HuffPost talks Post Office

October 6, 2012

Huffington Post's new streaming television station did a spot on the Postal Service yesterday, and one of the guests was Mark Jamison, former USPS postmaster and a regular contributor to Save the Post Office:

POST Plan meetings: Over 1500 scheduled already, more coming

October 2, 2012

In order to implement POST Plan — the plan to reduce hours at 13,000 post offices — the Postal Service will be holding a public meeting at each impacted post office.  

The Postal Service has already scheduled 1,518 public meetings for the two-week period October 8 through October 19.  Around 600 are scheduled for the week of October 8, and over 900 for the week of October 15.  A list of the meeting times and places is here; a spreadsheet version is here, a map here.  The list comes from the USPS website, here.  

Some 862 of the meetings are scheduled for the post office lobby.  Most of the POST Plan post offices are small, rural offices, so it's hard to imagine that most of these locations have much room for a meeting, but perhaps the Postal Service doesn't think many people will attend.

Half of the meetings have been scheduled for 4:00 p.m. or later.  The other half are scattered throughout the earlier part of the day, which will make it difficult or impossible for some people to attend.  They will have to content themselves with having their voices heard through the survey.

The Postal Service has said that it would begin the implementation process for POST Plan with those post offices that currently have a postmaster vacancy.  About 3,000 offices had a vacancy when the POST Plan list was first published back in May.  Since then, some 4,000 postmasters have taken the retirement incentive, so perhaps another 2,000 vacancies are opening up.  Many postmasters are transferring to other positions, so even more positions will become vacant soon.

In the meantime, there are probably around 5,000 postmaster vacancies right now.  At a rate of 900 meetings per week, it will take about six weeks to do meetings for all those post offices.  By then, over two thousand more vacancies should open up as POST Plan postmasters transfer to positions where postmasters have retired, and it will take another three weeks to do meetings at all of them.

It would appear, then, that the Postal Service plans to hold meetings for over 7,000 post offices — more than half the POST Plan list — between October 8 and mid-December — that is, unless the Postal Service decides to slow down on the meetings during the election and Christmas mailing season.  That may very well be the case.  The USPS website indicates that there will be meetings for four weeks, October 6 to November 2, but it says nothing beyond that.

The PRC's Advisory Opinion on Network Rationalization: Death Knell for the Postal Service?

October 1, 2012

When the Postal Regulatory Commission issued its advisory opinion on the Retail Access Optimization Initiative (RAOI) last year, it said the plan to close 3,700 post offices wouldn’t optimize anything.  On Friday of last week, the PRC issued its advisory opinion on Mail Processing Network Rationalization (MPNR), and while it doesn’t come right out and say so, the Commission suggests that the Rationalization plan won’t really rationalize the network. 

The mountain of testimony and legal arguments submitted by the Postal Service just rationalize a decision made long ago, and postal management doesn't seem to care if the PRC thinks the decision was rational or not.  The Postal Service didn't even wait for the opinion to come out.  The changes in service standards were implemented in July, the consolidations began in August, and while the plan now calls for a phased implementation, there are few signs that the Postal Service is interested in changing course.

The advisory opinion nonetheless aims to shift the direction in which the Postal Service is headed.  The opinion is long (240 pages), thorough, and extremely technical, but as the Commission states in the Introduction, its advice can be “succinctly summarized” as follows: 

“The Commission views positively the network rationalization actions planned by the Postal Service through January 31, 2014, and recommends that the Postal Service take into account the considerations outlined in this Advisory Opinion before proceeding further.  Specifically, the Commission encourages the Postal Service to make every attempt to retain overnight delivery in keeping with the analysis presented in the subsequent chapters.”

That summary of the Commission’s findings contains several important points.  First, the Commission is basically approving the first phase of the Postal Service’s two-phase implementation plan, which was announced back in May.  According to this revised plan, some 140 plants will be consolidated as part of phase one, starting this past August and running through January 2014.  Phase two will begin after that, and include about a 90 more plants.  (A list of the plants is here.)

