September 2, 2015
Despite the efforts of several elected officials in Congress and the recommendations of both the USPS Office of Inspector General and the Advisory Council on Historic Preservation, the Postal Service continues to sell off its legacy of historic post offices.
This week the Postal Service announced plans to relocate retail services out of the historic Post Office and Federal Building in downtown Clarksburg, West Virginia. The next step will be to dispose of the building.
According to an article in The Exponent Telegram, the Postal Service has told city officials that it plans to lease a smaller space for a new downtown post office, at a location yet to be determined.
As for the historic building, a USPS spokesperson told the city, “We don’t know how we’re going to dispose of the building,” but one possibility would be to turn it over to the GSA, which manages the courthouse presence in the building.
The Clarksburg Post Office and Federal Building was built in 1932. It's one of the "pivotal structures" in the Clarksburg Historic District, which is on the National Register of Historic Places.
The NRHP nomination form describes the building this way:
A three story building that is an excellent represenative example of Neo-Classical style architecture in public buildings of this period, the U.S. Post Office was constructed in 1931-32, replacing the old Federal building (now the Municipal Building) as the post office. The triplefront entrance is decorated in the art-deco style, offering a splendid contrastto the more severe classical features of the upper floors (that includes a series of seven bronze spandrels with classical motifs on each elevation). The building is capped by a red tile roof.
The public will have 30 days to comment on the Postal Service’s relocation plans after a representative has given a presentation at a Sept. 17 meeting of the City Council.
(Photo credit: Clarksburg Post Office and Federal Building)
September 1, 2015
The Postal Service is taking the Postal Regulatory Commission to court over the exigent rate increase. On August 28th, the Postal Service filed a Petition for Review of PRC Order No. 2623, Resolving Issues On Remand, in Docket R2013-11R.
This will mark the third time the Postal Service has appealed a PRC ruling on the case, going back to 2010 when the Postal Service first requested an exigent increase.
After the Court of Appeals issued its ruling on the case in June of this year, the Postal Service and the mailers filed comments with the PRC about how to interpret the decision. The main issue was how to implement the court’s determination that the PRC had been wrong not to count one year’s losses in the following year — the so-called “count once” rule — when figuring out how much the Postal Service had lost due to the Recession and how much it could recoup with the exigent surcharge.
As discussed in this previous post, the commenters provided at least eight different scenarios for determining how much additional contribution the Postal Service should be allowed to collect. While all the scenarios corrected the “count once” flaw in their own way, they also introduced other factors, resulting in widely divergent estimates for lost contribution and revenue.
The estimates for additional contribution ranged from as little as $60 million (the estimate by PostCom and a group of mailers associations) to as much as $8.66 billion (the Postal Service’s largest estimate).
In the end, the PRC decided that one of the Postal Service’s scenarios — the first scenario, with an estimate of $1.2 billion in lost contribution — was the most reasonable. Its July 29th order on the rate increase therefore granted the Postal Service an additional $1.19 billion in contribution, which means the exigent surcharge of 4.3 percent will remain in effect until next April or so.
Now the Postal Service wants the surcharge to go on even longer, and it has asked the U.S. District Court of Appeals to hear an appeal on the PRC’s order.
August 31, 2015
The USPS Office of Inspector General has just released a report about the Premier Post Office program. According to the OIG, the Postal Service could be doing a better job measuring and evaluating the success of the program. A lot of the Premier post offices could also be improved in terms of their physical appearance.
The Premier Post Office program was created in 2011 to enhance the customer experience, improve cost efficiency, and maximize revenue at some of the Postal Service’s most successful (i.e., profitable) post offices.
When the program was created, the Postal Service selected 3,088 of its 32,000 post offices to participate, based primarily on revenue but also on geographic location so as to ensure that all areas of the country had access to one of the Premier offices. (Even with that many Premier offices, there are places in the country that are extremely far from a Premier office, as one can see on this map.)
The OIG says that while the Premier offices represented represent about 10 percent of all post offices, they generated 46 percent of total post office revenue, about $5.2 billion, in FY 2014.
The main conclusion of the OIG’s report is that “the Postal Service lacks a comprehensive methodology for evaluating program performance.” The Postal Service currently just uses a customer survey. The OIG recommends using other indicators, like revenue and cost efficiency.
The OIG also visited twenty-four of the Premier post offices and found that “the physical appearance of customer service areas at certain offices was lacking.” There were many “cosmetic deficiencies” like chipped countertops and broken glass, as well as empty retail displays and litter.
Some managers at these offices did not know that special funds were available to remedy these problems as part of the Premier program. The OIG therefore also recommended better communication.
The OIG report is about improving the Premier post offices. It doesn’t address some of the key questions that the program raises, like why the Premier offices get preferential treatment when it comes to new releases of stamps. (When the Harry Potter stamps came out, they were initially available only at Premier offices.) Or why some Premier offices are open for special hours, like Veterans’ Day or extended Saturday hours during the Christmas holidays, while thousands of other post offices see their hours reduced. Or why there's reason to be concerned about the physical appearance of some offices but not all of them.
While it may make good business sense to improve service at post offices that generate the most revenue, one wonders if it’s fair to small towns, rural America, and other places that don’t enjoy the advantages of a Premier office. Why aren't all post offices Premier offices? And wouldn't that make good business sense?
