November 2011


On Falling Mail Volumes, A Tale of Two Stories

Nov. 28, 2011

"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair." — Charles Dickens, A Tale of Two Cities

HOW FAST are mail volumes falling, and what's causing the declines?  If you've been listening to the Postal Service and reading the news, the answer is obvious: Faster than you can imagine, and all because of the Internet.  

Postal Service managers have told that storyline at thousands of public meetings on post office closings and plant consolidations, and it's been reported in thousands of news articles.  The line is repeated over and over again, like a magic mantra, and you'd be hard pressed to find anyone who doesn't believe it. 

To question the dominant narrative at this point seems like lunacy.  Does anyone really think that the Internet isn't putting the Postal Service out of business?  

But there is more to the story.  If you look closely at the projections the Postal Service is putting out, there are significant discrepancies, which suggests that they're basically just making up numbers.  The Postal Service is also offering conflicting explanations for the declining volumes, which suggests that they're less interested in trying to explain what's happening than they are in furthering an agenda — an agenda that is not being fully revealed.

 

Conflicting projections

Over the past couple of weeks, the Postal Service has produced two documents — the Form 10-K Fiscal Report for 2011, which came out on Nov. 15, and the Integrated Financial Plan for FY2012, which was released on Nov. 23.  Though issued a week apart, the two reports provide wildly divergent projections for mail volume in 2012.

The Form 10-K says, “Forecasting in the current economic environment is subject to significant uncertainties.”  That doesn’t stop the K-10 from coming up with an estimate: “The operational plan for 2012 anticipates a reduction in mail volume of approximately 8 billion pieces from 2011 levels with an associated drop in revenue of approximately $2 billion” (p. 69, bottom of the page; Italics added.)

The Integrated Financial Plan (IFP) offers a much worse projection: “In 2012, we anticipate total mail volume of 158.0 billion pieces, a decline of 9.9 billion pieces or 5.9 percent from 2011” (p. 2).  (Italics added.)

So what are looking at for fiscal year 2012 — a drop of 8 billion pieces or 9.9 billion pieces?  Given how bad both projections are, that discrepancy might not mean much, but that’s a big difference.  A couple of billion pieces comes to more than half a billion dollars — way more than the $200 million the Postal Service says it would save by closing 3,650 post offices next year.

How could the Postal Service issue two reports, a week apart, providing such different estimates?  It seems as though the Postal Service is pressing so hard to show how bad things are getting, it’s not satisfied with one awful projection and has to come up with an even worse one a few days later.  The Postal Service can’t even keep its own numbers straight. 

And where are these predictions coming from, anyway?  Last year, the Postal Service asked the Boston Consulting Group to make projections for the next ten years.  In March 2010, the BCG report predicted total volumes would decline at a rate of between 1.5% and 3.4% a year, with First-class declining between 3.7% and 4.7% a year. 

Now that the actual numbers for 2011 are in, we find that from 2010 to 2011, total mail volume declined 1.7% — near the low-end of the range projected by BCG (K-10, p. 18).  Given that the economy is still bad and that BCG had assumed it would be better, one would have expected a much steeper decline.

On what basis, then, is the IFP now predicting a whopping 5.9% decline in total volumes for 2012?  That is almost twice as bad the worst-case scenario predicted by BCG.  The IFP says its projections are based on a "weak economic outlook," but it says nothing about falling back into a deep recession like the one that caused the earlier steep drop.

First-class mail is suffering the most, and the actual drop from 2010 to 2011 — 6.3% — was worse than the worst-case scenario predicted by BCG (4.7%).  But why is the Postal Service now predicting an even worse decline of 8.6% for 2012? 

No one knows how things are going to go in 2012.  The way the economy is looking, perhaps we’re in for a double-dip recession, and volumes will decline just as badly as the Postal Service is predicting — or worse.  (The preliminary numbers for October 2011 do look bad.)  But the Postal Service’s projections do not assume another steep downturn.  They just seem to come out of nowhere.

 

Cyclical events and secular trends

The Postal Service is not just making up inconsistent projections.  It is also offering two contradictory explanations for the drops. 

These declines are being caused primarily by two factors — the ailing economy and the shift to the Internet for advertising, bill paying, email, tax returns, and so on. The first cause is considered a “cyclical event” — the economy is always going through periods of growth and recession — and generally speaking, companies try to ride out the bad times without resorting to permanent, large-scale downsizing.  In contrast, the Internet effect, or what the Postal Service calls “electronic diversion” or “substitution,” is a “secular trend,” and it’s permanent, so you can’t ride it out, and you need to make more serious — but gradual — adjustments.

The question, then, is: How much effect is each of these two causes having on mail volumes and revenues?

Dear Santa, Please send the Post Office a miracle

November 27, 2011

A GUEST POST, BY SHERRI MADDICK

Every holiday season TV stations run the fabulous 1947 classic film, "Miracle on 34th Street," starring 9-year-old Natalie Wood.  In the movie, there is a nice old man (Edmund Gwenn) who plays Santa at Gimbels Department Store in New York City.  He says his real name is Kris Kringle, but he is threatened to be institutionalized because he really believes he is Santa.  Only his friend (Maureen O’Hara), who works in the store, and her lawyer friend (John Payne) can save him only by magically proving that he really might be Santa Claus.

At the climax of the film, all the letters to Santa, written by children all over the world, are sent to the court house, where the trial of “Kris Kringle” is taking place.  Not to ruin the ending for you, but the lawyer wins the case because the Post Office, "an official agency of the United States government," delivers the letters directly to the courthouse, thus proving Kris Kringle is the actual Santa.

So I am thinking about this Christmas and a possible meltdown of the postal system.  Where are all the letters to Santa going to go?  Are we going to tell children all over the United States that they now have to EMAIL Santa? You have got to be kidding.

Listening to the endless threats about firing postal workers and closing small and historic post offices around the country, I am hoping that people come to their senses, get creative, and do their jobs, before the childhood tradition of writing letters to Santa becomes extinct.

While I was thinking about “Miracle on 34th Street,” I also could not help but think about another holiday staple, the mailing of Christmas and Chanukah cards.  I have been personally making my own cards for many years, using crafty items such as embellishments, stickers, and rubber stamping techniques.  I sit for days making these cards, and no two are alike.  I get giddy with the thought that people actually look forward to getting a holiday card from me.  Often as I am creating them I think, “That one is perfect for my sister” or “Andy would love that one.”

I put a lot of time and effort into those cards, and it’s very personal.  Each card is like a gift in itself because it comes from my heart.  After all of them are complete, I decorate the outside of each one, checking the addresses of the recipient and placing the holiday postage stamps on them so they are not crooked.  Each one is signed by me and bears a sticker for my card-business name that I never had the time to pursue full-time - Cards with Heart.  In crafty circles, these kinds of creations are called "mail art," and there are many more people like me out there that do the same thing.

I do this all year long, for birthdays, anniversaries, and so on.  People so appreciate a handmade card.  I cannot imagine the world without real letters, real cards, and letters to Santa.

I want to know who is going to make the announcement that letters to Santa are over.  What will they say?  That there is no Santa?  That he moved from the North Pole and has no forwarding address?  Maybe Rudolph and the other Reindeer took a wrong turn?

Someone is going to have a lot of explaining to do.  Not only will we have millions of upset children, but parents all over America are going to have to concoct stories about why letters cannot be mailed to Santa.

If anyone knows the real Kris Kringle, please ask him if he has any ideas to help out the postal system because it’s right about now that we truly need a Miracle — not just on 34TH Street but on every street in America.

(You can leave a comment for Sherri, or send a note of thanks to postal workers, on the ""Send the Love" comment page, here.)

Week in Review: The discontinuing continues

November 27, 2011

A couple of weeks ago, word leaked out that the Postal Service would put a temporary suspension on post office closings and plant consolidations to avoid problems during the holiday season.  The suspension was supposed to go into effect on Friday, Nov. 18, but some offices closed on Saturday and early the following week — right before Thanksgiving.  There's more evidence this week that the closing procedures are a mere formality — a "done deal" — and there are also news reports that the USPS managers running the public meetings are blaming the Postal Regulatory Commission for the final decision to close a post office.  There was another dissenting opinion on a closing decision from the PRC chairman, but overall, the PRC seems reluctant to challenge the Postal Service's decisions.  The only good news this week is that a few communities have heard their post office is off the closing list.  Here's a roundup of the week's news:

Something to be thankful for: On this Thanksgiving weekend, let us all give thanks to George Will, the Pulitzer-Prize-winning conservative columnist who always has the wisest word on any topic.  This week, we are blessed that Mr. Will gave a moment’s thought to the problems of the U.S. Postal Service.  As Occam’s' razor tells us, the simplest answer is usually the best, and Mr. Will has a beautifully elegant and simple solution to the postal crisis: privatize the Postal Service.  Just because the Constitution authorizes the government to establish post offices, Mr. Will observes, doesn’t mean it must: “Surely the government could cede this function to the private sector, which probably could have a satisfactory substitute system functioning quicker than you can say ‘FedEx,’ ‘UPS’ and ‘Wal-Mart.’”  The idea is so brilliant, it’s hard to understand why no one has thought of it before.  “All three are for-profit enterprises,” Mr. Will continues, “so they have an incentive to practice bourgeois civility — to be helpful, even polite. These attributes are not always found at post offices.”  It’s just this kind of eye-opening analysis that earns Mr. Will something on the order of $1.5 million a year, and he’s worth every penny.  Thank you, Mr. Will.  (For a thoughtful reply to Will, check out the post on Dead Tree Edition.)

Free’s not good enough: The post office in Clearwater Beach FL is being studied for closure as part of the Retail Access Optimization Initiative (RAOI), but it looks like the Postal Service is not bothering to gather all the facts before making a decision. The lease ran out on Sept. 30, and the Postal Service, acting through a Dallas real estate specialist, had asked for a four-month extension at a reduced rent (from $3,400 a month to $3,200).  The city, which owns the building, said yes, even though that’s half market value.  Then the Postal Service asked to rent the building for free.  Before the city could decide what to do, the Postal Service specialist wrote back to say never mind: “We don't need to pursue this any further," read the email.  Apparently Postal Service operations decided they weren’t going to keep the post office open after all.  In spite of that, there was a public meeting on Tuesday, Nov. 22, and the USPS representatives said the decision had not been finalized.

A town unglued: The post office in Chamberlain ME had its public meeting on Monday, Nov. 21.  Citizens brought up numerous reasons why they were upset about the post office closing, but opposition focused on the post office's role as a community meeting place.  "You're eliminating the village of Chamberlain," one resident said. "Because I meet so many of my neighbors at the post office, to me that was part of being in the community and that's going to go away.  The post office is the center of Chamberlain. It is Chamberlain.” "It is the glue that holds us all together," added another.  But for the Postal Service, there are more important things than holding communities together.  The USPS representative said closing the post office would save $280,000 — over a ten-year period.  Even that minimal savings, however, may be an overestimate because there are still three years left on the lease, and it looks like the Postal Service will have to pay it off.

Getting rid of the evidence: The post office in Literberry IL closed on Tuesday, Nov. 22, in spite of the suspension on post office closings that went into effect on Friday, Nov. 18.  The town also lost its zip code. “We’re in the process of emptying out drawers, there’s some accountable stuff that has to be taken care of and everything else will be destroyed,” said the officer-in-charge. “When we’re done there will be no evidence the post office was even here.”

The New York Times Editorial: How many things can you get wrong in 300 words?

November 25, 2011

The New York Times welcomes the holiday season with a 300-word editorial entitled “Overhauling the Post Office for the 21ST Century.”  The piece gets so many things wrong that it would be laughable if it weren’t so maddening.  It’s really the Times’ editorial staff that ought to overhauled.

 

On five-day delivery

First, the Times calls the request from management to end Saturday delivery “reasonable,” and says it would save $3 billion a year.  But the Postal Regulatory Commission — the agency responsible for regulating the Postal Service — took up the issue of five-day delivery in an Advisory Opinion issued in March 2011.  Based on data provided by the Postal Service, the PRC found that the cost savings would be far less than the Postal Service claimed — more on the order of $1.7 billion.  (The Postal Service never challenged the PRC's analysis.)

