers to cluster boxes, only 4.9 million to go

October 24, 2014

Canada is getting cluster boxes, and lots of them.  This week Canada Post rolled out it plan to replace home delivery at the door to centralized delivery at a cluster box down the block.  Nearly 100,000 residences, plus over 3,300 businesses, have been converted so far.  Over the next five years, Canada Post hopes to switch a total of 5 million addresses from door delivery to what Canadians euphemistically call "community mailboxes" (CMBs).  Here in the U.S., they're just called Cluster Box Units (CBUs).  

Canada Post says it will save between $400 and $500 million a year by switching over to cluster boxes.  The savings will come from eliminating 6,000 to 8,000 jobs for the postal workers who walk the streets delivering mail to the door.  

But Canada Post has a long way to go.  The first wave of conversions represents just 2 percent of the goal of 5 million addresses, and there will be little to no savings during the early stages of the program, due to the cost of installing thousands and thousands of cluster box units at an average of $800 each.  (Canada Post outsourced the contract for manufacturing the units to a company in Kansas.)

The plan was first announced last December.  As discussed in a STPO piece, "Canada gets cluster-boxed: Why it can’t happen here," it didn't seem likely then that the USPS would follow Canada Post's example anytime soon.  It still doesn't seem likely.

There are just too many obstacles in the way of mass conversions, not the least of which is customer opposition.  The Postal Service has a policy of not converting customers without their permission, so there are basically three ways to increase centralized delivery: (1) require cluster boxes in new housing developments (customer permission not required); (2) ask for voluntary cooperation from businesses and residents; and (3) determine that the safety of the letter carrier can be ensured only by replacing door or curb delivery with a cluster box.

The Postal Service is using all of these methods to increase the use of cluster boxes, and over the past few years there’s been a steady stream of news articles about threatening dogs and bad road conditions leading to non-voluntary conversions, and about the residents of a new housing development, like this one in Pennsylvania, learning that the Postal Service won’t deliver to their curbside mailboxes and will require the developer to put in cluster boxes.

Despite these efforts, the mail continues to be delivered in much the same way as it has been.  According to a recent GAO report on Delivery Mode Conversions, voluntary conversions aren’t having much impact.  The USPS reported that in 2013, just over 43,000 out of about 5.6 million business door delivery points — or about 0.8 percent — were voluntarily converted to cluster boxes,  Just over 36,000 out of 32.2 million residential door delivery points — about 0.1 percent — were voluntarily converted to cluster boxes. 

Between 2008 and 2013, the number of addresses with cluster box delivery increased by 10 percent, but that was due largely to an overall increase in the number of delivery points.  In terms of total delivery points, the proportions have remained essentially the same over the past five years, as shown in this chart included in the GAO report:

Sold American: An inventory of USPS disposed properties, 2009-2014

October 20, 2014

The Postal Service has sold over 500 properties over the past five years, but it hasn’t released much information about the disposals.  A few weeks ago, however, the Postal Service finally updated its Owned Facilities report, so it’s now possible to learn more about which properties have been sold off.

The overall scope of the disposal program has not been a mystery.  The Postal Service’s annual 10-K reports provide some basic information about the number of facilities it owns and its proceeds from property disposals.

According to the 2013 10-K, the Postal Service owned 8,598 facilities; in 2009, it owned 8,419.  That represents a net decrease of 202 facilities.  This doesn't include other types of property, like parking lots and land, that have also been sold.

The 10-K reports also provide numbers for the proceeds from the sale of property and equipment (but not separated to show just property). The proceeds totaled $158 million in 2013, $148 million in 2012, $137 million in 2011, $70 million in 2010, and $33 million in 2009.  That adds up to about $546 million in revenue. 

That’s about all one can find about the disposals in the 10-K reports.  In order to learn more, we’ve compared two versions of the USPS Owned Facilities lists, one compiled back in 2009 (or thereabouts), and one published just a few weeks ago. These are state-by-state lists of all the properties owned by the Postal Service, which are provided to the public under the Freedom of Information Act.    (There’s also a set of reports for Leased Facilities.)

The current lists of Owned Facilities came out in September 2014.  They were probably updated sometime in August 2014, as indicated by the fact that they don’t reflect some recent sales, including the Bronx GPO and the Union Square post office in Somerville, Mass.

These new facilities lists can be found on the USPS website here.  For easier viewing, we’ve put them on Google Docs here.  A list that merges all the individual state lists into one big list can be seen as a Fusion Table here; a map is here; and an Excel version, with links to Google Maps for each property, is here.

The previous version of the Owned Facilities lists seems to have been updated sometime in 2009.  (The Illinois list shows that the Postal Service still owned the main post office in Chicago; the sale of this facility closed in October 2009.)  You can see these previous lists on Google Docs here.  The merged list of all owned properties back in 2009 is here.

By comparing the two big lists, we’ve developed a list of 516 properties that have been disposed of over the past five years or so.  You can see this list here.

Of the 516 properties sold over the past five years, about 100 were post office buildings.  In many cases, the Postal Service opened a replacement office somewhere in the community, so the closure was classified as a "relocation."  In a few cases, the Postal Service leased back space in the building from the new owner, so the post office's retail business was able to remain in place.