August 20, 2015
The Postal Service is working on phase two of POStPlan, its initiative to reduce hours and staffing at half the country's post offices. From September 2012 through February 2015, the Postal Service implemented phase one — 13,000 small post offices had their hours reduced from eight a day to six, four, or even just two, and thousands of career postmasters lost their positions.
Now the Postal Service is reviewing 5,000 more post offices for a downgrade and reduced hours. These are the offices that were upgraded to Level 18 in 2012. A list of the original 4,600 Level 18s, along with a map, is here.
There have been rumors lately that many Level 18 offices could be downgraded and their postmasters might find themselves out of a job. These rumors seem to be confirmed by an August 12th filing with the Postal Regulatory Commission.
In the filing, the Postal Service tells the PRC that it wants to change the accounting methodology used for small post offices when preparing cost and revenue reports. As the Postal Service observes, the changes caused by POStPlan and the ruling on the APWU arbitration last year have complicated the costing analysis, and the proposed changes would simplify things. In the course of presenting the rationale for these accounting changes, the Postal Service says this:
“Over 5,000 other post offices have been designated as Level 18 and are having their work hours reviewed to determine whether they should have their hours reduced as well, just like the 13,000 post offices in the original POStPlan.”
The Postal Service had previously indicated that it would eventually review Level 18 post offices, and many POStPlan postmasters were worried about transferring to a Level 18 for precisely this reason. It now appears that they may have been right to worry.
Valuing the post office
It's too bad that the Postal Service is contemplating further reductions in hours and more cuts to service. As two recent surveys have found, people really do value their post offices.
After doing an in-depth quantitative survey of customers, a recent OIG report concluded this:
Both consumers and businesses place value on human interaction with a Postal Service employee at a post office rather than alternative access options such as postal counters in non-postal retail stores and self-service kiosks.
The OIG used a "willingness to pay" (WTP) factor to measure just how much people valued the post office, and the survey found that customers were very willing to pay for a post office operating a full 8 hours a day as compared to a postal counter in a private retailer (like Staples) or shortened hours at the post office.
The 2014 Household Diary Study, which came earlier this week, surveyed customers and came to a similar conclusion:
In spite of a declining frequency of visits over the past several years, the use of post offices for mailing services continues to dominate the mail service industry…. Even with the continued availability of mail-related products and services through alternative modes (such as Internet orders), in-person visits to postal facilities remain strong.
The Household Diary Study showed that 53 percent of all U.S. households patronize a post office at least once a month, and over 24 percent visit the post office three or more times a month. That's far more than go to a private shipping company. And these numbers only represent people who conducted business at the service counter. It doesn't include the millions of people who go to the post office almost every day to pick up mail from their PO box or to drop something off at the blue box outside the post office.
Reviewing the Level 18s
The reviews of Level 18 post offices is taking place in addition to the annual review of all POStPlan offices, which can lead to an upgrade to more hours or a downgrade to fewer.
Judging by the USPS response to a FOIA request submitted by postal watchdog Steve Bahnsen, it doesn’t seem likely that there will be a lot of changes for the Level 2, 4, and 6 offices as a result of these reviews.
The FOIA request encompassed about 1,500 Level 2, 4, and 6 POStPlan offices in six midwestern districts. As of FY 2013, the Postal Service had upgraded 135 and downgraded only 14. At that rate, only 120 of the 13,000 original POStPlan offices would be downgraded.
The Level 18s could be another story.
Back in December 2013, the Postal Service said that Level 18 downgrades would not occur until September 2016. It’s not clear at this point if the APWU arbitration ruling has pushed things up to an earlier date or if the Postal Service is just getting ready for next year. But whenever the downgrades happen, it's possible that a lot of offices could be impacted.
The arbitration ruling requires the Postal Service to create a minimum of 3,000 new full-time career jobs for clerks in Level 6 and 18 offices. The Postal Service has already begun implementing the ruling, and there are now many Level 18 offices where there’s both a postmaster and a clerk, whereas before there was just a postmaster. In many cases, there may not be enough work to justify two full-time postal employees.
If a Level 18 office is downgraded, it’s not clear what will happen. In some cases, the postmaster’s position might be eliminated, and the clerk would staff the office alone, under the supervision of a postmaster at an Administrative Post Office (APO). That could be another Level 18, or it might be a Level 20. In other cases, perhaps a full-time clerk would be replaced by a part-timer.
No information has been made public about how many Level 18 offices might be downgraded and have their hours reduced or how many employees might be impacted. The Postal Service has not indicated how it is conducting the reviews, and it hasn’t shared any recent lists about which offices are being reviewed.
Back in 2012, however, the Postal Service did give the PRC a list of the offices being upgraded to Level 18. It had about 4,600 offices. (If over 5,000 Level 18 offices are currently under review, another 500 or so Level 18s must have been added since then.)
We’ve taken the 2012 list of Level 18s and combined it with several other USPS lists so it shows not only the names of the 4,600 post offices but also other data about these facilities: which of them are serving as APOs, which have been subject to Delivery Unit Optimization (DUO), whether the facility is owned or leased, when the lease ends, the CAG designation (Cost Ascertainment Group), as well as some of the workload numbers from 2011. As noted above, the list, along with a map, is here.
Here’s what one can learn from the data.