More important — and the Times says nothing about this — the PRC found that eliminating Saturday delivery would have many adverse effects.  It’s not just about the inconvenience of not getting your mail on Saturday.   Cutting Saturday delivery would also cause 25% of First Class and Priority mail to be delayed two days.

Add that delay to yet further delays caused by consolidation of 500 mail processing plants down to 135 facilities (120 P&DC's and 15 hubs) — a plan now being implemented — and delivery times will slow down even more.  If you’re used to seeing your mail delivered in one or two days, think three or four, or more.  Eliminating Saturday delivery would also hurt some people more than others, like people in rural areas and small businesses, or people waiting for medicine or perishable matter.

Given all the problems with cutting Saturday delivery, you have to ask, who's behind it?  In the PRC Advisory Opinion, one of the main advocates was Valpak, the direct mail company that sends you the blue envelope filled with coupons.  And why would they back five-day delivery?  Simple.  Anything that keeps the Postal Service's costs down also keeps postage rates down.  Valpak and many others in the bulk mail industry don't care if you get their mailings on Saturday or Tuesday or whenever, so long as the rates they pay are as low as possible.  Apparently the New York Times doesn't care when you get its newspapers delivered either.

 

On Village Post Offices

The Times goes on to say, “Congress needs to produce a bill that allows the Saturday shutdown as well as the closure of up to 3,700 local post offices where service would be continued through automated outlets at neighborhood businesses.”

It’s hard to imagine where the Times got the idea that the Postal Service wants to replace 3,700 post offices with “automated outlets at neighborhood businesses.”  The Times must be referring to the “Village Post Office” concept — the Postal Service’s plan to contract with a local business so it can provide basic postal services.  But this concept has nothing to do with automation.  It’s not about putting an “automated postal center” or postal kiosk in a business. 

Rather, the Village Post Office is about allowing a local business to sell stamps and flat-rate boxes.  And that is all a Village Post Office can do.  The folks working in the local business cannot weigh packages, do registered or express mail, sell money orders, or any of the other things a post office does.  In other words, a Village Post Office is not a post office at all.  It’s just a place to buy stamps.

The idea for the Village Post Office was released last August amidst much ballyhoo about what a great new “concept” it was.  It would save the Postal Service money and help a local business bring in new revenue.  (The business is paid a couple of thousand dollars per year but makes no money on the stamps or flat-rate boxes.)  Supposedly people coming in for stamps would buy something else.  Forget about the fact that in a small town, people are going into that local business anyway.

Grand as it all sounded, the Village Post Office idea ran into a little trouble, and so far, some four months later, the Postal Service has established just five VPOs.  Turns out a large number of the 3,700 communities where the Postal Service planned to locate a VPO didn’t even have a business where you could put one.  The Postmaster General has recently backed off the concept and said he needed to find an alternative to this alternative.  

(It’s possible the Postal Service has leaked to the Times that its newest concept is to put 3,700 automated kiosks in local businesses, but if that’s the case, the Times has buried a terrific scoop inside a silly editorial.)

 

On post office closings

The Times also makes it seem like the Postmaster General is interested in closing only 3,700 post offices.  That is the number of offices on the Retail Access Optimization Initiative (RAOI), the plan released in July that is now being reviewed by the PRC, as it's being implemented by the Postal Service.  (Actually, the original number was 3,650, and about 200 have already been removed from the list.) 

However, far more than 3,700 post offices are going to close.  In a recent article in Time.com, the Postmaster General is quoted as saying, “We'll probably look at 15,000 post offices rather than just 3,700.”  That’s half the country’s post offices.

And it’s not as if the Postal Service is waiting on the PRC’s Advisory Opinion or new legislation to get the process started.  A few days ago, the Postmaster General told the National Press Club that the Postal Service had closed 500 post offices this year.  At least a hundred more have received a “Final Determination” notice saying they would close in 60 days.  There’s a temporary suspension on closures until January 3rd, but those post offices will close soon after the New Year.

While many of the closures have been reported in the local news, there’s been little attention in the national media to these closings.  The Postal Service has not even produced a list of the closings.  In Great Britain, where they have closed over 7,000 post offices over the past few years, there’s a phenomenon called “the secret closure programme” — closings that happen “quietly,” under the radar of the media.  The same thing is happening here.

The cost savings from closing post offices is surprisingly small.  The Postal Service says closing the 3,650 offices on the RAOI list would save $200 million a year — about 0.3% of its annual budget — and even that estimate may be inflated.  As we’ve seen in the appeals on closings that communities have brought to the PRC, the amount of savings for closing an individual office is consistently inflated by the Postal Service, and several closing decisions have been questioned by the Commissioners for precisely that reason.

Now, closing 15,000 post offices might realize more significant savings, perhaps over a billion dollars a year.  But at what cost, and at whose expense? 

Think about all the extra driving closing half our post offices would cause, all the fuel consumption, pollution, and gas money and extra time each person would need to spend on postal matters.  Think about the harm to small businesses that go to the post office once or twice a day.  Think about all the people who walk to the post office, like seniors or people who don’t have a car, who won’t be able to get to a post office at all.  Think about the communities — small rural towns, inner-city neighborhoods, and suburbs too — that will lose an important social and economic hub.  For many towns, the post office is a nexus of its identity — close the post office, take away the zip code, and the place isn’t a place anymore.

 

On the legislation

The Times editorial also refers to the House bill, legislation crafted by Tea Party congressmen Darrell Issa and Dennis Ross on behalf of the right-wing, anti-government, anti-union 1% in this country — people like the billionaire Koch brothers, who are large campaign contributors to Issa and Ross and whose Cato Institute has been cranking out studies advocating the privatization of the post office for years.

The Best Postal System Money Can Buy

November 23, 2011

GUEST POST 

"Falling mail volume and soaring red ink may soon doom Saturday mail delivery and prompt three-day-a-week delivery within 15 years, Postmaster General warns." — (USA Today, July 19, 2011)

It had to happen.  In the year 2020 the Postmaster General went on television and announced to the country that because of a $600 billion USPS deficit and Congress’ refusal to permit him to charge $5 for a first-class stamp, the American people would only receive their mail one day a year.  This would be known as “Mail Day” and would be considered a national holiday.  He regretted the decision but assured the American people that they would still receive the best service of any postal system in the world, and he assured everyone that with only a few exceptions no one would be inconvenienced by it.

At first people were angered by the news, but pretty soon they accepted it as they have everything else the U.S. Postal Service has done to them.

In a few years Mail Day became as popular as Christmas and the excitement built up as the day came near.

Little children were told that if they were bad the mailman (he was pictured as a man in a blue uniform with a long white beard) wouldn’t bring them video games.  Department stores hired men to play the role of the mailman and men and women and children would sit on his knee and tell them what they wanted for Mail Day.

People decorated their doors and windows with old birthday and get-well card and put colored lights on their mailboxes.

The hit record played for weeks before Mail Day was Bing Crosby’s rendition of “I’m Dreaming of a Sears Catalog.”  There was a great deal of goodwill associated with the holiday.  Doormen and elevator operators and building superintendents became kinder and more attentive.  Charity organizations raised funds on the street for poor people who had no one to share their mail with.

Fraternal groups got together and walked through the streets singing mail carols.  The churches and synagogues stayed open on Mail Day Eve so people could pray for letters from their children.

When youngsters asked where the mailman lived, their parents told them he lived at the North Pole and he spent the entire year canceling stamps on letters and packages so he could leave them on Mail Day morning for them.  When they asked how he delivered the mail they were told he put it in bags and came down the chimney when everyone was sleeping.  Everyone locked up their dogs on Mail Day Eve.

On the morning of Mail Day the entire family came downstairs and opened their bags of mail.  Mothers got all the bills, father got all the newspapers and magazines that had piled up for the year.  There were letters and postcards and birthday cards and Christmas cards for everyone.  Grandmothers and grandfathers opened their Social Security checks.  Children gleefully ripped open the junk mail with four-color catalogs and appeals from Indian reservations that didn’t exist.  There were also packages from stores and mail-order houses and tax returns and alumni fund appeals.

It took all day for people to open the mail.  In the evening relatives came by to exchange canceled stamps and have Mail Day dinner with each other.  Every TV network put on a televised football game and there was a Muppets Mail Day special on TV.

For 10 years Mail Day was the most exciting day of the year.  But then in January of 2030 the Postmaster General appeared on television and said that because of rising costs and a $2 trillion USPS deficit the Post Office would be unable to deliver the mail once a year as it had done in the past. 

In the future, he said, mail would only be delivered one day, during leap year.  He felt in this way the Post Office could operate with more efficiency and still provide the services that so many people depend on.  But he warned that if congress did not raise the price of a first-class stamp to $49 a letter, the Post Office would have to take more drastic measures, which included only delivering the mail once every Bicentennial year.

By Art Buchwald. The Washington Post, March 21, 1976. 

*  *  *  *  *  *  *  *  *

The Buchwald piece is printed verbatim except for a few changes to bring it up to date — children will receive video games instead of "records of the month," everyone will watch the Muppets special instead of the Andy Williams holiday special (remember that?), and Buchwald's prediction was for 1980.  (The original article is here.)

The piece originally began with the quote, "'Post Office Threatens to Cut Down Deliveries to Three Times a Week' — headline in last week’s newspaper."

Buchwald wasn't making that part up — it was right out of the day's news.  Plans to reduce the frequency of mail delivery go way back.

In April 1977, for example, the Commission on Postal Services recommended that delivery be cut to five days — a recommendation based on a Nielsen survey that found that "six-day delivery, though convenient, is not considered essential by a great majority of our citizens, when compared with the costs of providing that service.  To the Nielsen survey, 80% found that five-day delivery would be acceptable."  

Other studies, however, questioned the wisdom of reduced service.  A USPS study done in 1980, for example, showed that eliminating Saturday delivery would cause the mail to pile up, and "the augmented workload on Monday would cause some of the mail available for delivery on that day to spill over until later in the week."  Other studies found that the hardest hit would be rural areas and postal employees, who would lose thousands of jobs.  

So here we are, over 30 years later, and the Postal Service is still talking about eliminating Saturday delivery.  And the Postal Service is still producing surveys that show customers won't mind, even though studies say what a bad idea it is.  

For example, last year the Postal Service asked the Postal Regulatory Commission for an Advisory Opinion about eliminating Saturday delivery.  The Postal Service cited focus groups it had conducted which showed that nearly everyone would prefer eliminating Saturday delivery to a 10% increase in rates.  There have been other recent surveys showing pretty much the same thing, such as this Rasmussen survey, which said that 68% of those surveyed favor cuts in delivery to keep stamp prices down.  

But the PRC's  "Advisory Opinion on Elimination of Saturday Delivery"  (March 2011) found that eliminating Saturday delivery would cause the mail to pile up on Monday and slow down delivery of First Class and Priority mail.  It would also have a seriously adverse effect on particular populations, such as rural areas and small businesses.  The PRC also expressed concern about the delivery of medicines and perishable matter, and it challenged the $3.1 billion cost savings the Postal Service had estimated and came up with its own, smaller estimate of $1.7 billion.

The more things change, the more they stay the same.  Except this time around, the Postmaster General may get his way.  

Have a Happy Thanksgiving.  And Good Mail Day.

(Image credits: Good Mail Day; mailman with beard.  The information about 1977 comes from The Postal Precipice: Can the U.S. Postal Service Be Saved, by Kathleen Conkey, Center for Responsive Law, 1983.)

