It takes a Village Post Office, but for what?

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, 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.

Postal Service begins expanding into 1500 Staples

October 29, 2014

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

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

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

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

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

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

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

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

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

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

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

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

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

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

October 24, 2014

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

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

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

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

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

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

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

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

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

October 20, 2014

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

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

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

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

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

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

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

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

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

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

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

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

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

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

On Privatization

Good Reading on Postal Privatization

Also: Sarah Ryan's "Understanding Postal Privatization: Corporations, Unions, and the "Public Interest"

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