POStPlan: Estimating post office revenues

June 4, 2012

The Postal Service does not give out much information about the revenues post offices bring in, but it has provided enough data to enable one to make estimates.  So we've done a little figuring and made a table with estimated revenues for FY 2011 for all 17,700 post offices on the POStPlan list.   

You can view a spreadsheet here (good for an overview) or a Fusion table here (good for a map view, charts, and other analytic tools).  You can go straight to a map here.  The easiest way to find the revenue estimate for a particular post office is probably to use the Fusion table: Click on Options > Filter, and select Office Name or Zip > Starts with, and type in the name of the office (in ALL CAPS) or the zip code (3 digit, 5, or whatever). 

Keep in mind that these revenue numbers are strictly estimates, based on a methodology described below.  They're mostly useful for getting the big picture; the number for any given post office could be significantly off.

The Postal Service prefers not to provide revenue data for its post offices.  About the only time one learns anything about how much revenue a particular post office takes in is when the Postal Service decides to close it.  A Final Determination always contains a cost-savings analysis that includes a few details about the revenues, including the total revenues for the past three years — usually cited to show they're declining.  (The Postal Service never mentions that the recession may have had something to do with the decline.)

Last year, when the Postal Regulatory Commission (PRC) was doing its Advisory Opinion on the Retail Access Optimization Initiative (RAOI) — the plan to close 3,700 post offices — the Commission requested a spreadsheet showing walk-in revenue data for all USPS retail facilities.  The Postal Service submitted the material as a “non-public” library reference, meaning that only selected participants in the Advisory Opinion process could see it.

The Postal Service explained that it regards revenue figures to be "commercially-sensitive and proprietary information that should not be released into the public domain.”  In its request for non-public status, the Postal Service told the PRC that it would not be “good business practice” to release this information, and making it public could cause the Postal Service to suffer "commercial harm.”  

A couple of weeks ago, as part of its PRC testimony on POStPlan, the Postal Service submitted a large spreadsheet entitled "Summary" that contains data about the operations of each post office on the POStPlan list.  It has calculations for retail workload, administrative workload, and so on, for all 17,700 post offices impacted by POStPlan.  (You can download the spreadsheet from the PRC website here.  An abridged version with just the financial data is on Google Docs, here.)

The Postal Service also provided a second spreadsheet for Average Annual Retail Revenue for POStPlan offices for FY2011.  This one just has a few numbers.  It’s grouped by EAS level, and it breaks out total walk-in revenue averages for each level by categories — stamp sales, meter revenue, p.o. box fees, etc.

By combining the information in the two spreadsheets, one can come up with a rough estimate for the revenues at each post office.  Here's how:

POStPlan: How to save $500 million without really trying

June 2, 2012

When the Postal Service gave the Postal Regulatory Commission its request for an Advisory Opinion on POStPlan — the plan to reduce hours at 13,000 post offices — it provided no cost-savings analysis.  In his testimony, USPS witness Jeffrey Day says only that "the Postal Service anticipates that the POStPlan will provide significant labor cost savings due to lower salary and benefit costs and a reduction in overall retail window hours."   

While putting a number on the savings can cause problems with the PRC, publicly the Postal Service has been more forthcoming, and there's a press release on the USPS website saying that the plan would save a half billion dollars annually.  The press release provides no details, but using all the data that's out there, one can imagine how the Postal Service might be figuring things. 

The following table provides estimates about how much the POStPlan post offices cost to operate (for labor) before and after implementation.  The numbers on impacted post offices and postmaster salaries come from a POStPlan presentation available on the League of Postmasters’ website; some of them also appear in Day's testimony.  The rest of the table represents calculations based on those numbers.  Additional assumptions are described below.  The calculations do not include Saturday, since the Postal Service has said nothing about changing Saturday hours as part of POStPlan.

The total cost of labor for the 17,725 post offices impacted by POStPlan is currently about $1.1 billion.  That figure is derived by estimating what the total cost of labor would be if a postmaster staffed every office — $1.33 billion — and then subtracting $200 million to correct for the fact that about 4,000 post offices are currently staffed not by a postmaster but by a Postmaster Relief (PMR), who earns about a third as much.  

POStPlan: New lists, maps, financials, and more

June 1, 2012

Last week the Postal Service submitted to the Postal Regulatory Commission its Request for an Advisory Opinion on POStPlan — the plan to reduce the hours at 13,000 small post offices.  These downgraded offices will be called Remotely Managed Post Offices (RMPOs), meaning that the full-time postmaster responsible for administering the office will be located at another post office.

Along with the Request, the Postal Service submitted a Library Reference that contains a spreadsheet with the financial data used to calculate each office's proposed status.  The spreadsheet also has other information, like whether the post office was previously studied for discontinuance.  It includes all the post offices set for reduced hours, as well as 4,600 post offices that will be upgraded to Level 18 as part of POStPlan.

POStPlan Lists & Maps

POStPlan offices with all facilities

POStPlan offices only

POStPlan offices under suspension

POStPlan offices removed from RAOI

Summary Spreadsheet

Average Post Office Walk-In Revenue

Earned Hours Data – SOV/CVS

Hours reduced, per state

Impacted offices, per state

You can download the spreadsheet from the PRC website here.  The whole thing is too big for Google Docs, but we've put up an abridged version showing just the financial data, here.   