Week in Review: AMPs, 10-K, PRC, CBRE, VPO, GAO & OWS

November 21, 2011

It was another busy week in Postal World — post offices keep closing, plant consolidation plans keep rolling on, the GAO keeps coming up with studies, and the PRC struggles to keep up with the appeals and Advisory Opinion.  Here are just some of the highlights:

Hearing in Harlem: The New York Metro Area APWU announced that on Tuesday, Nov. 22, there will be a hearing to discuss the closing of the Lincolnton post office in New York’s Harlem.  The meeting is at 6 p.m., but community members, postal workers, and union leaders will be assembling for an informational picket outside the station beginning at 5:30 p.m.The post office is located at 2268 Fifth Avenue at 138th Street.  (More info here.) [CORRECTION: The Lincolnton Station is not being studied for closure: the meeting was at Lincolnton, but it was about the nearby College Station, which is on the RAOI list.)]

AMP’d & Excessed: The Postal Service continues with its AMP consolidation studies.  In La Crosse WI, employees are being AMP’d and looking at a commute of over 150 miles to St. Paul MN.  Some employees were apparently excessed to La Crosse, and now they’re returning to their own plant.  The Williamsport PA plant had its public meeting on consolidation on Nov. 17.  A postal worker writes in to Save the Post Office asking, How will Harrisburg handle all the mail as well as that of other plants that may be closed?  It’s definitely going to mean delays — “not to mention all the families who depend on their jobs to pay their mortgages and raise their families and who cannot pack up & relocate.”  There’s a petition to save the Williamsport plant here, and more info here.)

It’s hard to understand why the Postal Service insists on playing musical chairs with processing plants.   Consolidation kills jobs, breaks up families, causes crazy commutes, and hurts communities.  It’s not even clear they save money.  This in-depth study concludes that “simply consolidating plants is not likely to be an effective strategy for restructuring the USPS network with the object of increasing aggregate productivity.  Most plant consolidations will actually decrease the volume that can be processed by the same equipment and labor force in the consolidated plants.”  For more on AMP studies, the Postal Service provides information about its “streamlining” plans here, and the APWU keeps its updates here.

No “undertaking” in Venice: Efforts to save the historic New Deal post office in Venice CA continue, but the Postal Service is sticking by its decision.  USPS VP David Williams informed citizens of Venice that, “while sympathetic” to their concerns, he would “not set aside the Postal Service’s prior decision.”  The National Historic Preservation Act requires federal agencies to consider the effects of their undertakings on historic properties, but the Postal Service does not consider closing the post office “an undertaking” that will change the character or use of the property.  Williams say an “undertaking” would occur only when the Postal Service adopts a plan to reuse the building or transfer it to private ownership.  An attorney has taken on the case on a pro bono basis, so perhaps the PRC will hear the case (an appeal has been filed) or maybe it will end up in court. Williams says no way, and his letter to Venice ends as follows: “This is the final decision of the Postal Service with respect to this matter, and there is no right to further administrative or judicial review of this decision.”  (More on the Venice fight here.)

Post Offices “in contract”: A couple of weeks ago, the Postal Service and its partner CBRE put up a new website advertising properties for sale.  On day one, there were 90 buildings listed, but today there are 48.  Perhaps the other 42 were removed because they were sold, but it might be because the Postal Service was in such a rush to get the site up it didn’t even have a photo for all the post offices it wants to sell.  (At least now the “About USPS” page doesn’t say “Under Construction” anymore.)  Several historic post offices have apparently found a buyer.  The site lists as “in contract” the post offices in Fairfield CT; the 31 Street in Washington DC; Gulfpost MS; and 358 West Harrison Street in Chicago, IL.  It’s really a crime that the Postal Service so undervalues the country’s architectural riches and is selling off these historic buildings on the cheap.

How much is the Postal Service worth?  Speaking of undervaluing postal assets, the Postal Service doesn’t seem to think any of its post office properties are worth much.  This week the Postal Service issued its annual financial report (Form 10-K) for fiscal year 2011 (ending Oct. 1).  Not surprisingly, the headlines focused on the $5 billion deficit, but there’s another number in the report worth a look — the value of USPS assets (buildings, land, equipment, and intellectual property).  The Postal Service owns over 8,000 facilities, and the 10-K says they’re worth $24 billion — the amount it cost to build or purchase them — minus depreciation. The 10-K adds $3 billion for land and $20 billion for equipment, but then subtracts $29 billion for “depreciation and amortization.”  A note explains that the historic buildings have been depreciated over 75 years, using the straight-line method.  In other words, the buildings are worth nothing in the Postal Service’s calculations, and there are no records on fair market valuations or tax assessments.

But the value of many postal buildings has appreciated considerably, and, as a recent USPS OIG report noted, their fair market value far exceeds purchase price.  For example, the National Postal Museum cost $47 million and it now has an assessed tax value of $304 million.  The post office in Fairfield cost $1 million, but it is “in contract” now for $4.4 million.  So why is the Postal Service saying its properties have depreciated to almost nothing, when they’re worth several times what they cost?  Why undervalue assets like that, unless, perhaps, the folks running the show are thinking ahead to when it’s time to put a price tag on the whole postal system, and they want their friends to be able to buy it cheap?  How much is the Postal Service worth, anyway?  You won’t find an answer to that in the 10-K.

They’re not taking it in Malden: The post office in Malden WA is being studied for closure, and citizens aren’t happy with the “facts” presented by the Postal Service.  A website discussion lists many of the complaints, and we’ve heard others too:  The proposal to close says there are a number of alternative sites within a short distance, but the nearest is seven miles; it says the building is 56 years old, but it’s over a hundred; it lists as “advantages” that box holders won’t have to pay fees, but their boxes are free right now; many farmers who use the post office did not receive notices of the proposal to close, the announcement about a meeting, or the questionnaire; the meeting was scheduled at an inconvenient time; seniors and those with disabilities cannot wait in the cold and snow to do postal business with the carrier.  Plus, Washington is a “vote by mail” state, so the Malden post office serves as a de-facto polling location for the surrounding area, and closing the post office amounts to voter suppression.  The community has written its elected officials, and it's not going to lose the post office without a fight.

Rug pulled out in DuBois: Four years ago, when the Postal Service tried to close the post office in DuBois NE, the town raised more than $25,000 to buy the post office building so that it could offer the USPS a cheaper lease.  That lease runs through January 2017, and the town thought the post office was safe till then.  But now the DuBois post office is being studied for closure under the RAOI.  The nearest post office is about a ten-mile drive (twenty round trip), so closing the DuBois post office would be a great inconvenience and a big loss to the town.  A town board member said that the five-year lease made everyone in town feel like the post office was there to stay, "and everything was set up for that.  And now we feel like we're getting the rug pulled out from under us." 

Only a pawn in their game: The Postal Regulatory Commission (PRC) remanded two closing decisions (Innis LA and Monroe AR) back to the Postal Service for further consideration, a sign perhaps that the commissioners are taking a tougher line with the Postal Service.  Plus, another post office was spared when the Postal Service withdrew the Final Determination to close the post office in Pomfret Center CT.  The Postal Service doesn’t say why, so the cause for the reversal will remain a mystery.  Senator Lieberman from Connecticut is the chair of the senate committee that oversees the Postal Service, so maybe he had something to do with the Pomfret decision. 

Along those lines, in July the Postal Service withdrew the Final Determination to close the La Mesa post office in San Diego, shortly after an appeal was filed by the president of the San Diego Area Local of the APWU.  In August, the Postal Service reversed its decision to close the post office in East Camden AR, perhaps because numerous Department of Defense contractors (like Lockheed Martin, General Dynamics, and Raytheon) are served in a nearby industrial park, or perhaps because Senator John Boozman got involved (in a conference call with USPS personnel).  Let’s hope politicians, the Postal Service, and others in power are not using post offices as pawns in their game. 

In the PRC mailbag: The Postal Regulatory Commission released its log of inquiries over the past quarter and for the fiscal year.  Big surprise — the PRC has received a ton of correspondence about post office closures.  The PRC’s Public Inquiry Log for the last quarter (July 1 to Sept. 30) shows a total of 3,050 items, and 2,500 of them concern post office closings (2,132 of them related to the RAOI).  For the fiscal year, over half of the 5,600 inquires were about the closings.

Bulletin boards banned: As if the Postal Service didn't have enough to worry about, now they're cracking down on bulletin boards.  You could read the writing on the wall in late September when, in cross-examination before the PRC,  Postal Service lawyers asked Lorhrville, Iowa's Mayor Donny Hobbes about the kind of things being posted on the board in his town's post office.  The question came up because the mayor had mentioned how the post office was a place where local news was exchanged, like on the bulletin board.  Now USPS supervisors in Capitol Heights MD have told postmasters in their district that bulletin boards with community announcements are banned in post offices.  The board can only have "official postal and other governmental notices and announcements."  But the USPS seems unclear about the rule.  A spokesperson in Baltimore said community announcements were fine so long as the bulletin board was in the outer lobby near the P.O. boxes, but the spokesperson in the Washington district said there are no exceptions.  While the USPS works things out, the post office in Tracys Landing MD is going its own way.  As the local news put it, "There wasn't exactly an uproar in Tracys Landing, more like a quiet rebellion.  In a great American tradition, people decided a rule was stupid and ignored it."

Another VPO: While the Postal Service works on ruining its reputation with silly bans on bulletin boards, it's still trying to look good by opening up cute "Village Post Offices."   The fifth VPO opened last week, and it's in a really lovely hardware store in Glenn, Michigan, named Gerstner Hardware and Vintage Specialties.  The store has been around since 1918, it’s located in a beautiful historic building, and it actually housed the post office sixty years ago, so it was the perfect spot for a VPO.  The town is lucky the owners of the hardware store were willing to take on the job since they won’t make any profit from stamp sales, and they needed to do some remodeling and add a handicap ramp.  A local contractor and architect have even been pitching in to help with the work.  Sounds like a great community.

The wrinkle in the story is that the Glenn post office closed under an “emergency suspension” because of a “loss of a lease on the property,” even though the post office had been in the building for “half a century.”  In August, when the Postal Service informed residents of the suspension, the letter said, “the recommended change is tentative and will not lead to a formal proposal unless we conclude that it will provide a maximum degree of regular and effective service."
 Now that a VPO is in place, one wonders if the Postal Service will ever go through the formal discontinuance process. 

Herr strikes again: Phillip Herr has written 15 or 20 GAO reports over the past three years, many of them about closing post offices.  Herr is so prolific on the subject that his footnotes usually reference his own studies since there’s no one else to cite.  Herr’s latest, “Action Needed to Maximize Cost-Saving Potential of Alternatives to Post Offices,” is about how the alternatives to a post office — kiosks, stamps on line, contract postal units, village post offices, postal counters in chain stores, etc. — are less expensive to operate than post offices and should thus be the future of postal retail. 

The report also discusses the problems with these alternatives, and it’s worth reading for that alone.  As Herr notes, some alternative outlets charge more for postage than you’d pay at a post office.  Contract postal units, which seem like the perfect alternative, are on the decline because they can be terminated, with or without notice, by either the operator or the Postal Service, and they get a lot of “resistance from postal labor” (which sees them as a way around union work) and higher costs (than, say, stamps-on-consignment at a chain store).  Herr seems frustrated by the slow pace of post office closings and the inability of USPS officials “to provide any details about actual cost savings resulting from their efforts to expand retail alternatives.” 

Man of the hour: While Phil Herr is busy trying to close post offices, there's a young man working hard to keep them open.  Evan Kalish is a 25-year-old photo-journalist who's been taking weekend breaks from grad school to travel around the country photographing post offices as fast as he can.  His photos call attention to the beauty of every post office, whether it's a grand old historic building or a modest vernacular structure, and they radiate his love for post offices.  Last week Evan was featured in the Washington Post print edition and an excellent article in Time.  Today he’s off for an interview with NPR, and the BBC is interested as well.  Check out his latest post on Going Postal about island post offices off the coast of Maine. 

Keeping Wall Street Occupied: It’s easy to blame L’Enfant Plaza for the problems facing the Postal Service, but the big Wall Street corporations can take some credit, too.  They lobby Congress for legislation that’s good for their profits even if it’s bad for the Postal Service, and they are the main beneficiaries of the $12 billion the Postal Service outsourced last year, much of it at the expense of postal workers, who are now looking at layoffs because there's supposedly not enough work for them.  This video has some thoughts about how to send these corporations a message and do some good for the Postal Service at the same time.

