December 2011

Oregon Occupies the Post Office

January 1, 2012

From the Rural Organizing Project:

On Monday, December 19, the Rural Organizing Project coordinated rallies across the state of Oregon to protest the Postal Service’s plan to close rural post offices.  Over twenty-three communities  fought back against Congress' move to privatize the Postal Service for corporate profit.  Monday proved just how much rural Oregon cares about core community infrastructure that supports EVERYONE, not just the 1%.  We sent a clear message: we USE and OCCUPY our Post Offices!

You can help save rural post offices!

Sign our petition to Congress demanding that they FIX the USPS' financial crisis that they created in 2006 and that they save rural post offices!

Be sure to check your email on January 2: Our January Kitchen Table Activism will be out to collect signatures across Oregon so we can hand-deliver 3,000 signatures to Congress this February!  If you want to get started early, download the petition and signature sheet!

Read about the amazing work of each community — from the tiny town of Deadwood (population less than 200!) with its own Pony Express to signature collection of half of the population in Fort Klamath.  Check out the slideshow featuring pictures from across the state!

Here’s a rundown of what happened on December 19:

Deadwood: The parking lot of Deadwood's Post Office and General Store has never been as full as it was on Monday!  The Deadwood Pony Express — a pair of giant draft horses — pulled into the parking lot from 10 am to noon while 80 locals rallied to save their Post Office!  Everyone in town came, even the local loggers and construction workers.  One local construction worker parked his backhoe in the parking lot and put an "Occupied" sign in the bucket!  Families shared how important the post office is, ate cookies, signed the petition, and gave the Postmaster gifts of appreciation.  At the end of the day, the petition had 164 signatures — an impressive feat for a community with a population less than 200!

"The parking lot was full of folks chatting and meeting for the first time," said Leslie Benscoter, retired schoolteacher and Occupy the Post Office organizer in Deadwood. "Despite our differences, every single member of the community came out to rally around the one thing that brings us together: our post office. I have lived in this community more than fifty years and I still managed to meet new people."

The RAOI Advisory Opinion: A Transformative Moment or a Bump in the Road?

December 30, 2011

It’s been a week since the Postal Regulatory Commission (PRC) issued its Advisory Opinion on the Retail Access Optimization Initiative (RAOI), the Postal Service’s plan to close 3,652 post offices.  The Postal Service has yet to issue a reply.  Maybe the attorneys and strategists in postal headquarters just don’t know what to say.

The Advisory Opinion says the plan to “optimize” the postal retail network won’t optimize it at all, and the PRC identifies several flaws in the plan that need to be addressed if the Postal Service wants to close a significant portion of its retail network.  The decision has to take some of the wind out of the sails of the effort to close post offices, cruising along as it was, with over 500 closings this year and thousands more on the horizon.

The Advisory Opinion was unanimous, which will add even more weight to the decision.  This consensus represents a considerable achievement for the four Commissioners, who have been regularly disagreeing over appeals on post office closings.  Since December 12, the day before the Postal Service declared a five-month moratorium on closings, the PRC has ruled on eighteen appeals.  Four were remanded back to the Postal Service for further consideration — a victory for the appeal — while the remaining fourteen were decided in favor of the Postal Service’s determination to close the office.  The Chairman of the PRC, Ruth Goldway, dissented on all but one of those rulings, and Commissioner Nanci Langley joined her on ten.  Most of the decisions were thus two-to-two votes (a remand requires a majority).  The Commission is clearly divided on the issue of appeals, yet it was able to find consensus on the RAOI. 

The Advisory Opinion could turn out to be a transformative moment.  It will provide support to those in Congress looking to slow down or stop the closings, and it might persuade the Postal Service to re-think its plans to eliminate half the country’s post offices.  Seeing how much public protest the closings have provoked — and how much attachment people feel for their post office — might even lead the Postal Service to embrace the post office.  Rather than jettisoning post offices as unwanted baggage, as nostalgic icons of the postal past, perhaps the Postal Service will begin thinking about how to take advantage of its network of post offices, how to expand the products and services they offer, and how to take the post office into the 21ST century.

More likely, though, the Postal Service will see the RAOI Advisory Opinion as merely a bump in the road, just another “barrier to retail network optimization,” as a June 2011 GAO report put it.  The Postal Service will probably cite a few passages in the Opinion to support the validity of its commitment to closing post offices, and then find fault with the Opinion in other respects.  The Postal Service attorneys complained during the hearings that they weren’t given adequate opportunity to fully explore particular lines of questioning and to challenge some testimony, and they may make hay of those objections.  Just to appear reasonable, if nothing else, the Postal Service will probably accept some if not most of the PRC’s recommendations, with an eye toward implementing them quickly so that it can get on with the plan.

"Pray for the Postal Service!" by Philip F. Rubio

December 28, 2011


“Pray for the Postal Service!”  That was the last line that our letter carrier wrote on her holiday card to us, after we had left her a holiday card the day before thanking her for her service over the past year.  We do that every December like many other postal patrons in the United States.  I think my wife and I started doing that after I started carrying mail in 1980 in Colorado (I finished my career in North Carolina). 

December was actually my favorite month to deliver mail despite the stress and pressure of getting all the extra holiday mail out with less daylight in which to work.  The “up” side to that pre-Christmas rush was getting cards, cookies, and verbal expressions of appreciation from people on my mail route.  That gratitude was a vote of confidence for having tried hard all year to get it right every day: no misdeliveries, no forgotten “vacation holds,” no damage done to any mail. 

Even with 171 billion pieces of mail delivered in 2010 (about 37 billion fewer than the nearly 208 billion pieces in 2000, the year I left the U.S. Postal Service to go to graduate school, and 42 billion fewer than the high water mark of 213 billion pieces in 2006), the U.S. Postal Service still delivers 40% of the world’s mail, connecting Americans with each other and the rest of the world. And this year it delivered almost 17 billion letters and parcels between Thanksgiving and Christmas alone..

But in my twenty years of delivering mail I never thought that I or anyone else would feel moved to write something on a holiday card like “Pray for the Postal Service!”  Sure, there were calls by some even back then to privatize the USPS.  And it was always unnerving to hear.  But they had no firepower, so it was no major concern.  So what happened since then?

*   *   *   *   *   *

The U.S. Postal Service today is most definitely not a dying entity as some popular fables have it, but it is under attack like never before.  The source of the current crisis is the 2006 Postal Accountability and Enhancement Act, which began imposing an unreasonable and unnecessary annual burden on the Postal Service that essentially says: “Come up with $5.5 billion a year for the next 10 years to cover 75 years worth of retirees' health benefits.” 

Even with the worst recession in 80 years and a significant drop in mail volume, the Postal Service has managed to earn a revenue surplus of $611 million dollars over the last four years.  Unfortunately, the prefund requirement turned those profits into deficits, forcing the Postal Service to look for drastic cuts in service to keep from going bankrupt.

Six months ago, you rarely saw or heard the above argument made in op-ed pieces, articles, or news reports in the mainstream media.  Now it’s not only common to see and hear those kinds of arguments, but many media outlets even express sympathy for that point of view.  What changed?  Thanks to relentless pushback from post office supporters, especially postal unionists, those who seek the dismantling of the post office have lost their absolute control of the “post office is obsolete” narrative. 

This momentum shift is encouraging.  What’s still dispiriting, though, is the fact that the law remains unchanged and as destructive as ever. 

That same 2006 law also made it more difficult for the Postal Service to expand its services to make up for losses in first class mail volume.  It's important to remember that throughout its 236-year history (including the first 196 as the U.S. Post Office) the Postal Service successfully anticipated and responded to consumer demand while still fulfilling its constitutional and congressional mandate to provide universal service. 

It’s also important to remember that in 1971 the Post Office became the U.S. Postal Service following an eight-day nationwide postal wildcat strike in 1970 against low pay, followed by the 1970 Postal Reorganization Act.  The new U.S. Postal Service remained a government agency providing universal service at uniform rates, but was also mandated to operate more like a business and become self-supporting with no taxpayer subsidies. 

This new government/corporate hybrid status was good in some ways, not so good in others.  Under the new law, postal employees — the vast majority of them unionized — enjoyed full, not just partial, collective bargaining rights over all issues, although the USPS is still subject to congressional oversight.  The Postal Service also became more efficient in mail processing thanks to higher worker productivity and capital investment in technology. 