When the POStPlan list was released earlier this month, we created a Google Fusion Table, which makes it possible to map the post offices and analyze the data in various ways.  

Now that the Postal Service has released a list that includes both the upgraded and the downgraded offices, we've created a new Fusion table that includes the entire POStPlan list.  

While we were at it, we also included every USPS facility (post offices, processing plants, parking lots, etc.).  That information comes from the USPS website, which has facility reports for each state.  The original facility reports are here (leased) and here (owned).  Note that the reports have not been updated recently, but they remain the best publicly available source.

The new Fusion Table is here.  For a map view, click on the “Visualize” tab. 

The Postal Service submits a Request for an Advisory Opinion on POStPlan: How changing the rules changed everything

May 25, 2012

Today the Postal Service asked the Postal Regulatory Commission for an Advisory Opinion on POStPlan, the initiative to review about 13,000 post offices for discontinuance or reduced hours.  The Request is here

Along with the Request is testimony from Jeffrey C. Day, Manager, Retail Operations, in the Office of Delivery and Post Office Operations at the Postal Service.   Day’s testimony is here.

The Postal Service has also submitted several Library References:  Average Post Office Walk-In RevenueEarned Hours Data – SOV/CVSSummary Spreadsheet; the new PO-101 Handbook; and Market Research Materials.

The PRC docket — N2012-2 — has a lot of material about the plan, but aside from the data in the Library References, much of it has already been made public by the Postal Service and the postmasters’ associations, NAPUS and the League of Postmasters.  Here's a summary of what's in the Request and testimony, plus a long story about how the Postal Service laid the groundwork for POStPlan — starting back in March 2011.

 

POStPlan Basics

The basic outline of the plan is as follows:

Approximately 17,728 post offices — more than half the country’s 32,000 post offices — will be reviewed under the plan. 

Approximately 4,561 will be upgraded (to EAS Level 18 or above).  About 3,907 of these will be designated as an Administrative Post Office (APO).

The remaining 13,167 post offices will either proceed to a full discontinuance study or have their hours cut.  That decision will be based largely on customer input, so the Postal Service expects that in most cases, the community will prefer to see the hours reduced rather than having the post office close completely.

POStPlan Resources

 
Library References
 
 
STPO articles about the plan:
 
 
 
 

The plan will convert these 13,000 independent post offices into a subordinate class of post office called a RMPO — a Remotely Managed Post Office.  A cluster of RMPOs will then be placed under the administrative oversight of one of the APOs. 

If a post office is 25 or more driving miles from the nearest post office, it may be designated as a Part Time Post Office (PTPO).  It would be staffed for six hours (not two or four), and it would report to a district office, not an APO.

The hours of operation at the RMPOs will be aligned with how much revenue the post office brings in and its proximity to another office.  Most offices will have the hours reduced to four, but for some it will be two and others, six.  Once the hours are set, they can be adjusted up or down, depending on how the annual financial review of the office goes.

The RMPO will be run not by a full-time postmaster but by part-time workers, managed by a postmaster at an APO in another town.

Implementation of the plan will begin in June.  The Postal Service will begin by upgrading the 4,500 post offices to APOs and level 18s. 

During the summer, the Postal Service will work with the PRC as it conducts the process for its Advisory Opinion.  The Postal Service is obliged not to implement the plan for 90 days, but after that, it can go forward, even if the Advisory Opinion has not been completed.

Therefore, the Postal Service plans in September to begin notifying communities on the POStPlan list, sending out surveys, and scheduling community meetings.  In October, the Postal Service will begin classifying post offices as RMPOs and PTPOs.  It will begin with post offices that have a postmaster vacancy.

It's not clear how long the entire implementation process will take, but postmasters can remain in their current positions for the next two years, so it will take at least that long.  Presumably the annual reviews and realignment of hours with revenues would go on for years and years.

 

Rural post offices granted a reprieve — kind of

POStPlan has been welcomed as a “reprieve” for rural post offices, but it’s just that.  The death sentence hasn’t been commuted — it's just been postponed.

Yes, there were some 3,600 post offices on the Retail Access Optimization Initiative that were anxiously awaiting the verdict, and another 200 or more had already been issued a Final Determination notice.  Those offices — and many more down the road — might have been closed if the Postal Service hadn’t come up with POStPlan.  It's possible that postal reform legislation would have prevented all those closings.  Now lawmakers are off the hook.

But POStPlan is not going to stop post offices from closing.  Staffing 13,000 post offices with part-time workers earning $12 an hour will prove an impossible task.  The Postal Service will have many opportunities for declaring an “emergency suspension” because there’s no one available to work in the office.

The plan also says that every year, the post office’s revenues will be reviewed, and the hours of the post office will be adjusted accordingly.  Revenues are sure to decline with the office only open part of the day and no full-time postmaster around, so expect the hours to be cut further down the road.  

When the hours have been reduced to two (nearly 2,000 will be cut to two hours from the get-go) and people have adjusted to the alternatives, it will be a short step to closing the post office completely.  The Request for an Advisory Opinion makes it clear that post offices will continue to be discontinued using the new “improved” discontinuance process implemented last year.

On Privatization

Good Reading on Postal Privatization

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

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