(Photo credits: Lincolnton NY post office [Evan Kalish]; Williamsport PA rally; Venice CA post office; Gulfport MS post office vintage postcard; Fairfield CT post office; Malden WA post office [Nick Bachman]; DuBois NE post office (to the right of the bank); bulletin board in Tracys Landing MD; VPO in Glenn MI; Pomfret Center CT post office; Retail Alternatives; Squirrel Island community post office.)

How Many People Use the Post Office? Does the Postal Service Even Know?

November 20, 2011

There’s a new GAO report out this week by the indefatigable Phillip Herr.  It’s called “Action Needed to Maximize Cost-Saving Potential of Alternatives to Post Offices.”  In this week’s Federal Eye column for the Washington Post, Ed O’Keefe writes about the report and poses the question, “How bad is it at the post office? Here are the numbers.” 

Citing Herr’s report, O’Keefe writes: “There were 59 million fewer visits to post offices in 2010 than in 2009, and visits are down 21 percent over the last decade, according to a new Government Accountability Office report. (Ironically — despite searching high and low for a number — the report doesn’t actually say how many visits were recorded in 2010.)”

The reason O’Keefe couldn’t find the number of post office visits in the GAO report is that Herr doesn’t say how many there were, and despite being heavily footnoted, the report doesn’t say where the number 59 million came from.  

So, how many people do visit the post office every year?

 

The Postal Facts Page

O’Keefe is a busy fellow, so apparently he didn’t have time to Google around for an answer to his question.  The “Postal Facts” page of the USPS website provides a table with all sorts of data, including annual visits to the post office.  (Click on the chart for a larger view, and click on the chart to come back.)

The line for "Total Customer Visits" says there were 1.12 billion visits in 2009 and 1.07 billion in 2010.  The decline comes to 50 million (about 5%) — a little less than Herr’s GAO report mentions, but close enough.  The table also says there were 1.36 billion visits in 2001, and that would account for the 21% drop over the last decade that Herr cites and O’Keefe repeats.  

The Postal Facts page thus provides the numbers on which Herr may have based his claim that visits were down 59 million in 2010, but this just raises another question: Where did the Postal Service come up with its numbers?  The Postal Facts page doesn’t say. 

 

Annual Customer Visits to POS Locations

The number of people visiting post offices has become one of the issues being examined in hearings before the Postal Regulatory Commission, now working on an Advisory Opinion on the Retail Access Optimization Initiative (RAOI).  After all, if you’re going to close 3,650 post offices — and plan to close a total of 15,000 — it only makes sense to consider how many people use the post office.

In fact, one of the justifications for closing thousands of post offices is that people are visiting the post office much less frequently than they used to.  According to the Postal Service, the brick-and-mortar post office is essentially a thing of the past. 

In his opening testimony before the PRC on the RAOI, James Boldt, the man running the show, said this: “Customer behavior is also changing.  With advances in technology and other product innovations, customers are choosing alternatives to traditional brick-and-mortar retail facilities when possible and instead are attracted to other channels developed by the Postal Service.”

To illustrate his point, Boldt provided the following chart:

The point of the chart was to show that visits to the post office have been steadily declining, and the way the chart cuts off the bottom of the vertical axis, it actually looks like people soon won’t be going to the post office at all. 

It wasn’t clear from the chart how these annual visits were being counted, so the National Association of Postmasters (NAPUS) put several interrogatories to Boldt about it.  It turns out that only about 15,500 post offices have a Point of Sale (POS) terminal to count window transactions, so the chart doesn’t show the picture for all 32,000 post offices.  Plus, the POS terminal doesn’t count many kinds of visits to the post office, like when you go check your p.o. box or pick up a flat-rate box (PRC hearing transcript, Sept. 8, 2011, p. 339). 

Actually, it's not even clear what Boldt's chart is showing to begin with.  It's supposedly showing annual visits to a POS location, but it can't mean that a thousand people a year visit each location.  If you multiply the 15,500 POS locations times the 965 annual visits in 2010, you get about 15 million visits.  Since only half the country’s post offices have a POS terminal, let’s double that number for the whole country, which gives us about 30 million visits.  But that’s a tiny fraction of the estimated 1.07 billion visits in 2010 shown on the Postal Facts page.  So what exactly is Boldt’s chart showing if not annual visits?  And why is the label on the vertical axis blacked out?

There’s another version of the chart in a USPS briefing presentation (from April 2011).  As with Boldt’s chart, the purpose is to illustrate that “customers visits are diminishing at Post Offices, with internet diversion, competition, and the expansion of Postal Access points outside of traditional Post Offices.”  Here’s the briefing presentation version:

Unlike Boldt’s chart, the briefing chart has the vertical axis labeled, with “pieces (m).”  Perhaps this refers to the number of pieces of mail that were handled in retail transactions at each of the post offices with a POS terminal, measured in thousands (m).  That would mean, then, that Boldt’s chart did not really show the number of customer visits at all.  It was showing the number of pieces handled in these visits — about 15 billion pieces at 15,500 locations.  That number is at least in the ballpark, considering that the annual volume of mail is about 170 billion, much of it entering the system not at post offices but at Bulk Mail Entry Units.

While all this may explain Boldt’s chart, we’re back to the question: Where did the Postal Service’s “Postal Facts” come up with its numbers purporting to show a drop in visits, a "fact" now being repeated by the GAO to Congress, the Washington Post, and numerous other news agencies?

 

The Household Diary Survey

Perhaps the numbers were derived from another source, the survey of US households the USPS conducts each year.  This “Household Diary Survey” (HDS) questions some 8,500 families over the telephone or Internet about their postal habits.  The 2010 report shows the following chart:

The chart shows that the percentage of households visiting the post office every month is substantial — 83% in 2010.  The survey doesn't tell us the total number of visits per year, but we can develop an estimate.  If we take the lowest number in each range (1, 3, 7), we find that the average US household visits a post office at least 2.5 times a month.  There are 115 million households in the U.S.  That comes to over 3.5 billion visits a year.  That’s more than three times as many as "Postal Facts" indicates.  

Even that number may underestimate the total annual visits to the post office.  Think about the people with p.o. boxes, who go to the post office almost every day.  According to this OIG report, there are 21 million post office boxes, of which 14.4 million are occupied.   If those boxholders checked their boxes five days a week, that would come to 3.6 billion visits a year.  

But we could be talking about even bigger numbers.  According to a new survey conducted by the American  Consumer institute, the average consumer visits the post office more than four times per month.  There are over 234 million people over 18 in the US.  That would come to over 11 billion visits a year.

In other words, the number of visits to the post office each year is huge — on the order of several billion.  So it looks like the Postal Facts page, with its number 1.07 billion visits in 2010, has grossly underestimated the frequency people use the post office.  And it is just ludicrous to think that the Postal Service has such a firm grasp of the numbers that it knows visits declined by 5% in 2010.  There's no evidence that visits to the post office are even declining at all. 

Take another look at the Household Survey chart.  Rather than showing a decline from 2009 to 2010, the HDS chart shows just the opposite.  It says that the number of visits was fairly stable from 2009 to 2010.  In fact, the numbers for those visiting a post office more than a couple of times a year went up:  The percent of US households visiting 3 to 6 times rose from 30% to 33%, and for 7 or more times, from 18% to 19%.  As the survey report observes, "Even with the continued availability of mail-related products and services through alternative modes (such as Internet orders), in-person visits to postal facilities remain stable."

So how could Boldt testify to a sharp decline in visits when the Household Diary report shows an increase in visits?  

 

Explaining the Inconsistencies

NAPUS asked Boldt just that question in one of its interrogatories.  Boldt explained the inconsistency by making two points.  First, the Household Survey questioned customers on the phone or Internet about the range of frequency of their visits, but “they were not asked to recall or provide evidence of the actual number of visits.”  In other words, the survey dealt with ranges, not specific numbers, and it’s possible people made erroneous claims (they weren’t asked to “provide evidence”). 

What does it take to save a post office? Looking at appeals on closings

November 17, 2011

Yesterday, the Postal Regulatory Commission rejected three more appeals to save post offices — in Minneapolis, NC; Chillicothe, IA; and Pilot Grove, IA.  But the PRC finally ruled in favor of a community seeking to save its post office.  The ruling on Innis, Louisiana, “remands” the “Final Determination” to close the post office back to the Postal Service for further consideration.  That may or may not save the Innis post office, but it could be a sign that momentum is shifting at the PRC.  Aside from PRC Chairman Ruth Goldway, who has dissented on a few cases*, the Commissioners had shown few signs that they were prepared to reject a Postal Service decision to close a post office.

When the Postal Service issues a Final Determination to close an office, the community can appeal to the PRC.  The PRC can’t overturn the decision, but it can “remand” the decision and tell the Postal Service to take another look and provide more evidence if it wants to proceed with the closing.  Recently, the PRC has been very reluctant to exercise even this limited power.  

While orders to remand were not uncommon back in the 1980s and 1990s, they've become rare over the past decade or so.  In 2000, there was the Roanoke, West Virginia decision; in 2006, the Observatory Finance Station (Pittsburgh, PA); in 2009, the decisions on Hacker Valley, WV and Cranberry, PA, both of which involved using improper "emergency suspension" procedures; and in 2010 there was the case of the suspended Rentiesville, Oklahoma post office, which actually closed in 1998.  That's about it for successful appeals since 2000.  

Over the past few months, the PRC had ruled on some ten appeals, and in every case it either affirmed the decision, effectively closing the post office, or dismissed the case.  The causes for dismissals have varied.  In a couple of cases, it was because the Postal Service hadn’t definitively closed the post office yet, as in Still Pond MD, where the post office has been closed under an emergency suspension but not formally discontinued.  In a couple of cases, the Postal Service actually changed its mind and withdrew the Final Determination notice — more on that a little later.

For a while, it looked as if the PRC was going to affirm every closing decision, and one had to wonder, what would it take for the Commissioners to rule in favor of a community trying to save its post office? Chairman Goldway has dissented several times, arguing that the Postal Service’s case was flawed, but her fellow commissioners, aside from expressing reservations in a few concurring opinions, have shown few signs that they were ready to rule against the Postal Service.  

Then yesterday the Postal Regulatory Commission remanded the decision to close the post office in Innis, Louisiana, back to the Postal Service.  The Innis decision may be a major breakthrough.  It’s worth taking a closer look at the case, since the ruling may help other communities craft their appeals cases.  It may also be a sign that the PRC is looking more critically at the Postal Service’s decision-making process, which bears not only on appeals cases but the Retail Access Optimization Initiative (RAOI).  The Advisory Opinion on the RAOI plan to close up to 3,650 post offices should be coming out in mid-December, hopefully before Christmas, as we learned yesterday in a public hearing held by the PRC.  (The podcast is here.)

The petitioners appealing the Innis decision argued that the Postal Service did not sufficiently consider the effects of closing the post office on the community, and they pointed to erroneous estimates provided by the Postal Service on the potential for population and economic growth in Innis.  They also argued that the Postal Service had not given sufficient consideration to the closing’s impact on postal services.  For example, there are 89 post office boxes in Innis, but room for only 56 at the post office where Innis customers are being directed.  The neighboring post offices are also described as “located at cross roads in the middle of nowhere,” whereas Innis is a bona fide community.  The PRC ruling found merit in these arguments, observing in its analysis that “the Commission cannot conclude that the Postal Service has given adequate consideration to the closing of the Innis post office on the community.” 

The appeal also claimed the Postal Service’s estimate of cost savings was flawed.  Innis had been without a postmaster since 2008, and revenues were pretty low and declining over the past three years.  But the petitioners argued that the revenue declines were due at least partly to the fact that customers were taking their business elsewhere because of the “subpar performance” of the Office-in-Charge, who was eventually removed from the position. 