The Postal Service still enjoys an exclusive right to handle first-class mail, with mailboxes only accessible to the Postal Service, but is disallowed from competing directly in certain areas with private sector delivery companies.  Yet while being mandated to provide universal service (that is still one of the cheapest and most efficient in the world), regardless of overhead, rising gas costs, etc., it must also depend entirely on revenue.  If not, it would go bankrupt. 

In that way, the 1970 Postal Reorganization Act set the Postal Service up to be more vulnerable should anything interfere with its ability to be self-supporting.  It has managed to remain self-supporting since then (no government subsidies since 1982).  But despite the USPS’s ability to grow, adapt, and innovate over two centuries, today many suddenly argue that because of the World Wide Web (by contrast only 17 years old) there is no more need for a government-run post office. 

Bizarrely, conservative pundit George Will, who regularly rails against progressives and progressive public policy, recently wrote: “The main culprit for the USPS’ woes is progress.  That includes email…the digital delivery of movies…and those pesky private-sector delivery companies.”  (“Deliver the Mail to New Hands,” Raleigh News and Observer, November 27, 2011, p. 25.)  Meanwhile, Christopher Shaw’s book Preserving the People’s Post Office has documented the diminished service/higher rates/job loss fiasco of privatizing public mail service in Argentina, Finland, Sweden, and New Zealand.  “Don’t it always seem to go,” Joni Mitchell once sang, “that you don’t know what you got ‘til it’s gone?” 

Thirty percent of Americans do not access the Internet, according to a U.S. Department of Commerce report in February 2011.  (It's tempting to add that 70% of Americans are at one time or another still waiting for the Internet to load or come back up.)  But not only is the Postal Service used for important business and correspondence, it is actually picking up parcel business from Internet orders, including "last mile delivery" business from UPS and FedEx. 

Those two companies serve at most 20 million addresses, while the Postal Service serves 150 million American homes and businesses, with 2 million new addresses each year, handling 40 million address changes per year as well.

Furthermore, the Postal Service is currently exploring the use of expanded digital services such as "eMailbox" and digital currency operations for unbanked citizens — among other things — that will help it provide universal service on a secure digital platform in what is now a private and often chaotic medium.  Even a top Microsoft executive in 2008 acknowledged that the Postal Service (the public's most trusted government agency in polls taken year after year) could "meet the public need for trusted electronic communications in a way that no private sector organization could rival" (The Postal Service Role in the Digital Age,  p. 10).

Those new services and others, however, would likely have to be approved by Congress, which in the 2006 postal law imposed limitations on services that the Postal Service could provide that might compete with the private sector. 

*   *   *   *   *   *

The Postal Service, in short, needs no government bailout, unlike a number of major private sector corporations and banks that have survived in the last few decades only after being saved by taxpayer money. 

Instead, the Postal Service needs Congress to act quickly to prevent its unnecessary and potentially devastating collapse as a vital communications and commercial link, as well as the hub of a $1.3 trillion dollar and 8 million job mailing industry.   

How likely is that to happen?  H.R. 2309 (Ross-Issa) is on the floor of the House.  It would effectively dismantle the USPS with an unelected “solvency authority” empowered to cut wages and benefits as well as impose massive layoffs and closures of post offices and mail processing centers.  Meanwhile, H.R. 1351 (Lynch), which would use the USPS’s pension fund overpayments (about $50 billion) to relieve the prefund artificial debt burden, is still stuck in committee despite having 227 co-sponsors.  Over in the Senate, S. 1789 (Carper), with its positive features to allow the USPS more competitive opportunities, nevertheless would also allow cuts in Saturday delivery and not relieve that prefunding debt burden.  

Week in Review: Tis the Season

December 27, 2011

The big news of the week was the Advisory Opinion issued by the Postal Regulatory Commission (PRC) on the Retail Access Optimization Initiative (RAOI), the Postal Service's plan to close 3,652 post offices.  The PRC concluded that the Optimization Initiative, “notwithstanding its name, . . . is not designed to optimize the retail network,” so the Postal Service should come up with a better approach if it wants to close post offices.  The decision will probably put a damper in the Postal Service’s plans, but it’s just an opinion and the Postal Service is not obligated to accept the PRC’s recommendations.  The Advisory Opinion requires a blog post of its own, so more on that tomorrow.  Here’s a summary of other news of this holiday week.

Season’s greetings: As the PRC was completing its Advisory Opinion on the plan to close post offices, it was also getting started on a new Opinion on the USPS plan to close processing plants.  The Request for an Opinion on the Network Rationalization plan was filed on December 5, and since then, several individuals and organizations have filed a “Notice of Intervention” with the PRC indicating intent to participate: the National Newspaper Association (NNA), the Direct Marketing Association (DMA), the Association for Postal Commerce (PostCom), the National Association of Letter Carriers (NALC), the National Postal Policy Council (NPPC), the Greeting Card Association (GCA), the National Association of Postmasters of the U.S. (NAPUS), the National Postal Mail Handlers Union (NPMHU) the American Postal Workers Union (APWU), Time Inc., and two individuals, Douglas Carlson and David Popkin.  The deadline for filing a Notice of Intervention is December 30, so there’s still time for other interested parties to get involved. 

Five of the participants have already submitted their first “interrogatories” (questions and requests for information), and the Postal Service has replied to three of them.  The Greeting Card Association asked a couple of pointed interrogatories.  One was about the timing of the Request for an Advisory Opinion: “Did the Postal Service, in deciding on the timing of this filing, consider the possibility that the filing, plus any related media coverage, could adversely affect the willingness of customers to use the mails for purposes and at levels commonly found in the end-of-year holiday season?”  The Postal Service replied that it is “aware that ‘bad news' about its financial circumstances could cause some mailers to be less willing to use it products and services,” but the holiday season had nothing to do with the timing of the Request.  What was the Greeting Card Association implying?  That the Postal Service wanted to drive down mail volumes to make its dire condition look even worse, thereby helping to justify the consolidation plan? 

The Greeting Card Association also noted that the volume of First-Class mail (FCM) for 2008-2010 averaged almost exactly what it averaged 1998-1990 (about 85 billion pieces).  Why, then, asked the GCA, does the Postal Service believe “it must eliminate the overnight delivery standard to deliver the same FCM volume that it could deliver overnight not many years ago?”  The Postal Service answered, basically, that the comparison was irrelevant. 

Unbinding the Nation: America and the Post Office

December 24, 2011

[Yesterday the Postal Regulatory Commission (PRC) issued its Advisory Opinion on the Retail Access Optimization Initiative (RAOI), the Postal Service’s plan to close 3,652 post offices.  On this Christmas Eve, Mark Jamison shares his thoughts on reading the Opinion.]

THE RAOI OPINION points to a very unsettling possibility.  Small post office closures are not about “rationalizing” the network — they offer minimal cost savings.  What these closings do, in a very insidious way, is break the bond between communities and the Postal Service.

While we commonly speak of the USPS as a business, a vast segment of the population views the Postal Service as something very different.  We often talk about how communities and individuals incorporate the presence of the local post office into their local identity.  That connection carries with it some very important connotations relating to reliability, accountability, and the essential nature of postal services. 

For a number of years the Postal Service has tried to reimagine itself as a purely corporate entity.  One of the ways it has done this is by homogenizing itself the way a franchise operation might.  When the Retail Standardization program was introduced many years ago, one of its stated goals was to make each office look and feel the same as every other office.  Only approved signage and messaging could appear in lobby areas.  Local displays, like showing artwork from local elementary students, were not only discouraged but outright prohibited.

The effect of this was less about branding and marketing than it was about breaking parochial connections.  The Postal Service wants individuals to connect with it as customers, as consumers of a product, and it wants this to be the sole basis of the relationship.  In order for the Postal Service to realize the vision of itself as corporate enterprise, it must effectively break the bond and connection people feel for it as citizens and community members.  The relationship must be viewed as solely economic in nature.

No one can deny that there is an element who would like to see the Postal Service privatized.  What's happening, though, is more than an ideological expression of what government should or should not do or what could be done more effectively by the private sector.  What we are seeing is essentially a predatory identification of $62 billion in revenues that flow through the Postal Service.  Those revenues represent a significant opportunity, more than merely a matter of low rates for the mailing industry, but the realization that those revenues could be captured and redistributed more "advantageously."

