November 12, 2014
It's business as usual at the Washington Post. Just as it has done many times over the past few years, the Post's editorial staff is calling for more cuts to postal services and more downsizing of the infrastructure, all in the name of "reform."
Today's Post has an editorial entitled "Delivering a solvent Postal Service, the bipartisan way." The Post endorses the Carper-Coburn bill and its mandate to close facilities and cut services, and then blames “interest-group politics” for opposing these much-needed reforms. According to the Post, it's postal unions, rural states, and large-scale commercial mailers who are “furiously” trying to protect “the dysfunctional status quo.”
Not surprisingly, the Post expresses support for the Postal Service’s plan to close 82 more mail processing plants over the coming months. To make its case, the Post describes these plants as “inefficient mail-processing facilities.” But the Post provides no evidence for why these plants are “inefficient.”
There’s actually a considerable amount of evidence showing that it would be more efficient for the Postal Service to maintain these plants rather than close them.
When the Postal Regulatory Commission did an Advisory Opinion in 2012 analyzing the Postal Service’s Network Rationalization plan to close about 260 plants, the Commission concluded that it would be more efficient if only some of the plants were closed. After an exhaustive analysis conducted by the PRC staff and outside experts, the Commission found that closing some plants would be beneficial. Closing all of the plants on the list, however, would be counter-productive because it would necessitate ending overnight delivery for almost all First-Class mail, which in turn could cause a considerable amount of damage in terms of lost revenue.
How deep the losses would be was hard to say, however, because the market research done on the question was so problematic. The Postal Service commissioned a market research survey that showed that mail volumes would decline precipitously if the mail were slowed down as proposed. The losses would be so significant, in fact, that the closures could end up losing money in the end. The Postal Service buried the survey and commissioned a second survey, which produced more palatable results.
In reviewing the two surveys, the PRC could not come up with a reasonable estimate for how much the plan would save. If everything went perfectly, the consolidations could save over $2 billion a year, as the Postal Service was claiming, but the plan could also end up breaking even or even losing a half billion dollars a year. In the worst-case scenario, it might even end up losing almost $1.5 billion a year. (For more on the numbers, see this previous post.)
In the end, the PRC recommended that the Postal Service proceed with phase one of the closures (which the Postal Service had already begun to do before the Advisory Opinion was issued), but hold off on phase two. The Postal Service is ignoring the advice, and it's going to begin closing the plants early next year. Postal workers across the country will be protesting the closures on Thursday of this week.
Nov. 10, 2014
In a previous post, "It takes a Village Post Office, but for what?" we questioned the financial rationale for VPOs and asked why many of them were now being placed in densely populated areas. Now there’s more reason to pose such questions.
A couple of days ago, an article in The Press Democrat touted the "debut" of some new Village Post Offices in Sonoma County, north of San Francisco. A couple of them are right in the heart of Santa Rosa, where there are seven or eight post offices, all of them operating at regular hours, some with Saturday hours as well. This map of Santa Rosa shows VPOs in red and the nearby post offices in blue.
The Postal Service has been putting VPOs in other urban areas, and California seems to be a popular location. Nearly a third of the 74 VPOs created in August and September 2014 were in California. In San Diego, where there about 25 or 30 post offices, the Postal Service has set up a half dozen VPOs. In Sacramento, there are now five VPOs, surrounded by 16 real post offices, as you can see on this map.
November 2, 2014
Almost every day over the past year, there’s been a ribbon-cutting ceremony to celebrate the opening of a new Village Post Office. There are hundreds of stories in local newspapers about these grand openings. The Postal Service clearly thinks that Village Post Offices play an important role in its vision of the future. But it’s not exactly clear what function they really serve.
Just this past week, the Postal Service opened a Village Post Office in the Creekside Market and Grill in Miracle, Kentucky; the Summit Mart convenience store in Mount Summit, Indiana; Ferrante Upholstering in New Beaver, Pennsylvania; and Knoll Brothers Retail (also a convenience store) in Kingsford Heights, Indiana.
At this point, there are over 760 VPOs in operation. Nearly all of them just sell stamps and give out flat-rate boxes. Despite the name, they're not really “post offices." The Postal Service chose to call them that because they were originally intended to replace real post offices. The Postal Service wanted small town communities to feel that while they might be losing their post office, they would be getting a good-old-fashioned “Village Post Office” instead. There would still be a warm place in town to meet and greet the neighbors.
Now the Postal Service says that VPOs are not intended to replace post offices. Rather, they provide some added convenience to customers who can’t get to the post office when it’s open — a common problem now that POStPlan has reduced hours at nearly 13,000 post offices.