According to the financial analysis, the Postal Service will save the employee salaries and benefits ($33,404) and annual rent ($2,400).  The Postal Service did not figure in additional costs for the carriers because they already cover the territory, nor did it consider the loss in revenue from post office boxes that don’t move to another post office.  The PRC observed that “the economic study should have included a more accurate analysis of the additional costs for rural delivery to the customers affected.”

Finally, the community proposed an alternate plan that involved closing two adjacent post offices in other communities, and the Postal Service seemed to like that idea, but then it was dropped with no explanation.  The PRC felt that “having recognized possible merit in the alternative,” the Postal Serviced should have offered “an explanation for rejecting that alternative.”

Overall, it’s not quite clear why the Innis appeal was much stronger than many others that the PRC has rejected, like the appeal for the post office in Gwynedd, Pennsylvania, and Akron, Ohion.    But it’s a welcome sign that the tide may be turning at the PRC, at least a little.

It wasn’t all good news at the PRC yesterday.  The Commissioners affirmed the Postal Service’s decision to close the post offices in Minneapolis, North Carolina; Chillicothe, Iowa; and Pilot Grove, Iowa.  Those post offices will now close, although it’s not clear if they will benefit by the suspension on closings that goes into effect on Friday of this week, which would at least keep them open through the holidays.

The vast majority of appeals are still open cases, and their number just keeps increasing in a totally unprecedented fashion.  Here are some materials on the history of appeals:

Things fall apart, the center cannot hold: Time tells the story

November 17, 2011

There's an excellent piece in Time.com today entitled "How the U.S. Postal Service Fell Apart," by Josh Sanburn.  Unlike most articles in the mainstream media, this one takes a thoughtfully balanced approach to the story.  Postmaster General Donahoe is there to provide the Postal Service’s view, but there are also interviews and a narrative line that tell another side of the story.

Sanburn explains that the Postal Service is not in financial straits simply because of the Internet — the usual line that comes out of L'Enfant Plaza and that gets repeated in every media report — but rather because of the "toxic combination" of several additional factors, like the poor economy and congressional mandates on retirement and health benefit funds.  The article also explains how closing thousands of post offices will have virtually no impact on solving the Postal Service’s budget crisis.

What’s best about the article, though, is the way it shows some appreciation for the postal system, something sorely missing in most news articles, which tend to paint the Postal Service as "irrelevant" and "obsolete," a doomed "dinosaur" headed for extinction, inevitably going the way of the Pony Express

“It wouldn't be far-fetched to argue that the postal service has been the most important institution in our country's history,” writes Sanburn.  The Founding Fathers thought the post office was important enough to include in the Constitution, the postal system delivered newspapers that helped keep people informed during the early years of the new nation, the Postal Service will do amazing things to get the mail delivered (like using mules, boats, and snowmobiles), and it still gets a letter anywhere you want for just 44 cents.  The Postal Service has also provided jobs, thousands and thousands of them, and for a long time, the postal service was the largest public-sector employer in the country.

Sanburn goes back to the wildcat postal workers strike in the late 1960s to explain how the Department of the Post Office got turned into the US Postal Service in 1970.  That’s basically when an essential government institution was transformed into a quasi-government entity that has been pushed to act more and more “like a business.” 

The desire to see the Postal Service as nothing but a business now threatens the Postal Service itself, and many of its recent actions — like planning to close thousands of post offices — seem downright self-destructive.  The Postmaster General is quoted in the article as saying that after it finishes with the 3,650 post offices now under closure study, the Postal Service will look at closing many more — a total of some 15,000 post offices — half the country's post offices. 

If that were to happen, it would basically gut the Postal Service, prepare the way for privatization, and mean the end of one of the country's most valuable institutions.  

It’s an interesting article. Check it out here.  

(Photo credit: Mailmen starting their rounds at Christmas time, 1955, in front of the New York City main post office, now sold.)

Protest in Roanoke

November 15, 2011

 

Yesterday postal workers and neighbors fought back against the United States Postal Service over its plan to close the mail processing facility in Roanoke, Virginia.  Roanoke.com has the story.

Note that according to the TV report, the District Manager told the crowd that over the last ten years, first-class mail volume has dropped 50%.  But there were 104 billion pieces of first-class in 2000, and 78 billion in 2010.  That's a drop of 25%.  Where did the DM come up with his number?  Out of thin air?

For more on the consequences of a plant closing like this, check out the excellent post on Going Postal about the closure of the P&DF in Frederick, MD, on Friday of this week.

Another post office closing: It's the same old story, don't you know?

November 15, 2011

Clements, MN

The post office in Clements, Minnesota, is closing on Friday, the day before the USPS suspension on closings goes into effect.  Other than that sad detail, the story is all too familiar.  

The Postal Service cites declining revenues over the past few years and a reduction in workload as the reasons for closing the Clements post office.  But both those factors are basically the same thing, and they are primarily due to the recession and therefore temporary.  The real reason is that the post office is running at a deficit, and not a very big one at that. 

The post office brings in about $51,000 and it costs about $61,000 to operate.  And that’s using the Postal Service’s method for calculating the revenues.  It only includes postage from walk-in customers and doesn’t consider the value of processing and delivering mail.  As for the social and economic value of the post office to the town or the costs citizens will have to bear in traveling to another post office, the Postal Service doesn’t even begin to consider them.

Forget about the fact that the Postal Service is not permitted to close a small rural post office for running at a deficit.  The Postal Service doesn’t care, and it has found a variety of ways to get around the law.  Like saying that there are other postal facilities nearby (even though nearby may mean more than ten miles, as in the case of Clements) or there’s a vacancy in the postmaster position (a vacancy it chose not to fill) or there’s a problem with the lease (usually avoidable).   There’s only one reason all these post offices are closing — they’re running at deficits.  Otherwise, why bother?

As always, there was a community meeting in Clements, and everyone spoke up, but what they realized, says the city clerk, is that their suggestions were not being considered.  The community suggested reducing the hours on the post office, but the Postal Service said no (even though the Postmaster General is now considering this alternative).  There was talk of a village post office, but one person who was interested in hosting a VPO never heard back from the Postal Service about it.   There were probably other places a VPO might have been located — there are 26 businesses in town — but that’s not happening.  The community even offered to run the post office on a volunteer basis — no go, said the Postal Service.  Residents wanted mailboxes in front of their homes, but they’re getting cluster boxes.  

The lease on the post office runs until June 30, 2014, but as of last Thursday, the owner of the building had not even been informed by the Postal Service it would no longer be leasing the building.  Perhaps that’s because the Postal Service will be covering the cost of the remaining time on the lease.  It’s just $4,158 a year, so that’s only $11,000 in owed rent.  No big deal for a $70 billion a year operation like the USPS — it’s just the savings on closing the post office for a year.

One more thing: Think the Postal Service is worried about people with disabilities?  The mayor of Clements is wheelchair bound. 

The city clerk said that “the entire process was not handled very well,” and she hopes the Postal Service has learned something so other communities don’t have to experience what Clements did.  Don’t count on it.  We’re going to be reading this story over and over and over again.

(Photo credit: Clements Pine street — the post office is in between the church and the Redwood Electric Co-op, photo by Debora Drower.  Details on the story, as reported by Troy Krause for the Redwood Falls Gazette.com, and Fritz Busch for The Journal.)

The Week in Review: Rallies, briefs, complaints, letters, and road trips

November 13, 2011

Another week of post office closing news — rallies to protest the downsizing, briefs filed at the PRC, road trips to visit threatened post offices, complaints about the closing process, a letter from Ralph Nader to the Postmaster General asking for empathy, and more on the Village Post Office, a concept that just won't go away.  Here’s a wrap-up of some of the week’s news.

Towson Post Office

Rallies to save the Post Office and the Postal Service

Baltimore, MD: On Sunday, Nov. 13, there was a rally to “Save Your Local Post Office” taking place at McKeldin Park in downtown Baltimore (Inner Harbor Pratt & Light Streets).  “Bring your family, your wife, your son or daughter, father or mother,” said the announcement.  There are ten post offices in Baltimore on the closing list, including the historic Towson post office on Chesapeake Avenue.

Portland, Oregon: On Nov. 7, the National Association of Letter Carriers held rallies at several post offices in Portland, Oregon, to protest five-day delivery, massive post office closings, and workforce cuts.  One of the rallies took place at the Piedmont post office, photo below, and more images & info, here

Bronx, NY: On Monday, Nov. 14, there will be a rally in front of the Einstein post office in the Bronx, New York, at 8:30 a.m.  Co-op City in the Bronx is facing the loss of two post offices, the Einstein and the Dreiser Loops, which together serve some 55,000 residents of Co-op City, the largest NORC (Naturally Occurring Retirement Community) in the United States.   Those two post offices mean a lot to this community.  It's very difficult for residents to get to the main post office, so they depend on these stations, which serve their immediate locales.  The Einstein Loop is hemmed in by highways, and closing its post office would mean the end of a walk to the post office.   The Dreiser Loop is not far from the main post office, but it's across a large boulevard.  This is a middle-income neighborhood with mostly retirees and seniors, the kind of people who walk to the post office, and who are most vulnerable when a post office closes.

Sparks fly at the PRC: The Postal Regulatory Commission is heading down the homestretch on its Advisory Opinion about the Retail Access Optimization Initiative (RAOI), the Postal Service plan to close 3,650 post offices.  Over the past ten days, both sides have submitted “initial briefs” summarizing their arguments and “reply briefs” critiquing the other side’s initial briefs.  The main issue is whether or not the RAOI complies with Title 39 and the PAEA, but that takes in a lot of other matters, like the method used by the Postal Service to select post offices for closure study — which seems biased toward picking small rural post offices — and problems that have already emerged with how the closing process is being conducted.  Because the PRC conducts its study as a quasi-legal process — with witnesses, testimonies, and cross-examinations — the credibility of testimony becomes significant, and the lawyers naturally go at each other’s witnesses with considerable enthusiasm.  Still, it was disconcerting seeing just how vehement the ad hominem attacks got this week.  Even the chairman of the PRC, Ruth Goldway, was not spared when the Postal Service made its case by attacking all of the witnesses against the RAOI and just about everyone else in sight.  You can check out the briefs on the PRC website, here, and there's an interview with Goldway here.

PRC says no to Pimmit: The number of appeal cases at the PRC just keeps growing — sixteen dockets have been opened since the first of November (though a few of the appeals were premature since the post office hadn't yet been issued a final determination).  The PRC said no on Thursday to a request that the Pimmit branch, Falls Church VA, remain open while the appeal was being considered.  That was disturbing and confusing because the PRC has long maintained (and reiterated in its decision) that stations and branches should get the same closing process as a main post office, and that usually meant allowing offices to stay open during appeals.  The two commissioners who voted to allow the post office to close on Friday did not provide a rationale for their decision.  Chairman Goldway dissented.

Post office road trip in Kansas: In Kansas, Marci Penner, director of Kansas Sampler Foundation, an organization dedicated to preserving rural culture, declared November 9 as a day to "Put Your Stamp On It."  Marci and her assistant director WenDee LaPlant took a road trip down K-99 to visit seven of the 152 Kansas post offices on the closing list.  They  also bought $381.56 worth of stamps to support the post office.  Check out their you-tube videos, here and here.

Going Postal, on the road again: Evan Kalish, intrepid road tripper of Going Postal fame, has been slipping away from grad school for weekend drives to photograph post offices in Pennsylvania and, most recently, Maryland.  He braved the nor’easter in early November to get images of rural PA and almost got stuck in Punxsutawney like Bill Murray in “Groundhog Day.”  It was worth it, though — he got a picture of Punxsutawney Phil the mailman.  Last week Evan put together a great post on carrier annexes, and this week, all you ever wanted to know about postmarks for Veteran’s Day (11/11/11).