In order for that to happen, it is essential to break the bond of the American people with the post office, a bond that represents an intangible connection of people and communities with their government but also each other.  What better way to do that than remove the presence from the smallest of communities?  What better way to do that than remove the most human point of interaction?  The idea of the postmaster as community institution and the post office as a repository of community identity must be destroyed in order for the vision of the Postal Service as corporate entity to become fully realized. 

Throughout the RAOI proceedings, people have spoken eloquently about this bond and connection.  People have spoken emotionally about local attachment and identity.  People on both sides of the issue understand this.  The Postal Service and the mailing community would like to dismiss the value of this bond.  For example, in its Request for an Advisory Opinion on the mail processing plant consolidation, the Postal Service refers to people’s desire to preserve “a tangible link to an iconic past, or to perpetuate a nostalgic image of the agency or its employees.”  The Postal Service believes that this desire is holding the agency back from remaining “viable” and “relevant.”

There are others, especially politicians, who pay lip service to the importance of the connection people feel to their post office.  Some genuinely sympathize with the feeling, but struggle to quantify or prioritize it.

Acknowledge it as we do, there’s something about this bond that we just can't seem to completely grasp.  We want to recognize the existence and even the importance of this sense of attachment, but only as an element of a greater discussion about postal services.  The thing is, it is not merely an element of the discussion — it is the discussion.  The RAOI is demonstrably not about efficiency or cost savings.  It is solely and completely about dissolving the bond and connection the Postal Service has with people and communities and replacing it with a purely commercial relationship.

“Binding the nation together.”  We repeat that phrase and we give it importance and honor, but do we understand it?  The idea of the post office binding the nation together physically, intellectually, and even commercially is immense.  But even more immense is the idea that we are bound by certain concepts, by ideas, by certain truths.  Our vision of ourselves as a nation is something greater than the sum of the practical parts we can identify.  That's what Jefferson was saying in the Declaration and that's what Madison was trying to imbue in the Constitution.

Binding the nation together is more than connecting the nodes of a network or providing a specific service.  It is a basic truth by which we identify ourselves. The Post Office, as an institution, is a physical and intellectual representation of that basic truth.  We may find better and more efficient ways to deliver the physical services provided by the Post Office.  We probably have to agree to make those choices under economically sound circumstances.  But if we choose to change the way we provide postal services, we should not turn our back on the essential bond that the Post Office has represented.

The Postal Service propaganda machine kicks into gear

December 23, 2011

Over the past couple of weeks, numerous local news outlets around the country have published op-ed pieces and "letters to the editor" written by District Managers of the Postal Service.  The writers argue that Congress needs to give the Postal Service more freedom to act like a business so that it can return to profitability.  They advocate going to five-day delivery, allowing the Postal Service to more effectively manage its health care and retirement systems, optimizing the processing and delivery network, and replacing brick-and-mortar post office with postal transactions in gas stations, grocery stores and pharmacies.

The interesting thing about these opinion pieces is that, with a few minor variations, they are all the same — word for word.  Fifteen District Managers submitted the same editorial to their local newspaper, signed with his or her own name, even though the piece was written by some unnamed person in postal headquarters.  A few of the authors took the time to move the paragraphs around or to add a sentence or two of their own, but by and large, it's the same piece, over and over again.  (Update: Make that twenty-eight DMs.)

It’s no surprise that District Managers would be handing out the company line like that.  They do it all the time at public meetings about post office closings.  But putting your name on an editorial that someone else wrote seems odd, to say the least.  One wonders how many of those Op-Ed-page editors would have published the piece if they knew that it was written not by a respected USPS executive living in the area served by the newspaper but by an anonymous person in Washington, DC.

It’s sad to see that postal headquarters did not trust its District Managers to express their own thoughts about what’s going on.  Was there really a risk that they would go off message or say the wrong thing?  Couldn’t these highly paid managers (a DM gets about $170,000 a year) write their own editorials?

If the postal propaganda machine is this clumsy about putting out a message, it makes one question whether they can get anything right.  Doesn’t the Postal Service have enough credibility problems already?

A couple of months ago the Postal Service issued a new "Social Media Policy" that limits the freedom of employees to express themselves on sites like Facebook and “Save the Post Office.”  These guidelines have had a chilling effect and made it very difficult for postal workers to say what’s on their minds.  Now it turns out even District Managers aren’t allowed to speak their minds. 

The message from Headquarters to postal employees is clear: Say what we tell you to say, or keep quiet. 

That might be fine if the Postal Service were a private corporation, but it’s not.  It’s an agency of the United States government, and everyone — including postal workers — ought to be able to express themselves freely and to criticize the government and its agencies if they want to.  

Week in Review: The plot thickens

December 20, 2011

The five-month moratorium on closing post offices and processing plants was the big news of the week, but that's not all that happened in postal world.  Here's a roundup of some of the week's news:

Occupy Oregon’s post offices: Yesterday, seventeen Oregon communities protested the Postal Service’s plan to close rural post offices across the state.  According to the Rural Organizing Project, the Occupiers carried Christmas cards, cookies and gifts of appreciation to their postal workers, as they sought to raise awareness about the impending closures and collect petition signatures.  Craig Frasier from Columbia County Citizens for Human Dignity explained the protest: “The Occupy movement means advocating for the 99%.  Rural and small-town Oregonians who are economically vulnerable rely on the post office for basic needs like getting prescription medications.  As a public service, the post office prioritizes getting the job done over turning a profit.  We all must take an interest in protecting it.”

Breaking up is expensive to do: Yesterday, AT&T gave up on its $39 billion acquisition of T-Mobile USA.  As a result, AT&T will pay a huge breakup fee to T-Mobile’s owner, Deutsche Telekom AG, for failing to complete the deal — $3 billion in cash and some of its wireless spectrum as well.  One of the seven banks advising AT&T was Evercore, the investment-banking firm founded by Roger Altman.  With the collapse of the deal, Evercore will get paid significantly less than the $18 million to $36 million it stood to make, but considering the whopping breakup fee, any payment is probably too much.  If you’re wondering what this has to do with postal world, the Postal Service recently hired a top banking firm to help “review and advise” the agency on "restructuring."  The name of the firm?  Evercore.

A moratorium — but not for all: The Postal Service's moratorium on closing post offices and processing plants until May 15  won’t stop many closings from proceeding as planned.  In a “pleading” before the PRC, the Postal Service says the moratorium does not apply to every post office, and it “will proceed with the discontinuance process for any Post Office in which a Final Determination was already posted as of December 12, 2011, including all pending appeals.  The Postal Service, however, will take the final step of closing a Post Office prior to May 16, 2012, only when that Post Office was not in operation on, and the Final Determination was posted as of, December 12, 2011.” 

It’s hard to say how many post offices fall into this category.  There are about 180 appeals still before the PRC, and a few of these post offices were “not in operation” on December 12 — like the post office in Pimmit, Virginia — so if the appeal is unsuccessful, these will be formally and finally closed during the moratorium.  There are probably others that closed for an emergency suspension and then received a final determination, so they too can close.  And the Postal Service has said nothing about more emergency suspensions occurring, so we can expect to see some of these as well, especially now that the Postal Service is pushing for lower rents and easy-termination clauses that many lessors won’t agree to.  Look for a couple of dozen post offices to close during the moratorium.

Confusing and unfair: The issue of closing post offices while the moratorium is in effect seems to be troubling the chairman of the Postal Regulatory Commission, Ruth Goldway.  The PRC issued rulings on four appeals this week.  Three affirmed the Postal Service’s decision to close the post offices — in Fishers Landing, New York; Pinehurst, North Carolina; and West Elkton, Ohio — and one — Enloe, Texas —remanded the case back to the Postal Service for further consideration.

Chairman Goldway dissented on all three of the decisions to affirm the closing, and Commissioner Langley joined her on the Fishers Landing case.  Goldway noted various problems in the three cases —  issues over how the Postal Service calculated cost savings, for example — but the moratorium figured into her decision on Fishers Landing:

“It is confusing and perhaps unfair to require some citizens whose post offices have received a discontinuance notice as of December 12, 2011 to gather evidence and pursue an appeal to the Commission, while others whose post offices were in the review process but had not yet received a discontinuance notice by December 12, 2011 have the respite of a five month moratorium.”

In the Pinehurst decision, Chairman Goldway wrote a lengthy dissenting opinion that cited several problems with the Postal Service’s case, including failure to adequately consider the closings effect on local businesses and on the historic character of the community.  The Pinehurst post office was built in 1935 by the New Deal.  The town, a well-to-do community planned by Frederick Law Olmsted, designer of New York’s Central Park, and famous for its golf courses, considered buying the building and renting space back to keep the post office, but the Postal Service doesn’t seem interested, and private businesses are working on a deal.