About 40 of the 100 post offices sold over the past five years were historic buildings on or eligible for the National Register of Historic Places.  (Eligibility means that the building is at least fifty years old.)  While this represents a relatively small portion of the Postal Service's real estate holdings, the sales have generated a huge amount of controversy, from Berkeley to the Bronx.

The sale of 40 historic post offices is somewhat more than previous studies have found.  For example, the USPS OIG found 22 historic properties were sold between October 2010 and June 2013; that report is here

The Postal Service also provided a list to the Advisory Council on Historic Preservation to help with its study of the sale of historic post offices.  It contained 13 historic post offices sold in calendar years 2012 and 2013, plus 15 up for sale.  This list appears on pages 24-25 of the ACHP report, here.

Based on the USPS facilities reports, the OIG report, the ACHP report, and many news reports, we’ve put together a comprehensive list of historic post offices that have been sold since 2009, that are currently for sale, or that are under consideration for disposal.  That list is here.  It contains nearly 100 historic post offices.

Next in postal privatization: Goin Postal counters in 2,000 Walmarts

October 15, 2014

The Goin Postal pack-and-ship company has signed a deal to put small postal stores inside of 2,000 Walmarts.  While the Postmaster General will probably say it's all about customer convenience, the deal represents yet another step in the privatization of the Postal Service. 

These postal stores, it should be noted, aren’t exactly the same as the mini-post offices that the Postal Service tried piloting in 82 Staples late last year.  The Staples counters were more like contract postal units in that they sold only USPS products and services and they charged regular USPS prices.  The Goin Postal stores are part of the USPS Approved Shippers program, which consists of stores that can also offer FedEx, UPS, DHL, and anything else they want.  They make their profit by charging a fee on top of the USPS pricing.

By expanding its network of “alternate retail channels” — whether through Village Post Offices in convenience stores, stamps on consignment at retail chains, online transactions on usps.com, postal counters in Staples, or an Approved Shipper counter in Walmarts — the Postal Service has been encouraging its customers to do business at places other than regular brick-and-mortar post offices. 

In the short run, that means the Postal Service can save money by reducing the number of clerks in post offices and by cutting the hours of operation, as it’s done with POStPlan, the initiative to shorten hours at 13,000 small post offices. 

While the Postal Service likes to be coy about it, there’s no question that expanding alternate access is about cutting costs.  As a USPS memo about the Staples pilot stated, “The Pilot will be used to determine if lower costs can be realized with retail partner labor instead of the labor traditionally associated with retail windows at Post Offices.”

Along the same lines, in a Nov. 8, 2011, letter to the Government Accountability Office (GAO), a USPS vice president wrote, “Over the last five years, our current retail strategy has resulted in an increase in alternate access revenue from 24% to 35% of our total retail revenue.  This is one of the contributing factors that enabled operations to reduce window work hours by 23.7% during the same period of time.”

In the long run, the agenda of expanding retail access in private businesses is the same as it’s been for years — to close thousands of post offices.  Study after study has recommended closing brick-and-mortar post offices and replacing them with counters in private retailers.  

As the Postal Service states in a typical press release, “With nearly 100,000 places to buy stamps, ship a package or renew a passport, the U.S. Postal Service is expanding customer access to its products and services. It’s not about brick-and-mortar Post Offices anymore, as postal products move online and into retail outlets, grocery stores, office supply chains and pharmacies.”

The 2,000 Walmarts slated to get a Goin Postal store represent just under half of the 4,400 or so Walmarts in the United States.  (A list and map of them are here.)  There's no word yet about Goin Postal or another business expanding into the remaining Walmarts or other big box stores, but that's clearly the direction things are going.

 

Goin Postal Goes Walmart

Goin Postal is a franchise chain of retail shipping & receiving stores based in Zephyrhills, Florida.  The company has already arranged for its current franchisees to put stores in 500 Walmart locations, and it is currently looking for people who want to start a store in one of the other 1,500 Walmarts available for a postal counter. You can see a list of 1,350 of these Walmarts here and a map here.  

There's another map showing the USPS post offices in the same zip codes as most of these Walmarts here.  This map shows about half of the 2,000 Walmarts slated to get a Goin Postal store and it has some errors, but it’s good enough to illustrate an obvious point: Where there’s a Walmart, there’s also a post office nearby.

At this point, there’s no evidence that the Postal Service had anything to do with arranging Goin Postal’s deal with Walmart, but it’s almost certain that postal management signed off on it in some fashion, since Goin Postal, as part of the USPS Approved Shipper program, probably couldn’t have made such a move on its own.

There are currently about 6,000 Approved Shipper retail outlets, so expanding into 2,000 Walmarts represents a significant increase.  This is just the kind of growth in alternative retail access that the Postal Service has been looking for.  

Originally, the Postal Service probably envisioned creating a network of contract postal units to replace post offices, but putting postal counters in Staples ran into a lot of opposition.  The Walmart deal looks to be the next-best thing — considering the reach of Walmart, maybe even better.

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