Historic Colorado post office threatened: In Ward, Colorado, the group “Citizens to Save the Historic Ward Post Office” is protesting the way the Postal Service has been conducting the closing process.  They’ve complained that the USPS would not schedule the community meeting at a time when most customers would be able to attend, and when they asked for financial information about the post office, they were told they’d need to file an FOIA request.  The group says the Proposal to Study is filled with inaccuracies about the historic significance of the post office, the number of businesses and nonprofits in the area, and the disadvantages of proposed alternate service to customers — the nearest post office is a half-hour drive away on mountain roads.  “In essence,” says one member of the group, “the USPS has totally ignored the community, legislators, historic societies, as well as disregarding rights of citizens. . . This whole closing process is a SHAM.”

Emergency in Death Valley: In Death Valley, California, the post office faces closure, and the community has had its meeting with postal officials.  But it looks like they may not make it through the full discontinuance process because the Postal Service is apparently preparing for an emergency suspension.  The postmistress is gone, and there’s a temporary postmaster filling in, but the Postal Service may put the post office under emergency suspension for lack of personnel to run it.  This doesn’t sound like an “emergency,” and someone at the community meeting said there was talk that the Postal Service was planning to close the post office even before the postmistress left her position.

Another AMP hearing and concerns about national security: The Public hearing on the planned closure of the Williamsport P&DC is scheduled for Thursday, November 17, at 6:30 p.m. at the Genetti Hotel in Williamsport.  Steve Lunger, President, APWU Local #2007, says the closure would slow down the mail for entire north-central tier of Pennsylvania (169-- and 177-- zip codes), which would severely impact local newspapers and mailers.  Lunger is also concerned that cutting the processing network will have a dangerously negative effect on national security.  Consolidating away 250 plants — and running the remaining plants 24 hours a day — makes the system more vulnerable to a wide variety of potential problems, like a failure of the power grid, a Katrina-like disaster, a cyber attack, or a terrorist attack.  In view of these vulnerabilities, Lunger has asked President Obama to issue an Executive Order to direct the USPS to maintain most, if not all, of its current network.

The Village Post Office, still being touted: A couple of weeks ago the Postmaster General backed off the Village Post Office concept as an alternative to actual village post offices, but apparently not everyone got the memo because the idea continues to come up at community meetings.  In Dola, Ohio, for example, the USPS rep told the small audience that had gathered on Wednesday for its community meeting that the VPO was an option and explained how it could sell Forever stamps and prepaid shipping boxes.  The USPS official overseeing the post office closings in the Boston area recently told a reporter for the Watertown Patch that alternatives to the traditional post office branch included a "village post office," which often sits in supermarkets, drug stores or other locations.

In Lake George, Minnesota, there's a historic log cabin post office that is one of the world’s smallest post office.  According to the Bemidji Pioneer, at the community meeting to discuss closing the post office, the manager of post office operations told folks that one option was to do postal business with the carrier, and another was the Village Post Office.  Next door to the post office is a convenience store where a VPO could be placed, but the owners didn’t attend the meeting.  The Postal Service manager apparently also informed the audience that the Postal Service is in trouble "because strong labor unions and the snail’s pace of legislative change are hampering the ability to make quick and sweeping changes to right the ship."

Ralph Nader writes the PMG: Ralph Nader wrote a letter to Postmaster General Donahoe (Nov. 9, 2011) in which he reminded the PMG that "the Postal Service is a public institution with public requirements of service unique to its historic mission . . .  The USPS is not just another business.”  Nader also asked the PMG to issue a report on exactly what the Postal Service has been doing to expand revenues and really “sell postal services vigorously.”  Nader also urged the PMG to “empathize deeply with the plight of rural people and the loss of the physical federal presence of the local post offices in their communities.  People in rural communities have relied on them for a long, long time.  Build them up, rather than close them down. Your imagination and ideas should rejuvenate the USPS!”

Nader also called the Postmaster General’s attention to another letter that had been sent to him in October by the Appleseed Network, encouraging the Postal Service to resurrect the Postal Savings System.  The program, which operated from 1911 to 1966, offered federally insured savings accounts to the unbanked, rural residents, and low-income wage earners, as an alternative to the “less prudent — and frequently predatory— financial services available at check-cashing outlets, pay-day lenders, and pawn shops.”  Appleseed says the time has come to bring back the system to help immigrants, and it will provide additional revenue to the Postal Service as well.  It's a great idea, but don't hold your breath.

Much more than stamps: And to round things out, a video about the oldest working post office in Florida — on the closing list.

(Image credits: Towson post office; rally in Portland; Dreiser Loop, Co-op City, by Evan Kalish; Pimmit post office, Google Street View; Philatelic Phil, by Evan Kalish; Ward CO post office; Death Valley sign; Lake George, MN post office; Postal Savings.)

Singing the Post Office Blues

November 12, 2011

There’s been a post office in Ward, Colorado, since 1863, and it’s currently housed in an 1898 schoolhouse that’s on the National Register of Historic Places.   Ward's post office is being studied for closure under the Retail Access Optimization Initiative, and it’s had the community meeting and gone through a comment period.  Ward is now waiting to hear its fate.

Ward is a mountain town near Boulder and Rocky Mountain National Park.  It sees plenty of snow, and if the post office closes, it’s a half hour drive (each way) on icy, windy mountain roads to the next nearest post office in Jamestown.

Ward was one of the richest towns in Colorado during the Gold Rush, but a fire in 1901 destroyed many of its buildings, and by the 1920s it was largely deserted.  The Peak-to-Peak Highway in the 1930s led to a revival, and in the 60s Ward was discovered by the Hippies.  Though Ward’s official population is about 150, the post office has about 400 customers.  Many live outside of town and some run businesses from their homes, so losing the post office would be devastating.

The video was made by Arthur Bradley Grimm, and it features Robb Candler on guitar and vocals by Becky Martinek.

(Photo credit: Ward post office.  For more on the history, see the Daily Camera and wikipedia, and for the fight to save the post office, here and here.  And by the way, if you liked this video, check out "There Used to Be a Post Office Here," a spoken word piece by Kent Rosenwald, musician and former letter carrier.)

 

Bad News Comes in Threes: How Congress, Industry, and Management Have Made a Mess Out of Things

November 11, 2011

By Mark Jamison

[The author is a postmaster for the USPS. In keeping with the USPS Administrative Support Manual, section 363, Mr. Jamison does not "speak for or act on behalf of the Postal Service."  His comments represent his personal views and observations based on 28 years of service, and they are intended for no other purpose than to expand the conversation on an important public issue.—Ed.]

AMIDST THE SOUND AND FURY of ideological punditry and political posturing that passes for thoughtful debate about the future of the Postal Service, three things are becoming clear: Congress is unable to take responsibility and solve problems, the commercial mailing and marketing industry has developed a sense of entitlement that undermines its own interests, and senior postal management has become imprisoned by its own circular thinking.

Watching what’s gone on the past few months can’t help but leave one with a sense of hopelessness.  The legislative sausage grinder turns out compromises that appease politicians who have no real understanding of postal facts, that favor the commercial mail lobby, and that give the Postmaster General the tools he needs to dismantle the Postal Service.  The mail industry encourages the dismantling, pressures the Postal Service for favorable discounts, and lobbies Congress for legislation that protects its profits.  Postal management tries to keep the industry and Congress happy, but neglects the interests of its employees and the average citizen.  Congress, the industry, and management are all in it together, but let’s take them one by one.

 

The People’s Representatives

With each passing day it becomes painfully more obvious that Congress is completely out of touch with the problems of the American people.  Worse, the politics of Washington has become so aggressively dysfunctional that our elected representatives are no longer capable of examining a problem from any perspective other than the one supplied by their most favored lobbyists.

Most of what passes for action in Washington is political posturing designed to get a senator or congressman positively portrayed in the media spotlight while abjuring them of the need to take any responsibility for the consequences of their positions or actions.  Our elected representatives advocate for policies that often blow up, but they never pay the cost of their errors — their salaries, benefits, and institutional entitlements continue to flow.  More often than not, the politician doesn’t even pay an electoral price since our hyper-partisan atmosphere causes most of us to vote for “our side” rather than considering character and intellect.

I would like to think that the folks who represent us in Washington bear some basic similarities to the rest of us.  Politicians, despite their profession, are still human beings.  They love their dogs and their families, and they are capable of expressing some warmth of human emotion or kindness.  Even the most rabid ideologues must occasionally feel remorse for the harm they might have caused another person.  They must feel a little shame, or at least some confusion, when they express a hypocritical thought. 

But what are we to think when we hear politicians like Congressmen Darrel Issa from California and Dennis Ross from Florida make comments about the Postal Service that are so patently false?  Do they know they are lying or at least grossly distorting the facts when they completely dismiss the fact that there are financial inconsistencies in the way the Postal Service has been treated?

If Mr. Issa and Mr. Ross were to stand up and proclaim that they believed that the American people would be better served by a privatized postal service, I would heartily disagree, but I would respect their willingness to express and pursue their ends openly.  If they would clearly state their belief that we’d be better off with a postal system with a workforce that was not unionized and that paid workers the minimum wage and offered minimal benefits, at least we could have a meaningful discussion about the value of their system and the one I might prefer.  We could at least look at some empirical evidence and allow folks to draw intelligent conclusions.

But instead of making their ultimate goals clear, politicians like Issa and Ross are dissembling about the real causes of the Postal Service’s financial problems, and they are not being straightforward about the true aims of their proposed reforms.  The Postal Reform Act they have put forward would gut the Postal Service and prepare it for being broken up into pieces — “decoupled, bifurcated, and unbundled,” as the current parlance has it — so that it can be privatized.  The aim is clear, but their rhetoric is not.

The Postal Service wallows in crisis today not because of the loss of mail volume but because of the provisions of the 2006 PAEA.  The deficits incurred by the Postal Service over the last several years are virtually equal to the amounts withdrawn by the PAEA. That is a demonstrable fact.  Just take a look at the Postal Service’s 2010 Annual Report, where the Postal Service — rather than blaming the Internet, as it does every time there’s a meeting about a post office closing — provides a chart showing that “retiree health benefits prefunding is driving losses.”

The PAEA also failed to appropriately address other issues of transfers between the Postal Service and the Treasury.  For example, the two retirement systems, FERS and CSRS, have basically become a means to transfer wealth from postal workers to the federal government.  There are similar problems with workers’ compensations laws, specifically FECA, as they have been applied to the Postal service.

The PAEA also codified a complex and often convoluted rate system that is both expensive to manage and philosophically unsustainable.  Senator Susan Collins of Maine was one of the primary sponsors of the PAEA, and at every opportunity she has made it clear that she considers herself an authority on postal matters. She intervened in the exigent rate case before the Postal Regulatory Commission (PRC), and attempted to rewrite PAEA by injecting her version of legislative intent into the proceedings.  While the Senator seems a reasonably intelligent and personable individual, it’s not clear how much of an authority she is on postal issues.  It is clear that among her constituents in Maine are paper manufacturers and at least one very large catalog mailer.

I’ve heard Mrs. Collins make many pronouncements regarding the future of the Postal Service and I’ve seen her stand prominently in front of the cameras and speak seriously about the problems she seeks to solve.  Unfortunately, I’ve never once heard her apologize for the mess she and PAEA created.  Reading the history of PAEA and talking to some of the folks involved at the time, I’ve come to understand that PAEA was the typical legislative sausage making, designed less to solve problems than to ensure that constituent lobbies were properly cared for.

Mrs. Collins can actually articulate a pretty clear rationale for a healthy postal service that provides meaningful universal service across the breadth of this country.  Unfortunately, she often seems to do this in the service of a piece of legislation that further undermines postal services in favor of narrow interests.

 

The Entitled (aka stakeholders)

Over the last twenty years postal legislation has heaped untenable burdens upon the Postal Service and its workers.  It has also created a special class of postal customer — the stakeholder.  The idea of the Postal Service as an essential national infrastructure that serves the American people has been seriously undermined.  This democratic vision has been replaced by the view that the Postal Service is merely another player in the mailing industry, a player whose primary purpose is to facilitate the business model and increase the profits of commercial marketers and mailers.  This has become increasingly clear from the briefs and arguments submitted by these stakeholders in various cases before the PRC.