Reprieved: This week the Postal Service withdrew the final determinations to close five post offices — McFarlan, North Carolina; Balm, Florida; Campaign, Tennessee; Pomfret Center, Connecticut; and North Canton, Connecticut.  As usual, the Postal Service provided no explanation for why it decided not to close these post offices.

History on the market: The historic post office in Palo Alto, California, is for sale.  Since the Postal Service plans to move the post office to a smaller retail space, that’s considered a “relocation,” not a closing, so there’s no need to go through a full discontinuance process.  The same thing is happening in Venice, California, and residents there have filed an appeal with the PRC to save their New Deal post office.  The Postal Service says the PRC has no jurisdiction in such cases, but the case has not been decided, and its implications for Palo Alto, not yet clear.

The Palo Alto post office is a real gem ((photo at the top).  Built in 1932 in the last days of the Hoover administration, it was designed by architect Birge M. Clark, whose father was a friend of the president.  When the Postmaster General saw Clark’s designs for a post office in the Spanish Colonial style, he pushed them away, saying, ‘Don’t you know what a U.S. post office looks like?”  Clark calmly replied that the President and First Lady had already approved the design over breakfast that morning.  The Postmaster quickly approved the blueprints.  Maybe the current Postmaster General will have a similar change of heart, and save the Palo Alto post office.  (More on the story here.)

RAOI — unclear, inconsistent, needs improvement: The Advisory Opinion on the Retail Access Optimization Initiative (RAOI) will be issued any day now, but in the meantime, the USPS Office of Inspector General (OIG) has already issued a report criticizing the initiative.  Entitled “Postal Service-Operated Retail Facilities Discontinuance Program,” the audit report identifies several problems with the RAOI.  A random sampling of the 3,652 post offices on the RAOI list revealed that many did not meet the criteria that put them on the list.  For example, 63 of the 93 post offices (68%) in the category of “offices earning less than $1 million in annual revenue and have five or more access points within a half mile” did not have that many access points.

Beyond such details, however, the OIG report says the Postal Service “should develop a business plan to clearly define the organization’s strategy to close approximately one-half of its Postal Service operated retail facilities over the next several years.”  That plan should clarify what specific changes will be made, how long it will take to make them, and what the anticipated benefits are. 

Amazing, isn’t it, that the Postal Service would begin to close half the country’s post offices and still not have in place an “integrated strategy” and “economic model” about what it’s up to, and why.  

Another interesting detail in the report occurs in the Postal Service's reply, a five-page letter responding to the OIG's criticisms and recommendations.  In a forgivable but revealing error, the Postal Service refers to its "universal service obligation" as the "universal service delegation."  Or maybe that's not a mistake — maybe the Postal Service is just thinking ahead to when it delegates that obligation to some private corporation.

“The good fight” goes international: Saving the post office is getting international attention.  Yours truly of “Save the Post Office” was interviewed for an article in Neue Zürcher Zeitung, Switzerland´s biggest and oldest paper.  Most of the interview got cut, but there’s still a quote, though you’ll need to know German to make it out.

Phil Rubio, former postal worker and author of There's Always Work at the Post Office, has an excellent piece in the UK’s Guardian entitled “Who will deliver the US postal service from destruction?” “Don't blame the internet,” says Rubio.  “The USPS is the victim of an invented crisis.” 

And finally, best for last, Evan Kalish of “Going Postal,” is becoming an international celebrity.  This week he was featured in a terrific TV spot on BBC, and there’s more to come.  Stay tuned.

Photo credits: Palo Alto, CA post officeWalton, OR post office; AT&T & T-Mobile; Pimmit, VA post officeFishers Landing NY post office; Pinehurst, NC post office; Palo Alto post office interior; precipice cartoon.

Postal Service Declares a Moratorium on Closing Post Offices and Processing Plants

December 13, 2011

The Postal Service announced this afternoon that there will be a moratorium on the closings of all post offices and mail processing plants for five months — December 15 to May 15. 

That is welcome news indeed, and it will give the Postal Service and Congress time to work out a whole host of issues, including the $5 billion pre-funding to the retiree health insurance fund, service standards concerning post offices and delivery times, and Saturday delivery. 

This is the third time a moratorium has been declared on post office closings since the Postal Reorganization Act of 1970.  Were it not for this moratorium, post offices might have started closing at a dizzying rate come the first of the year.  Over five hundred have closed this year, and nearly a hundred more have already received Final Determinations indicating they were to close in January.  The 3,650 post offices on the Retail Access Optimization Initiative were bracing to hear their fate any day now, with the closures beginning as early as February. 

The moratorium announcement follows on the heels of a December 8 letter from twenty-two Senate Democrats to Congressional leaders asking them to  “include language in the next appropriations to prevent the USPS from closing or consolidating area mail processing facilities or rural post offices for the next six months. This six-month moratorium will give Congress the time needed to enact reforms necessary for the postal service to succeed in the 21st century.”  

Calls for a moratorium have been building for months.  In August, Iowa’s Governor Terry Branstad called for a moratorium on closing post offices, and in early November, Representative Nick Rahall of West Virginia wrote the Postmaster General urging him to declare a moratorium.

The two postmasters associations — NAPUS and the League of Postmasters — joined the call for a moratorium on November 3.  (An earlier post about the efforts of the League is here, and the NAPUS efforts, here.  The letter from NAPUS President Robert Rapoza to Senator Joseph Lieberman, chair of the Committee on Homeland Security and Government Affairs, is here.)

The postmasters associations have been pushing for “service standards” that would deal with the closing of small post offices — rules that would incorporate geographic and demographic considerations in closing decisions — and they succeeded in getting Lieberman’s committee to include an amendment to the postal bill about these standards.  The postmasters asked for a six-month moratorium on closings while the standards could be worked out.  

Then in mid-November, the Postal Service declared what it called a “suspension” on post office closings, to run from November 18 until January 3.  But that wasn’t a real moratorium, it was just for a few weeks, and its purpose was to avoid mailing problems during the peak mail volumes of the holiday season.  (And it didn’t stop a few post offices from closing, due to an emergency suspension or simply in spite of the hold on closings).

Today's announcement means there will be a real moratorium on post office closings and mail processing plant consolidations.  Come January, then, the Postal Service won't be announcing the closure of thousands of post offices on the RAOI list.  The Postal Regulatory Commission can now take some more time, if it so chooses, to work on the Advisory Opinion about the RAOI, which was due out any day now.  And it will take some of the pressure off the PRC to move quickly on the new Advisory Opinion on service standards and plant consolidations.

This moratorium will be the third moratorium on post office closings since the Postal Reorganization Act of 1970.  The first occurred in 1976, following a 1975 GAO report recommending the closure and consolidation of 12,000 rural post offices.  The report led to a storm of reaction, Congressional hearings, and the passage of the Postal Reorganization Act Amendments.  The Act established a commission to study the postal service and imposed a moratorium on closing or consolidating any post office until the commission published its findings.  That moratorium was in effect from September 1976 until March 1977.

In 1998, under congressional pressure, the Postmaster General declared a moratorium on closures and consolidations, and it was in place until 2003.  As a report by the Office of Inspector General explains, the reason for this self-imposed moratorium was "suspicion in Congress that the Postal Service was manipulating the emergency suspension procedure," which was the subject of a 1999 congressional hearing. 

"Save the Post Office" has been calling for a moratorium on closings since June 2011.  It seemed like a pipe dream back then.  Today it's a reality.  

A special thanks to the over 3,000 people who signed the petition calling for a mortorium on closing post offices.  You helped make it happen.


Week in Review: What a mess

December 11, 2011

A total mess: The big news this week, of course, was the Postal Service’s request for an Advisory Opinion on its plan to “rationalize” the processing network by closing 252 processing plants.  The Postal Service says the plan will save $2.1 billion a year.  Most of that savings would be in labor costs. The materials submitted for the Advisory Opinion, as detailed as they are, say only that the reductions will be "significant," but they do not venture a specific number.  News reports are saying that 28,000 jobs will be cut (in September it was 35,000).  As this excellent article (by Ryan Foley for the AP) explains, shedding that many employees is not going to be easy: “Most workers in the facilities are represented by the American Postal Workers Union, which reached a four-year contract in May guaranteeing that its 220,000 clerks and maintenance employees cannot be laid off or transferred more than 50 miles away.”  (This table of the plants slated to close shows that most of the “receiving plants” are more than 50 miles away, some of them way more.) 