But one can’t help but wonder if the Postal Service doesn’t have some other motive besides “customer convenience.” After all, if customer convenience were really a priority, why reduce post office hours for 13,000 communities? And what about customer convenience in the more than 12,000 communities that aren’t getting a VPO to supplement the reduced hours at the post office?
The VPO program is actually about something other than customer convenience. It’s part of the Postal Service's effort to redirect retail traffic from brick-and-mortar post offices to "alternate channels." These include USPS.com, stamps-on-consignment (at over 50,000 pharmacies, banks, and retailers), and pack-and-ship stores in the Approved Shippers program — like the 1,500 Staples stores where the Postal Service will soon be found and the 2,000 Walmarts that will soon have a Goin Postal shipping store that sells USPS products.
By bringing in more business through alternate channels and less business at post offices, the Postal Service can cut window hours and save some money. That translates into fewer union-wage jobs for postal clerks. Plus, with customers getting more accustomed to doing postal business at private retailers, it will also be easier for the Postal Service to close post offices when the time is right. Ultimately, directing customers to Staples, Walmart, or a VPO represents another a step in the privatization of the retail network.
That this is the Postal Service’s goal becomes clearer when you look at the economics of VPOs, where they’re being located, and how the rationale for them has evolved.
October 29, 2014
The Postal Service announced back in July that it was ending its pilot program to put mini-post offices in Staples stores. The 82 postal counters it had set up last October would be transitioned to the Approved Shipper program, which has been around for years without causing much controversy. (The Postal Service explained the transition in this blog post.)
At the time, it seemed like the Postal Service was looking for a graceful way out of the pilot because of all the protests it had caused. But now the Postal Service is expanding its presence into all 1,500 Staples.
Earlier this month, the Postal Service sent a letter to the APWU informing the union that it would be moving into every Staples store in the country as part of the Approved Shipper program.
The Postal Service included a list of the Staples stores, along with the launch date for each location. You can find an easier-to-use list of Staples stores here, and a map, here. For more about the history of the Staples deal, see these previous posts. We've also made a list and map of nearly 1,400 Staples showing the post office in the same zip code and the distance between them.
Staples already offers UPS shipping services, so also selling some USPS products would be typical of an Approved Shipper. These Approved Shippers are businesses like Goin Postal and Shipping Depot that offer products and services from the Postal Service, FedEx, UPS, DHL, and whomever else they want to partner with. They usually make their money by putting a surcharge on the regular price charged by the delivery service. (They usually don't give customers big discounts on USPS products, like Staples was doing last summer as part of the pilot — discounts made possible by a secret Negotiated Service Agreement.) The Approved Shipper stores make a point out of giving the customer a choice, and they don’t typically identify themselves primarily as USPS providers.
The USPS presence in 1,500 Staples may turn out to be something different, however. The photo above shows a new sign in the Kips Bay Staples Store at 574 Second Avenue in New York City. This location wasn’t part of the pilot of 82 Staples, so it’s an example of the new expansion. As you can see, the sign doesn’t give the impression that the Postal Service is just part of an Approved Shipper counter.
You get the same impression when you go to Staples’ Store Locator website. The locator allows you to select from six store features you may be looking for — mobile phones, computer workstation, buy online with pickup in stores, etc. One of the six features is “U.S. Postal Service.”
When the Postal Service said in July that it was not going ahead with the Staples pilot, the APWU called the announcement a “ruse.” "This attempt at trickery shows that the 'Don't Buy Staples' movement is having an effect,” said APWU President Mark Dimondstein. “We intend to keep up the pressure until Staples gets out of the mail business.”
It looks like Mr. Dimondstein was right. The Postal Service may have retreated from the pilot to put mini-post offices in 82 Staples, but it is going right ahead with expanding into 1,500 Staples, just under a different program. Within a few weeks, a sign like the one in the Second Avenue Staples store will be showing up in Staples across the country.
The Postal Service is moving full speed ahead to put postal counters in big box stores. You can add these 1,500 Staples to the 2,000 Walmarts that are getting a Goin Postal store, also under the Approved Shipper program. That’s 3,500 new places to do business with the Postal Service. It also represents a dramatic increase in the number of Approved Shippers. There are currently about 6,000; there will soon be nearly 10,000.
The USPS Office of Inspector General is currently doing an audit investigation to determine whether the Postal Service maintains adequate oversight of the Approved Shippers Program. That oversight is about to get a lot more complicated.
Postal management says that expanding into big box stores is all about “customer convenience,” but the real goal is clear enough: Build up the network of alternate retail access channels so it’s easier to close post offices, and replace union jobs in post offices with low-paid workers in big box chains. Along with closing processing plants, shifting to cluster boxes, making private deals with companies like Amazon, and selling off postal properties, it’s just another phase in the privatization of the Postal Service.
(Photo credit: Kevin Walsh, Dir. Org. NYMAPU)