Moving toward the End-Game: A moratorium maybe, a Goldway dissent, a PMG promise to hold off on closing post offices and DUOs too

November 9, 2011

A moratorium on post office closings came a step closer today, the Postmaster General has apparently promised to hold off on closing post offices until the first of the year, and the Chairman of the Postal Regulatory Commission dissented on an appeals decision again.  A big day in postal world (and don't even mention the stock market).

Earlier in the day, the Senate Homeland Security and Governmental Affairs Committee was considering S. 1789, the “21st Century Postal Service Act of 2011,” and the “markup” of the bill included an amendment that would suspend the closing of post offices until some retail “service standards” are established.  The amendment actually passed, with a 12-4 vote, and if it becomes part of the postal reform law Congress is working on, it might mean a moratorium on post office closings. 

According to a message from Mark Strong, president of the National League of Postmasters, to League members, the committee also mentioned during its discussions that the Postmaster General “has agreed to back off of current closing until the legislative process has a chance to work its way to fruition, and the setting of standards is complete.”

The Fort Smith City Wire confirms that news with a report that U.S. Rep. Mike Ross (D-Prescott) announced on his Twitter feed that the U.S. Postal Service will “temporarily suspend” all post office closings nationwide from November 19 to January 2. 

UPDATE 11/10/11: The Congressman's Tweet was about a letter USPS VP Dean Granholm sent to VPs of Area Operations, indicating that "in an effort to avoid unnecessary service interruptions or logistical challenges, all Delivery Unit Optimization (DUO) implementations and post office closures will be temporarily suspended beginning November 19, 2011 and continuing through January 2, 2012."  The letter also says, however, that all districts may proceed with the discontinuance process, including community meetings and final determination postings.  "Only the actual physical closing of a post office or the physical relocation of routes from one facilty to another (DUO) will be termporary suspended."  Granholm's letter is here.

The suspension of closings during the holiday season won't help at least one post office.  The Pimmit branch post office in Falls Church, Virginia, near Tyson's Corner outside Washington, DC, was told in September that it would be closed this Friday — a decision currently being appealed to the Postal Regulatory Commission (PRC).  The appellant, attorney Elaine Mittleman, a devoted patron of the Pimmit post office, also applied for a “suspension” that would have kept the post office open while the appeal was being heard.  The PRC turned down the request today, and the post office will apparently close on Friday.

The Chairman of the PRC, Ruth Goldway, dissented from her colleagues on today’s Pimmit decision.  It’s her fourth dissent on appeals cases since July.  In her dissenting opinion, Goldway wrote, “For many years, the Postal Service has kept post offices open during the pendency of a post office closing appeal. In this case, involving a branch office, the Postal Service chose to proceed with closing despite the appeal underway. In my opinion, the Postal Service should, as a matter of course, suspend the closure of branches and stations, in addition to post offices, where a post office closing appeal is underway.”

If you’re not into the lingo, that’s a reference to the fact that “stations” and “branches” — post offices that are “secondary” to the main post office of a city — are, according to the Postal Service, not entitled to the same closing process as a main post office.  The PRC has long disputed this, but the disagreement continues to fester, and Pimmit is now another victim of the unresolved debate.  Today the majority of the PRC commissioners chose to side with the Postal Service, so the Pimmit branch will not get the benefit of the doubt and stay open while the appeal goes forward.  That will make it even more difficult to win an affirmative decision from the PRC, and it could seal the fate of Pimmit.

Today’s markup of S.1789 provided better news, at least in part, by moving us closer to a moratorium on post office closings and the implementation of “service standards” that could make it more difficult to close small rural post offices, perhaps others as well.  These service standards involve issues like the maximum time and distance a postal customer should reasonably be expected to travel to a post office, as well as demographic matters, like how seniors or other “vulnerable” populations might be impacted by a post office closing.  (More on the service standards is here, and for more on the background to how the amendment came to be, see the NAPUS website.)

It could take a while to work out the details of the service standards, and the moratorium would presumably stop all closings during that time.  The postal reform act might not prevent thousands and thousands of post offices from eventually closing, but it would certainly slow down the Postal Service in its effort to close post offices as fast as possible.

The Valpak Brief

November 6, 2011

James Cox Kennedy is the chairman of Cox Enterprises, a media conglomerate founded by his grandfather.  Mr. Kennedy is part of the 1% the Occupy movement is protesting against.  Actually, according to the Forbes 400 list, Mr. Kennedy’s $6 billion stake in the family’s company makes him the 53rd richest person in the United States, and that puts him in the top 0.00002%.  Mr. Kennedy doesn’t own the country’s post offices, but his company has hired a law firm to advocate closing them. 

Cox Enterprises is a highly diversified company based in Sandy Springs, Georgia.  It owns 15 television stations, 86 radio stations, several newspapers, and a broadband communications and entertainment company.  It also owns Cox Target Media, North America’s direct mail leader and provider of the Valpak® savings envelope.

You’re probably familiar with Valpak’s “Blue Envelopes®.”  They show up in your mailbox now and then, filled with coupons for discounts on a variety of products and services — automotive, beauty, entertainment, health, home improvement.  Maybe you look forward to saving a few bucks next time you need an oil change or a pizza.  Maybe you toss the thing in the trash without a second thought. 

Valpak depends on the Postal Service to deliver those Blue Envelopes, but the company isn’t very interested in post offices and postal workers.  Its primary concern is keeping postal rates down and profits up.  Cox mails the Blue Envelope to 40 million households each month, 500 million a year.  With that kind of volume, even the smallest increase in rates quickly adds up and cuts into profits.  That’s why the big mail industry stakeholders like Valpak and the Direct Marketing Association favor cuts to the postal workforce, processing plants, and retail network. 

On Friday, Valpak submitted its “Initial Brief” to the Postal Regulatory Commission (PRC) on the case of the Retail Access Optimization Initiative (RAOI), the Postal Service’s plan to close 3,650 post offices.  The brief was prepared by William J. Olson, PC, a Virginia law firm that deals with various kinds of law — constitutional, nonprofit organization, election, health, and firearms — as well as postal law.  Olson himself has written several papers about the postal system, such as “Enhancing Competition By Unbundling the Postal Administration,” which is about “bifurcating” the postal system so that a government-owned agency would take care of delivering the mail (thereby maintaining the universal service obligation), while the receiving and processing component of the system would be privatized.

The Valpak brief argues that the PRC should approve the RAOI because it will help “the Postal Service’s near-desperate need to achieve increased efficiencies and cost savings” and thereby avoid “some form of bailout from Congress, possibly from taxpayers, in order to continue operating.”  The brief addresses legal principles, the financial setting, the Village Post Office, the “non-postal” benefits of a post office, and so on, but the heart of the matter for Valpak is that post offices are simply a very "inefficient" way to “collect revenue” so it only makes sense to close post offices that are losing money and  “unnecessary.”  Otherwise, we’re headed for a “bailout.”

In its own “Initial Brief” to the PRC, the Postal Service studiously avoids any suggestion that post offices might be closed for running at a deficit.  “The RAO Initiative is structured so as not to violate the 39 U.S.C.
§ 101(b) prohibition against closing small Post Offices solely for operating at a deficit,” says the USPS brief.  James Boldt, the man running the RAOI, explicitly testified that whether any facilities were "operating at a deficit" was “not a criterion for their inclusion as candidates for discontinuance review under the RAO Initiative.”  The Postal Service has said repeatedly the RAOI is not only about “cost savings” but also about “optimizing the retail network” and other goals.  The Final Determination notices to close post offices always make it clear that there were several reasons for the discontinuance, not just that the post office was running at a deficit.

The Valpak brief, however, does not mince words, and it probably has the USPS lawyers cringing.  Valpak goes straight for the deficit issue and lays bare the real reason — the only reason — for closing post offices.  The brief states, “Uneconomic retail services, including but not limited to those post offices with a two-hour earned workload, constitute what long has been the most expensive and inefficient way of providing citizens with access to retail postal services.”

Dismantling the Public Realm: Post Offices for Sale

November 5, 2011

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In July the Postal Service outsourced its real estate and property management business to CB Richard Ellis, the world’s largest commercial real estate company.   Today the USPS-CBRE website is up and running, showing off some 90 post office buildings as well as 36 land parcels, all for sale.   The Postal Service must be in a big hurry to dismantle itself — the website has a page on "About USPS" and all it says is "Under Construction."  Maybe it should say, "Under Deconstruction."

When the story was first reported back in July, the Wall Street Journal said that CBRE had been hired “to advise the agency on the 300 million square feet of property that it owns or leases.”  Tom Samra, vice president for facilities at the postal service, said, “We'll be putting buildings on the market and terminating leases, where possible." Over the next six months, Mr. Samra said, the agency and CBRE are looking to craft a plan on how to curtail the portfolio in line with the lower mail volumes seen by the agency.

That plan is now being implemented, and it turns out that CBRE will be doing a little bit more than “advising” the Postal Service.  The company is now the “exclusive” real estate agent and provider for the U.S. Postal Service.  It is taking over the negotiation of leases, and it is working with broker Caldwell Banker to market and sell post office buildings and lands.  

As reported in a USPS News Link (thanks to Postal News for catching this), Samra says that the USPS real estate holdings are a valuable yet underutilized asset, and they cost the Postal Service a lot of money to maintain.  The Postal Service calls them “surplus buildings,” but they are “underutilized” and “surplus” because the Postal Service made them that way.  It has moved carriers out of downtown post offices to annexes on the outskirts and in the suburbs, like in Camas, Washington, where a New Deal post office is now for sale, with postal services moved to the annex.  It has shifted from owning to leasing spaces, like in Palm Beach Florida, where it sold off the New Deal post office and moved the post office to a rented space in a strip mall.  It has opened up “alternative retail access points” in Wal-Marts and Staples so that business is siphoned off from the brick-and-mortar post office, and now it says that customers “prefer” it that way.

The Postal Service didn’t hire the biggest real estate company in the world because it wants to sell off a mere 126 properties.  The Postal Service owns over 8,000 properties, as well as leasing about 27,000.  The new CBRE website is just a preview of coming attractions.  The Postal Service wants to sell off the entire network, or at least a huge portion of it.  The model is Europeans countries like Sweden and Germany, where nearly all of the post offices were closed and replaced by postal counters in private stores and businesses. 

Among the 90 post offices for sale on the new website are ten historic buildings (seen in the slideshow), most of them on the National Register of Historic Places.  They are part of the nation’s architectural treasure, and they are now up for grabs, waiting to be sold to the highest bidder.  Over the coming years, we’re going to watch thousands of post offices sold, and many of them will be historic landmark buildings that are the pride of their communities.  The American people own 8,000 post office buildings, over 2,000 of them built during the New Deal and before.  How many of them must we watch get turned into restaurants and clothing stores and real estate offices before people say, Enough?  

Post offices are a fundamental part of the public realm, along with libraries, public schools, state colleges, national parks, and the public transportation system.  This public infrastructure was built and paid for by the American people, and that's who owns it and that's who it serves.  Now the public realm is under assault  by the corporate elite, which wants to see everything transferred over to the private realm, where they can make a profit off it.  

But it shouldn't be up to a handful of executives in L'Enfant Plaza, the USPS Board of Governors, and a few members of Congress to decide what happens to the Postal Service.  The post offices don't belong to them.  Those are our post offices.  They belong to the 99%.

NAPUS calls for a moratorium on post office closings

November 4, 2011

Yesterday, the National Association of Postmasters of the U.S. (NAPUS) called for a moratorium on post office closings.  That’s a big deal, and it will give the cause a lot of momentum. 

Calls for a moratorium on post office closing have been growing.  In August, Iowa’s Governor Terry Branstad called for one, and earlier this week Representative Nick Rahall of West Virginia wrote the Postmaster General urging him to declare a moratorium. 