Some workers may leave via attrition — early retirement or simply quitting in disgust and despair— but in the long run, any significant reduction in the workforce will require layoffs.  At some point, Congress will need to decide what to do about the no-layoff clause in the union contracts, but before legislators can get their act together — one way or the other — we’re going to watch a real disaster unfold.  “The downsizing or the demise of the postal service,” said John Zodrow, an authority on postal employment and labor relations, “it's going to be a mess and it's going to be a mess for a long time.”

Stakeholder vs. stakeholder:  The network rationalization plan would change “service standards” so that First-Class mail and periodicals will slow down by a day or more.  The periodicals industry is very concerned about news arriving late, and Time, Inc. —“the largest magazine publisher and the largest user of Periodicals Class mail in the United States” — has given “notice of intervention” to the PRC indicating that it will participate in the Advisory Opinion.  It looks like the rationalization plan will pit stakeholder against stakeholder — publishers worried about time-sensitive mailings will oppose the plan, while direct marketers concerned about low rates will support it.  The marketers give the Postal Service more business and may have more clout, but the publishers, well, they control the media message, and they’re going to be a lot more interested in this case than they’ve been in saving small rural post offices.  (By the way, this week's Time — that's the cover — features an updated version of an excellent article by Josh Sanburn about the Postal Service that appeared online a few weeks ago.)

More movement toward a moratorium on closings: Twenty Senate Democrats have written a letter to Congressional leadership asking them to “include language in the next appropriations to prevent the USPS from closing or consolidating area mail processing facilities or rural post offices for the next six months. This six-month moratorium will give Congress the time needed to enact reforms necessary for the postal service to succeed in the 21st century.”  That’s in addition to the amendment in the Senate bill that would put a halt on post office closings while “service standards” for post offices are worked out (these standards involve distances to the nearest post office and other geographic and demographic factors).  Congressional action may just not be fast enough to stop the post office closings, however.  Nearly 600 have closed this year, and come January, the Postal Service will start issuing Final Determination notices on the post offices on the Retail Access Optimization Initiative (RAOI).  They could number in the thousands.

Already optimal: There’s a very interesting blog post on the Save Our Erie Mail website by the APWU Erie Local 269.  The post challenges the basic assumption of the Postal Service consolidation plan, which basically says that “economies of scale” — consolidating lots of small plants into fewer large ones (operating 24-hours-a-day) — will be more efficient and cost less.  But there’s evidence that the size of your average processing facility is actually optimal for a business.  The post references Malcolm Gladwell's book The Tipping Point, which discusses something called the Dunbar number.  The thesis is that businesses with about 150 employees fare much better than those that are larger due to the "cognitive limit to the number of people with whom one can maintain stable relationships.”  Not that the Postal Service is very interested in that.

Mailers perplexed: The Postal Service is sending out mixed messages on the “exigent rate increase” — that’s an increase in postal rates that goes beyond the rate of inflation, which must be approved by the PRC.  The Postal Service requested the increase in July 2010, and when the PRC turned down the request in September, the Postal Service appealed the decision in court.  The court remanded the decision back to the PRC in May 2011, but the Postal Service, under pressure from the mail industry, withdrew the request in August 2011.  Then in November, the Postal Service renewed the request (at the same time expressing hope that legislation would allow it to withdraw the request yet again).  This week a group of industry stakeholders wrote a letter to the Postmaster General expressing its displeasure: “We are perplexed. In your presentations to the mailing community in recent months, we have heard you say repeatedly that you do not want an exigent price increase; an exigent increase will not occur.”  There’s probably a tussle going on in L’Enfant Plaza, with some executives arguing that the Postal Service needs the money, while others worry that increased postal rates will drive away customers and offset any revenue increases the higher rates might yield.  Businesses hate uncertainty more than anything else, so the Postmaster General’s flip-flops may be worse than the increase itself.

A tie favors the Postal Service: This week the PRC issued an order affirming the final determination to close the post offices in Francitas, TX, and Ida, AR.  Both decisions were unusual because in each case, the vote was two to two.  The two Republican commissioners, Mark Acton and Robert Taub, voted to affirm the Postal Service’s decision to close, while the two Democratic commissioners, Ruth Goldway and Nanci Langley, voted in favor of remanding the final determination back to the Postal Service.  According to PRC rules, the tie favors the Postal Service’s decision to close the post offices. 

In the case of Francitas, the dissenting commissioners objected to the closing decision because the post office near Francitas — the office designated to receive its boxes and retail services — is in La Ward, and the La Ward post office may close in a few months under the Retail Access Optimization Initiative (RAOI).  Chairman Goldway’s dissenting opinion also faults the Postal Service for other reasons, like inaccuracies in the cost-savings analysis.  As in many other discontinuance cases, the Postal Service did its calculations using the salary of a postmaster, even though Francitas has been managed by a postmaster relief or officer-in-charge for more than three years.

In the Ida dissent, Langley and Goldway simply wrote, “The financial analysis contained in the Postal Service’s final determination is seriously flawed. It misstates the record in several places, particularly, with regard to savings related to the existing lease.”

Absolutely insane: This week the APWU honored Derrick Watson with a 2011 Community Service Award for his efforts to keep the post office in Valley Falls, RI, from closing.  He lost the fight and the post office closed in August, but he stuck with it through the PRC appeals process, and he’s not a bit sorry.  He is unhappy with the PRC’s reasons for rejecting his appeal, though.  The Postal Service had claimed the post office was losing money, but that was largely because an office gets no revenue credit for parcels it accepts when a customer buys the postage online using services like the USPS e-bay program.  Watson was one of those e-Bay sellers, so he should know.  “That's hypocritical,” says Watson. “You ask people like me to buy postage on-line, but it's not credited to that particular post office, to that zip code being used. . . . They used that as a basis to close Valley Falls, which I find absolutely insane.”

Reprieve for the Venice post office: The sale of the New Deal post office in Venice, CA, has been suspended pending the outcome of the appeal filed with the PRC.  David Williams, VP of Network Operations, had previously stated that “there is no right to further administrative or judicial review” of the decision to sell the Venice post office, but the Postal Service has decided to take the post office off the market, at least for now.  There’s an excellent story about the latest news on the Venice post office by Greta Cobar in the Free Venice Beachhead, and there’s also a video of a recent protest.

Off the list: Photo-journalist Evan Kalish of Going Postal fame filed a FOIA request a few weeks ago, and this week he got some very helpful information about the status of post office closings.  Check out the list of 307 post offices removed from the Retail Access Optimization Initiative — these post offices will remain open (at least for the foreseeable future).  (We’ll update the Save the Post Office list and map using this new info asap.)

A not-so-small price to pay for the truth: The Pimmit branch of the Falls Church, VA, post office closed a few weeks ago, but attorney Elaine Mittleman has filed an appeal with the PRC.  In September, she submitted a FOIA request for Postal Service records concerning the decision to close the post office.  This week, she got a reply.  The Postal Service says that she does not fit the category of those exempt from paying fees for research time and copying (that would include journalists, academics doing research for their institution, and a few others), so she’ll have to pay the full fees.  Here’s the good part: The Postal Service has estimated the computer processing and personnel costs at a minimum of  $21,191.70, and they want her to pay half up-front: “Please submit your check or money order,” says the USPS letter, “in the amount of $10,595.85 made payable to the ‘U.S. Postal Service.’”  Right.  (By the way, for a related story on FOIA and appealing a closing, check out "They're Coming for Your Post Office.")

Corrections re: Hammond: In a post last week about President Obama’s nomination of Tony Hammond to the PRC, we wrote that he would serve a regular four-year term on the PRC, but that’s incorrect.   The regular term of a commissioner is six years, but more important, as we learned in a meeting of the PRC this week (podcast here), if approved by Congress, Hammond would finish out the term of Dan Blair, just until November 2012.  He could serve an additional year if no one has been confirmed to replace him, and there's a good chance that a commissioner confirmed to fill out a term like this would be on the short list for nomination to a full term, so Hammond could end up on the PRC for many years to come.  Sorry for the errors, but the main point of the post stands:  Appointing a Democrat would have been better for postal workers and communities facing the loss of their post office and processing plant.

Photo credits: Mail handler in Sioux City, IA (closed in October); this week's Time magazineErie, PA mail processing facility protest (being studied for closure); Seattle postal workersDirect Marketing Association websitegirl & po boxes in the Francitas post office (closed); Derrick WatsonVenice CA post office lobbyFOIA cartoon.

The Case for Consolidation: Overview of the Postal Service's Request for an Advisory Opinion

December 10, 2011

On Monday, December 5, the Postal Service submitted to the Postal Regulatory Commission (PRC) a request for an Advisory Opinion on the proposed changes in service standards associated with the consolidation of the mail-processing network.  The plan would close 252 facilities, put around 35,000 employees out of work, and save the Postal Service an estimated $2.1 billion a year.  It would also slow down the mail, particularly First-Class, which would be delivered in two or three days instead of one-to-three.  Delivery of periodicals would slow down as well.

Because it would have a “nation-wide” impact on the mail system, the Postal Service is required by law to submit its plan to the PRC for an Advisory Opinion.  But the PRC’s opinion is just that, an opinion, and the Postal Service is not required to take it.  The PRC, in other words, does not rule on whether or not the plan can be implemented.  According to comments made by PRC Chairman Ruth Goldway at a meeting of the PRC earlier in the week, the Postal Service has already indicated “it intends to move forward with service-standard changes regardless of what our [the commissioners’] views are” (podcast, at 42:30).

The Request itself is just over 15 pages long, but it is accompanied by testimony from thirteen witnesses (most of them employees at postal headquarters), as well as 36 “library references” — documents like Excel tables with data related to the testimonies.  The entire presentation is several hundred pages, and it will take a lot of work for participants in the case to analyze it, pose interrogatories to the witnesses, and construct critiques. 

This is a much more thorough and detailed presentation than that which the Postal Service presented for the Retail Access Optimization Initiative to close 3,650 post offices.  That one started with just one USPS witness presenting testimony, and most of the library references were filed later in the case, in response to information requests and interrogatories.  The fact that the Postal Service gave the service standards much more attention is just one indication of the magnitude and significance of the network “rationalization.”

Following is a summary of the Request and the witness testimonies.  The complete docket, N-2012-1, is here.


The Request [pdf]

The Request briefly outlines the nature of the service changes, the statutes that give the Postal Service the authority to make them, and a rationale for making them in the first place.  The Postal Service does not contest the fact that an Advisory Opinion is required.  The changes it is proposing will clearly have nation-wide impacts (one of the criteria that set the process in motion).  In fact, the Request states explicitly, “The service changes described in this request potentially affect every sender and recipient of mail served directly by the United States Postal Service, and are likely to affect most of them.”

As reported in the media already, “The most significant revisions would eliminate the expectation of overnight service for significant portions of First-Class Mail and Periodicals. In addition, the two-day delivery range would be modified to include 3-digit ZIP Code origin-destination pairs that are currently overnight, and the three-day delivery range also would be expanded.”

The Request does not elaborate, but the description of the plan published in the Federal Register in September explains that 40% of First-Class mail is currently delivered overnight, about 25% is delivered in two days, and the rest in three.  According to the new service standards, about half the mail would arrive in two days and the other half in three days.  In other words, instead of a 1-to-3 day window, it would become 2-to-3 days.  Delivery of periodicals would also slow down: Instead of a 1-to-9 day window, the new standard would be 2-to-9 days.  

"Time to Save the Post Office" by Ralph Nader

December 9, 2011

The battered national consensus behind a national universal postal service--conceived by Benjamin Franklin--is heading for a free fall due to bad management, corporate barracudas and a bevy of editors and reporters enamored with the supremacy of the Internet which makes up their world.

Postmaster General Patrick Donahoe is pursuing a strategy of cutting or delaying services while increasing prices. Usually that is a sure prescription for continuing decline. For Mr. Donahoe, the drop in first class mail has left the Post Office with over-capacity. So he is closing over 200 processing centers, and shuttering hundreds of post offices, including Philadelphia's original Ben Franklin post offices. He mistakenly thinks closing additional USPS facilities' will not result in revenue reductions and service abandonment.

Never mind the intangibles of convenience, safety (eg. receiving medicines) and collegiality that characterizes many rural, small town and suburban post offices.

Mr. Donahoe tells reporters that he is acting the way any beleaguered business executive would, even though he knows that the Postal Service is not just another big business feeding off corporate welfare. The USPS has not taken any taxpayer money since 1971.

By contrast the federal government has taken money from the USPS and owes our Postal Service between $50 and $70 billion dollars in excess retirement benefits payments. The other overpayments to the federal government are for the unprecedented advanced payment of health benefits of future retirees of the next 75 years by 2016, amounting to $5 billion a year (Congress is considering a bill to rectify this problem). Without corrective legislation, the Postal Service says it would have lost $8.5 billion this year. (By comparison, in addition to lost lives and destruction, the Afghan War quagmire costs the U.S. taxpayer over $2 billion a week.)

If all this sounds bizarre to you, it is. No other public department is a defacto creditor of the federal government. The USPS is a hybrid public corporation, created in 1970, from the old Post Office Department. It has been run into the ground on the installment plan by commercial competitors aggressively taking advantage of a weak-willed, unimaginative succession of postmaster generals ruled by a corporate Board of Governors ideologically rooting for corporate privatizers.

In his media interviews of woe, Mr. Donahoe talks precious little either about revenue increases or about long-overdue expansions of service. Abolished because of banking industry pressure in 1966, the Postal Savings System for simple savings accounts needed by tens of millions of "unbanked" Americans could be reactivated. Mr. Donahoe has been telling people that he's thinking about it, but this self-styled salesman has proposed nothing to date. (See the letter urging this expansion by the Appleseed Foundation, dated October 14, 2011, here.)  

More fun with charts: The Times graphs mail volumes

December 7, 2011

The New York Times has an opinion forum today with six contributors weighing in on the Postal Service’s plan to eliminate next-day delivery for first-class mail.  One of the contributors is yours truly, Steve Hutkins of “Save the Post Office,” so many thanks to the Times and editor Katy Roberts for the opportunity to tell a different story about what’s going on.  You can see the piece here, and there’s an excellent contribution from Frederic V. Rolando, president of the National Association of Letter Carriers, here.

Accompanying my piece is a graphic that shows just how badly mail volumes are dropping.  The graphic seems to challenge my main point — the “crisis” of the Postal Service is a “manufactured emergency.”  So let’s take a look at the chart.  (Click on it to enlarge, and click to return.)

The top line shows that “the great bulk of postal volume” was “in decline even before the recession.”   True, total volumes did decline a slight amount before the recession — there were 213 billion pieces in 2006, and 212.2 billion in 2007.  But the dramatic fall begins in 2008, when volumes dropped to 202.7 billion, and they dropped even more precipitously in 2009, to 177.1 billion.  (The recession officially began in December 2007.)

The second line in the Times’ chart is for “standard mail,” which obviously tanked during the recession.  That’s because a lot of standard mail is advertising mail, and advertisers didn’t have as much money to spend during the recession.  Those mail volumes are now leveling off, and they may start rising again if the economy can pick up steam. 

Note that both total volume and standard mail volume are actually still up for the decade (10% and 17% respectively).  Yet the number of postal workers handling all that mail has decreased dramatically since 2000.  Back then, there were over 900,000 postal employees; by 2010, the workforce had been reduced to about 672,000.  The Postal Service wants to cut it down to 425,000 by 2015. 

The next line in the graphic is for total first-class mail, and the Times writes, “This continues to erode, as people turn to electronic means to pay bills and writer letters.  About 15% of advertising mail is sent first class — that, too, is falling.”

Actually, before the recession, bulk first-class mail (much of it advertising mail) was increasing (albeit slightly) and making up for some of the loss in single-piece first-class.  Like standard mail, however, bulk first-class is very vulnerable to economic bad times, so it’s been declining too as a result of the recession.

The fourth line in the chart shows something called “first-class mail: transactions,” and it’s about paying bills online.  That’s down 3% over ten years — hardly anything to get alarmed about.

And finally, there’s a line showing the steady decline in personal first-class mail, down 31% since 2000.  As the graphic shows, this decline has been very steady, about 3% a year, or as the Times prefers to say, it’s “shrinking relentlessly.”  This is clearly about “electronic divergence” to the Internet and not the recession, but there’s nothing new about this problem, and it’s hardly an emergency that calls for draconian cuts.  It’s a long-term, gradual, systemic problem that calls for long-term, gradual changes — perhaps gradual downsizing, but preferably alternatives, like giving the Postal Service the ability to develop new products and services to make up for the lost revenue.