Moratoriums on post office closings are unusual but they aren’t unprecedented.  Back in 1975, a GAO report recommending the closure of 12,000 rural post offices led to a storm of protest, Congressional hearings, a commission to study the Postal Service, and a moratorium on closing or consolidating any post office until the commission published its findings. 

In 1998, under congressional pressure, the Postmaster General declared a moratorium on closures and consolidations because there was suspicion in Congress that the Postal Service was using “emergency suspension” tactics to close post offices illegitimately. 

Yesterday’s call by NAPUS for a moratorium came in a letter from Bob Rapoza, President of NAPUS, sent to key members of the Senate Homeland Security & Government Affairs Committee about the “21st Century Postal Service Act of 2011" (S. 1789), introduced by Senators Lieberman, Carper, Collins and Brown. 

“We urge the Committee,” wrote Rapoza, “to include in the legislation the imposition of a moratorium on post office closings and consolidations, until such time as the retail service standards specified in section 204 can be fully implemented.”

Most of the 21st Century Postal Service Act of 2011 is simply lousy.  It embraces the idea that the Postal Service needs to be radically downsized, it permits ending Saturday delivery in two years, it phases out door-to-door delivery, it backs off of demanding that the Postal Service be refunded from the $50 to $75 billion overpaid in to CSRS, and it would give postal workers health care benefits inferior to what they enjoy now.

Rapoza’s letter also expresses concern over the health care provisions in the Act, which would require some postal retirees to enroll in Medicare Part B, thereby reducing their level of coverage.  He also said NAPUS was “troubled" that the legislation does not include management and supervisory association input in the development of a postal-only health plan.

But in terms of protecting small post offices, the 21st Century Postal Service Act may have something to offer, and it’s better than most of the proposed legislation going around Congress right now.  That’s because the Act contains a passage about “service standards” that are intended “to guarantee accessible postal products and services.”

The first RAOI post office closes, more Village Post Offices open, but where's the hoopla?

November 2, 2011

It looks like the first post office on the Retail Access Optimization Initiative (RAOI) may have closed already — weeks ago, in fact — but somehow the news slipped by under radar.  Plus, five more “Village Post Offices” (VPOs) have opened over the past few weeks, and hardly a word from the Postal Service about that either.  Today we learn from an article in Reuters that the Postmaster General is backing off the VPO “concept” altogether and revising plans for closing thousands of rural post offices.  Turns out many of the small towns where they planned on locating a VPO in a small business, like a mom-and-pop convenience store, don’t even have a place to put the VPO. 

 

New Village Post Offices

It had been several months since the first VPO opened in Red’s Hop N’ Market in Malone, Washington, and it was starting to look like Red’s might be not only the first VPO but also the last.  Not so.  Several more VPOs have opened over the past month, but it looks like the Postal Service has decided a “soft opening” was the way to go. 

The first part of this VPO story was broken by Jay Bigalke in Linn’s Stamp Magazine, which recently reported that there were three new VPOs in Michigan — in Twining, Tower, and Brant.   Who knew?  There were a few short reports in the local Michigan media, but the openings occurred without any of the hoopla deployed by the Postal Service when the first VPO opened in in Malone.  That one was accompanied by photos, press releases, news reports featuring quotes from USPS VP Dean Granholm, and even a CNN TV spot.   

The Stamps article on the new VPOs came up during testimony before the Postal Regulatory Commission last Friday, when James Boldt, the man running the RAOI, was asked about it by PRC Chairman Ruth Goldway.  (The webcast is here.) There was some confusion about how many VPOs actually existed at that moment.  Boldt indicated that later the same day (October 28), a fourth VPO would be opening in Star Tannery, Virginia, but with one in Malone and three in Michigan, that would have been the fifth.  (And according to the Reuters article, there are actually six.) 

Boldt seemed almost giddy that another VPO “grand opening” would be happening in “just an hour,” and he was sorry he couldn’t be there and had instead to be present for a grilling by the PRC’s commissioners, the Public Representative, and representatives of the postmasters associations.  No doubt he would have preferred to be anywhere but the PRC hearing room.  But didn't Boldt get the memo?  Hadn't the Postmaster General told him that the Village Post Office concept was being revised and there was no reason to get too excited about another "grand opening"?

 

The VPO concept, come and gone? 

In July when the RAOI was announced, it was accompanied by the unveiling of a great "new concept" — the "Village Post Office" — basically a watered-down version of the "contract postal unit," which puts a postal counter in a private business.  There had been talk of opening a couple of thousand VPOs, and the Village Post Office concept was used to pacify citizens at many community meetings on post office closings.  "Don’t worry so much about losing your post office," USPS management told patrons at these meetings.  "We’ll replace it with a Village Post Office.”

But now Postmaster General Patrick Donahoe says, in the Reuters story that its plan to replace post offices with “Village Post Offices” will not work in many rural communities because there’s no business in which to locate the VPO.  "When you get west of the Mississippi,” Donahoe said, “it's more prevalent that you don't have stores in these communities, you have nothing in these communities. It's pretty much just the post office."  And they didn’t know this before they rolled out the VPO concept? 

The Postal Service says that at this point, in addition to the six VPOs already up and running, one more opens next week, four more are finalizing the deal, 30 others are in various stages of contract developing, and about 400 inquiries have come in. 

But it’s hard to imagine a significant number of VPOs ever opening.  The future is in putting postal services not in mom-and-pop convenience stores but in large chains like Walmart, Staples, and CVS.  These do not require the kind of one-on-one contract negotiation, training, and oversight required when a VPO opens in an owner-operated store.  The VPO was never going to happen on a large scale.  It was mainly a dodge so that it wouldn’t look like the Postal Service was abandoning its universal service obligation.  

In any case, the Postal Service is going to have to look elsewhere.  As the PRC’s Ruth Goldway put it in the Reuters article, “It's not going to be their great solution to the problem."  So now the Postal Service is talking about keeping some of those small rural post offices open, but for fewer hours — and for less pay and benefits for postmasters.

 

The first RAOI post office closes . . . maybe

In written response to a question from the PRC about the status of post offices on the RAOI, the Postal Service replied that "as of November 1, 2011, no Final Determinations have been posted as part of the RAO Initiative."  However, the post office in Tower, Michigan (49792) appears on the USPS website's RAOI "Expanded Study List" for Michigan.  And this news account sure makes it look like Tower closed.  Plus, the Tower post office no longer appears on the USPS Locator page.  

So it would appear that Tower, MI, is the first of the RAOI post offices to close.  But how could that have happened already?  The closing process implemented in July as part of the RAOI is supposed to take five months, so it seemed as if no post office would close under the Initiative until the end of the year.  What happened?

The RAOI list released on July 26, 2011, includes 265 post offices that had been initiated for closure study but had not progressed to the community meeting stage.  It’s possible that Tower was well along in the 60-day comment period by July 26, and perhaps a community meeting took place soon after.  Maybe the post office received its Final Determination notice in early August.  But the soonest it should have closed would have been 60 days later — early October.

A new call for a moratorium on closures, and more post offices may close, not on any list

November 1, 2011

Yesterday U.S. Rep. Nick Rahall (D-W.Va.) wrote a letter to the Postmaster General urging him to declare a moratorium on closing post offices.  It was the second such call for a moratorium from a high-ranking government official, following Iowa Governor Branstad's request in August.  

Yesterday also brought news of two post offices being studied for closure that do not appear on any list — a small rural post office in Tilly, Arkansas, and a large post office in Harlem.  Apparently the Postal Service is not satisfied with the 4,300 post offices that appeared on the two lists that came out in July, and it’s looking around for even more post offices to close.

 

Another Call for a Moratorium

Congressman Rahall’s letter to the Postmaster General expresses his concern that the concerns of his constituents are not being seriously considered when the Postal Service studies a post office for closure.  Rahall has received reports that town meetings with postal officials are scheduled at inconvenient times (like during Halloween preparations in Kiahsville), that the post office in Amigo was closed before rural delivery was established, and that there are so many meetings going on — 40 in the Appalachian District — that it raises doubts that the postal service can appropriately manage the public feedback. 

"The public view is that a post office’s fate is predetermined and that a meeting’s purpose is a perfunctory step in the closure process, instead of being used to truly assess legitimate safety and convenience issues, and taking steps to minimize the adverse impact on the community," Rahall wrote. 

The Congressman also pointed out that three of the four criteria used to select a post office for closure study “are financially based and clearly target small facilities that are not heavy revenue producers” – which conflicts with Postal Service's statutory charter requiring it to provide "a maximum degree of effective and regular postal services" to rural communities where post offices are not self-sustaining. 

That law explicitly prohibits small post offices from being closed solely for operating at a deficit, so the Postal Service has been coming up with several other reasons, like the absence of a postmaster (which the Postal Service controls) and proximity to nearby alternative retail facilities (which the Postal Service has developed to replace post offices).

In addition to a moratorium on postal facility closures, Rahall is also asking the Postal Regulatory Commission and the postal service's inspector general to "exercise their oversight authorities to the fullest extent in ensuring these postal closures conform strictly to the spirit of the law." 

 

New post offices studied for closure: Tilly and Lincolnton

The post offices in Tilly, Arkansas, and on upper Fifth Avenue in Harlem, couldn’t be more different — a tiny rural post office staffed by a postmaster and a postmaster relief, and a big urban station with 33 clerks and carriers.  But they are similar in one important way — they serve populations that are the most hurt when a post office closes.

Yesterday, residents of Witts Spring, Arkansas, were told that their post office was being removed from the RAOI list.  But good news for Witts Spring meant bad news for its neighbor, Tilly, which learned that it would be considered for closure study instead.  The Postal Service has been renting the little building in Tilly since 1980, and the rent is just $600 a year — $50 a month.  The postmaster will presumably be moved to another post office, so there’s no cost savings there.  What can the Postal Service possibly gain by closing this little office?  And how could that savings possibly make up for the damage it will do to Tilly?

The Lincolnton Station is located in New York’s Harlem, at 2266 5th Avenue, at the corner of 138th Street.  There’s going to be a meeting with postal officials on Tuesday, November 22nd, at the station lobby from 6 p.m. to 8 p.m.  The public is encouraged to attend.  Perhaps postal officials will tell the community what’s going to happen to the station’s 33 employees.  The nearest post office is College Station, a half mile away, but it’s got 14,000 square feet, whereas Lincolnton has 22,000, so there’s probably not enough room for all those displaced workers.  That half mile to the next nearest post office may not seem like much to most people, but a half mile in NYC isn’t a half mile in Arkansas and it will be a long distance for Lincolnton patrons to cover.  And while it’s tough on any community to lose a post office, it’s especially hard on an inner city neighborhood, where so many people walk to the post office and nearby small businesses depend on the foot traffic. 

[CORRECTION: The Lincolnton Station is not being studied for closure: the meeting was at Lincolnton, but it was about the nearby College Station, which is on the RAOI list.)]

These two offices are among a handful first being studied for closure that never appeared on any list.  There’s another in Plattsmouth, Nebraska, which learned a few weeks ago, right out of the blue, that it was being studied for closure.  It’s hard to know what to make of this. 

Many post offices have closed or received final determination notices this year, but almost all of them were initiated for closure study in 2010 or early 2011, or else they appear on the July 27, 2011 list of 727 post offices under closure study outside of the Retail Access Optimization Initiative (RAOI), with its list of 3,650 post offices.  

The Deputy Postmaster General said recently that there would be another list of 4,000 coming soon, but apparently the Postal Service isn’t waiting until then.  It’s not enough that it’s closed 280 post offices this year, issued final determinations for another 300, and has over 4,000 under closure study.  If the Postal Service wants to consider a post office for closure, it doesn’t matter whether it’s on a list or not.  That means no post office is safe.  Yours might get a “proposal to study” notification any day now.

(Photo credits: Plattsmouth NE post office, vintage postcard; US. Rep. Nick RahallKiahsville WV post office; and Lincolnton NYC post office, by Evan Kalish (Going Postal); Tilly AR post office, Google Street Views.)

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