The theme of the chart is that mail volumes are declining dramatically, so there really is a “crisis” and my point in the article that it’s “manufactured” is simply wrong.  But the lines show that the steep declines in volume occurred in conjunction with the recession.  That’s the real crisis, and the Postal Service and others are using it to justify changes to the postal system that people have wanted to make for a long time — long before the recession.  

The following chart shows quarterly changes in total mail volume (by percent) since 1989.  As you can see, there are always ups and downs, but the three the periods with steep declines were all associated with recessions (the gray bars).  The "Great Recession" of 2008-2009 caused the steepest decline of all, by far:

The good, the bad, and the ugly: The Postal Service finds its own hired gun

December 6, 2011

Back in October, the National Association of Letter Carriers (NALC) looked to Wall Street for advice and took on some “hired guns” — the “car czar” Ron Bloom and the legendary investment bank Lazard.  It was probably a smart move.  Bloom has had a very successful career as both an investment banker and union advocate, and Lazard is widely regarded as "the king" of bankruptcy and restructuring deals.

Not to be outmaneuvered, the Postal Service went looking for a gunslinger of its own, and it has apparently found its Gary Cooper (or Lee Van Cleef anyway) in the “tall, well dressed, charismatic and famously connected” figure of Roger Altman, co-founder of the Wall Street investment firm Evercore.  (He even rides horses.)  

A couple of weeks ago, Bloomberg reported that the Postal Service had hired Evercore to “review and advise” the agency on "restructuring."  The news was widely reported, but the details were scant, so here's the rest of the story.

Altman is the ultimate wheeler-dealer.  Last year he made $6.5 million giving out advice and helping to make deals happen.  The Postal Service will probably be paying Evercore millions of dollars (the news reports don't say how much).  The big fee is not just for some savvy advice on restructuring the business model.   What Evercore brings to the table is influence.  As a profile in Fortune put it, Altman is "ultraconnected."  He may not even do any actual work on Postal Service issues or be directly involved in negotiations with Congress and the unions, but his name carries a lot of clout on Wall Street and in Washington, and in those circles, that means — and costs — plenty.

Altman has been shuttling back and forth between New York and DC for decades.  After college in Georgetown (he was a year behind Bill Clinton) and a business degree from the University of Chicago, he went to work at Lehman Brothers in 1974 and became a partner at age 28, the youngest in the firm’s history.  In 1977, he left Wall Street for Washington and became Assistant Secretary of the Treasury Department under Jimmy Carter. 

In 1980, when the federal government bailed out Lee Iacocca’s Chrysler with $1.5 billion in loan guarantees, Altman’s office in the Treasury was supposed to keep a close eye on where our tax dollars went, but when an employee working for him complained that Chrysler was being uncooperative about turning over the numbers, Altman fired the whistleblower

Aside from the creditors and workers who were forced to make huge concessions (thousands lost their jobs), the Chrysler bailout worked out fine for Iacocca and Altman, and they apparently became lifelong pals.  When Carter lost to Reagan in 1980, Altman returned to Wall Street for another stint at Lehman Brothers, and he brought with him a new client, Chrysler.  (In the 2004 election, Iacocca would “dump Bush” for President and throw his support for John Kerry, whose campaign was being advised by Altman.)

In 1992, when Clinton became president, Altman returned to the Treasury Department, and there was talk he’d be the next Secretary of the Treasury, but two years later, Altman was gone, forced to resign following controversy over conflicts in his testimony to Congress concerning the Whitewater real estate investigation.

Week in Review: More news, more of the same

December 4, 2011

Time for another “Week in Review” already?  Seems like only yesterday we were talking about more post offices closing, angry citizens speaking out at public meetings, appeal cases at the PRC, and off-base articles in the mainstream media.  This week, it’s more of the same.

Occupy the Post Office: This year December 19th will be the busiest day during the holiday season for post offices.  That’s the day dozens of communities across Oregon will be Occupying their Post Office.  A group called the Rural Organizing Project (ROP) is organizing an “Occupy Our Post Office” movement in the state.  They’re circulating petitions, sending out press releases, asking folks to sign holiday postcards to send to Congress, and encouraging people to deliver a holiday card to their local postmaster.  Their website has a lot of great information, sample letters to Congress, flyers, and more.

Tempers Flare: On Friday night there was a heated meeting in Queens, New York to discuss the Postal Service’s consolidation plan, which calls for closing down all the mail processing and distribution centers in Queens (photo at the top).  More than a hundred postal workers, dozens of area residents, and a few local politicians turned out, including State Senator Tony Avella (D-Bayside).  Commenting on the decline in service standards that the consolidations will cause, Avella put the situation nicely: “You are basically signing a death warrant for the entire postal service.”

More junk from the Times: The New York Times has an op-ed piece today by Elizabeth Rosenthal entitled, “The Junking of the Postal Service.” Its thesis is that since most mail is junk mail, why do we need Saturday delivery, daily mail delivery, or a state-run postal service at all?  “The fact is,” writes Rosenthal, “the primary beneficiary of the United States Postal Service today is arguably the advertisers whose leaflets and catalogs flood our mailboxes.”  (Strangely, the piece is accompanied by a photo of a postal worker dealing with hundreds of parcels, not bulk mail — a reminder, if you needed one, that there’s more than junk in the mail.)  Rosenthal does acknowledge that the Postal Service is a large employer (another article in the Times this week explains how Black Americans are hit hardest when the public sector sheds jobs), and she also mentions Ralph Nader’s point that the Postal Service “is a crucial delivery network for items like medicine in the case of national emergencies.”  And she notes that the Postal Service “still delivers essential communication to small subgroups that are not (yet) well connected online: the elderly and rural residents.”  But it’s Evite and Facebook that get the last word in the article, which is really just another call to privatize the postal system.

The "digital divide": That “small subgroup” not “yet” hooked up may not be so small after all.  There’s another op-ed in today’s Times, entitled “The New Digital Divide,” and it says the following: “Increasingly, we are a country in which only the urban and suburban well-off have truly high-speed Internet access, while the rest — the poor and the working class — either cannot afford access or use restricted wireless access as their only connection to the Internet.”  Millions are offline, others can only afford slow connections, and “a mere 4 out of every 10 households with annual household incomes below $25,000 in 2010 reported having wired Internet access at home, compared with the vast majority — 93 percent — of households with incomes exceeding $100,000.”  A large percentage of those households doing without are African-American and Hispanic.  Public libraries are overwhelmed with people who need to use a computer, and private Internet providers are jealously guarding their turf, making it difficult for the have-nots to join the haves. 

Perhaps if the Postal Service had gotten into the Internet business years ago — as many hoped it would — we wouldn’t be talking about the “digital divide” and the junk mail problem.  It’s not too late to extend the “universal service obligation” to email and the Internet.  Why not charge the Postal Service with the responsibility of making sure that every American has access to high-speed Internet?  The least we could do is put some public computers in post offices.   There are over 4,000 remote locations within the postal system that receive Internet service via satellite, and the Postal Service has the world’s largest VSAT network with 12,000 sites. This network could be put to use providing Internet to rural America, and if libraries can provide computers, why not post offices?  Anyway, while junk mail in the waste stream is a valid concern, viewing the post office as irrelevant is simply not good progressive thinking.  For a much more thoughtful take on why we need to save the post office, check out this piece by John Nichols in Nation.

What were you thinking, Mr. President? Obama nominates Hammond to the PRC

December 2, 2011

On Friday the White House announced that President Obama was nominating Tony Hammond as the fifth commissioner on the Postal Regulatory Commission (PRC).  No offense to Mr. Hammond, but that’s probably not good news for communities trying to save their post office or processing plant, and it’s not good news for postal workers either. 

The PRC is supposed to have five commissioners, but for months now, there have been only four, and we’ve been waiting to hear who the President would nominate to fill out the term of Commissioner Dan Blair, which runs to November 2012.  According to US Code, "Not more than three of the Commissioners may be adherents of the same political party."  Currently there are two Democrats — Ruth Goldway and Nanci Langley — and two Republicans — Mark Acton and Robert Taub.  Obama could have appointed a Democrat, but instead he chose Hammond, a Republican. 

It’s not that Hammond is ill equipped to be a Commissioner.  He was on the PRC from 2002 to 2010, and he served twice as its Vice-Chairman.  He obviously knows the ropes.

Still, with all those years on the PRC, you wouldn’t say Hammond brings a fresh perspective to the Commission, and he is definitely hard-core Republican.  For much of his career, he was a Republican political operative.  From 1989 to 1994, he was the director of the Missouri Republican Party, and in 1998 he was Director of Campaign Operations for the Republican National Committee.  Hammond was involved with postal matters during the ten years he served on Capitol Hill on the staff of Southwest Missouri Congressman Gene Taylor, the Ranking Member of the Post Office and Civil Service Committee.

Hammond also learned about the Postal Service when he worked as the VP of a direct marketing business.  That experience has probably given him a particularly sympathetic understanding of issues facing direct marketers, who play a big role in influencing postal policies, rates, and so on. 

Politics shouldn’t matter in PRC decisions, but they do.  Since Commissioners perform in a manner similar to judges, they are supposed to make rational decisions based solely on the evidence, independently of their politics.  But as we’ve seen with the Supreme Court, justices are human and inevitably influenced by their political persuasion. 

Nothing’s more political than postal business.  Efforts to downsize the Postal Service are greeted with applause by anti-government, anti-union Republicans, while Democrats have shown more interest in protecting postal jobs.  Since Republicans don’t like government regulation of business, they’re less inclined to favor a strong role for the PRC than Democrats might be.

But the Postal Service is not a private business, and postal politics often make strange bedfellows.  In the case of the exigent rate increase, for example, the mail industry actually found itself — at least for a moment — siding with the PRC when it turned down the Postal Service’s request for a rate hike last year. 

Preserving post offices is another unique case.  Elected representatives on both sides of the aisle have been hearing it from their constituents about post office closings.  That’s why proposed legislation coming out of a bipartisan committee in the Senate has an amendment that would make it harder to close rural post offices.  

The consolidation of processing plants is yet another case where geography often matters more than politics.  Many Republicans, who generally favor cost-cutting measures like closing plants, have been fighting to save the plants in their districts.  

Generally speaking, though, Republicans are pushing harder than Democrats to make the Postal Service act “like a business” rather than a public service.  The bill that comes out of the Republican-dominated House will give the Postal Service much more power to close post offices and slash jobs than the Senate version.  It’s Republicans who want to see the the union workforce drastically reduced in size and power, and there aren't many Democrats talking about privatizing the Postal Service.  

With a Republican-dominated PRC, it’s hard to imagine many appeals on post office closures winning a “remand” decision.  It’s been hard enough getting a victory with two Democrats and two Republicans.  Of the last twenty decisions, just two were remanded, and only Chairman Goldway has issued dissents from decisions to affirm the closing. 

You can get an idea of how Hammond feels about remanding decisions by looking at the dissenting opinion he co-authored on the case of the post office in Rentiesville, Oklahoma.  That office was closed for an emergency suspension in 2004, six years after the discontinuance process had been initiated.  In 2010, the Postal Service moved to formally close the post office based on data and public comments that were by that time twelve years old.  For that reason, the PRC remanded the decision for further consideration. 

In his dissent Hammond wrote, “Remanding this determination requires the Postal Service to engage in a process which will most likely yield the same result as the one it came to in this current case.”  As unusual as the Rentiesville case was, that kind of thinking could be applied to any closing decision the Postal Service makes, and it doesn’t bode well for future appeals.

What a difference a day makes: The Postal Service slows down the mail

December 1, 2011

Back in the day (circa 1755), it could take six weeks for a letter to go from Philadelphia to Boston if the weather was bad.  “It having been found very inconvenient to persons concerned in trade” for the mail to take so long, Postmaster General Ben Franklin gave orders to pick up the pace, and the delivery time was cut in half.  Thanks to innovation — from the Pony Express to auto-trucks and airmail — the speed with which the mail is delivered has improved year after year for the past two and a half centuries.  But if the current Postmaster General has his way, that’s going to change, and the mail is going to slow down.

Postcom reported yesterday that “the Postal Service will be filing its service changes with the PRC on 12/5.  Among the changes -- an adherence to the principle of servicing mail in strict accord with delivery standards, and the abandonment of the targeted ‘in-home day of delivery’ practice within Standard Mail.” 

The somewhat cryptic note presumably means that next week the Postal Service will submit a request to the Postal Regulatory Commission (PRC) for another Advisory Opinion.  Given the reference to "service changes," this one will apparently be about the Postal Service’s proposal to consolidate the mail-processing network and about the effects this will have on how fast the mail is delivered.  

The announcement came at a meeting of the Mailers' Technical Advisory Committee (MTAC), a group of representatives of the direct-mail business, who protect the interests of the industry by making recommendations to the Postal Service.  These meetings, we learn today, will apparently henceforth be restricted to industry insiders.  (More on that to come.)

Expect a press release from the Postal Service early next week and maybe an interview with the Postmaster General about how relaxing delivery standards is regrettable but inevitable because mail volumes and revenues are dropping through the floor.  There will probably also be a response from the unions about what a disaster the whole plan is.


One Advisory Opinion almost done, so it’s time for another

Since consolidations on the scale the Postal Service is envisioning will inevitably result in slower delivery of First-Class mail and periodicals, with impacts on standard mail as well, the Postal Service is required by law to go to the PRC for an opinion about whether the changes comply with laws like Title 39 (e.g., section 3691) and the Postal Accountability and Enhancement Act (PAEA, e.g., Title III).  (The PRC’s role in setting “service standards” is discussed in this George Mason study on the “Universal Service Obligation,” pp. 240ff.)

This new request for an Advisory Opinion follows the March 2010 “Advisory Opinion Concerning the Process for Evaluating Closing Stations and Branches” (the SBOC initiative); the March 2011 “Advisory Opinion on Elimination of Saturday Delivery,” and the Advisory Opinion on the Retail Access Optimization Initiative to close 3,650 post offices, due out in a couple of weeks or so. 

It’s been clear for a while now that the Postal Service had already begun consolidating the processing network, so it was only a matter of time before it would go to the PRC for yet another Advisory Opinion.  It probably should have done so months ago, but it may have been waiting for the RAOI opinion to be completed.

The brief note in Postcom doesn’t say how the Postal Service will articulate its Request (and it's possible the "service changes" referenced in the Postcom note aren't directly related to the plant consolidations), but in September of this year, the Postal Service gave a pretty good indication of where things are headed.  In a press release and in a notice published in the Federal Register under the title “Proposal To Revise Service Standards for First-Class Mail, Periodicals, and Standard Mail,” the Postal Service explained what it wanted to do.

The Postal Service proposes cutting its network of processing facilities by more than half, from 500 to around 200.  It estimates that this would save up to $3 billion a year.  Some of that cost saving would come from not needing to pay rent, maintenance, and utilities for the 300 facilities it closes, but most of the savings would come from cuts to the workforce — the changes would eliminate “as many as 35,000 positions.”  In its notice in the Federal Register, the Postal Service concludes by saying that should it "decide to move forward with the Proposal . . . it would request an advisory opinion from the Postal Regulatory Commission," so it looks like that time has come.


Impacts on Service Standards: Slow and Slower

The consolidation plan will have a direct, observable impact on how fast the mail is delivered, and First-Class mail would be the most affected.  Currently, 40% of First-Class mail is delivered overnight — it gets where it’s going the next day.  About a fourth of First-Class mail is delivered in two days, the rest in three days.  According to the new service standards, no First-Class mail would be delivered next day.  Instead, half the mail would arrive in two days and the other half in three days.  In other words, instead of a 1-to-3 day window, the new standard would become 2-to-3 days.

Delivery of periodicals would also slow down: Instead of a 1-to-9 day window, the new standard would be 2-to-9 days.  That probably won’t please publishers, since those periodicals are time-sensitive.  But many may prefer slower delivery to an increase in rates — although they may get both.

The Postcom note mentions that the Advisory Opinion will encompass “the abandonment of the targeted ‘in-home day of delivery’ practice within Standard Mail.”  That refers to the fact that the Postal Service currently offers bulk mailers an opportunity to designate the date they want their mail delivered to your house. 

The Postal Service wants to abandon this practice, and it now looks like it won’t be waiting for the Advisory Opinion to implement the change.  In a letter dated Nov. 29, the Postal Service advises mailers that “we will no longer be able to stage and deliver mail using In-Home-Date windows.”

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