The Commission expresses approval for phase one because it preserves overnight delivery for most of the mail that currently enjoys it.  The Commission is much more skeptical about phase two because it requires ending overnight delivery for almost all First-Class mail, and it would cause most of the damage in terms of revenue losses.  The Commission advises the Postal Service to consider the opinion’s recommendations carefully and to review what happens in phase one before proceeding with the second phase — if it moves on to phase two at all.

A large part of the advisory opinion reviews the detailed cost-savings analysis provided by the Postal Service.  It concludes that “the Commission’s range of potential net savings estimates is lower than that projected by the Postal Service.”  The Postal Service says that the gross savings from the plan (before deducting lost revenue) will be $2.1 billion.  The Commission, on the other hand, says the gross savings could be as low at $54 million.

As for how much business the relaxed service standards may drive away, the Postal Service claims that its market research projects a net loss of $500 million (later corrected to about $430 million), bringing the total savings to $1.6 billion.  The Commission, however, found the market research to be so problematic that it could put no credence in the bottom-line estimates.  The Commission would not offer an estimate of its own, but the advisory opinion leaves one with the distinct impression that the lost revenue will be greater, perhaps much greater, than the Postal Service is anticipating. 

All in all, then, the Postal Service’s estimate of $1.6 billion in net savings comes under serious scrutiny in the advisory opinion. The Network Rationalization plan will probably save much less than the Postal Service says, and there is the very real possibility that rather than saving anything, it will actually lose money, drive the Postal Service deeper into its downward spiral, and, as one of the expert witnesses put it, "herald a death knell” for the country’s postal system.

 

The great unspoken

For the most part, the advisory opinion presents a technical analysis of the Postal Service’s plan and the alternative models that were developed by outside experts.  It was written by a staff well versed in the technicalities of postal operations, postal law, and the principles of statistics. 

The advisory opinion mentions the word “jobs” only once, in a sentence about how the Postal Service is “a vital component of a mailing industry that supports millions of American jobs.”  There’s not one reference in the advisory opinion to the jobs of postal workers, even though nearly all of the savings the plan purports to achieve will come by eliminating their jobs, and lots of them — 28,000, according to the USPS press release

The advisory opinion doesn’t discuss how closing 229 large processing plants will affect postal employees or their families and communities.  There’s no discussion of the economic impacts of shutting down a large plant, nothing about how some workers will have to commute two hours to their new jobs, nothing about how families will be split apart when the postal worker in the family gets transferred to a plant in another town, nothing at all about the 28,000 workers who won't even have a job to go to.

The advisory opinion doesn’t discuss the social costs of the Network Rationalization plan.  It examines the Postal Service’s plan in the same terms with which the plan was presented — as a matter of sorting machines and square footage, of maximizing efficiencies and improving productivity.  It’s all about numbers, not people.  If money can be saved by consolidating plants, the issue is how many and which ones, not the value of providing jobs, sustaining families, and maintaining communities. 

Perhaps eliminating 28,000 postal jobs is a necessary evil if we are to save the Postal Service — the lynchpin in a mailing industry that employs millions — but it seems odd to cut jobs in order to save them.  Yet that’s what network “rationalization” is all about.

The incredible shrinking Postal Service: More tales of suspensions, reductions, relocations, and sell-offs

September 24, 2012

While the United Parcel Service is busy looking for innovative ways to make its retail stores more profitable, the Postal Service can only think about more junk mail.  Rather than seeing value in its own network of brick-and-mortar post offices, the Postal Service is cutting the hours at 13,000 small offices, replacing historic downtown post offices with retail counters in annexes on the outskirts of town, and closing and suspending post offices on an ad hoc basis, thereby avoiding another advisory opinion with the Postal Regulatory Commission.

Mass closures may have been temporarily averted, but the Postal Service continues to shut down post offices.  Rather than closing them the old-fashioned way, with a formal discontinuance process, the Postal Service is deploying an alternative vocabulary of “relocations,” “consolidations,” and “suspensions.”  Whatever you call them, though, from the point of view of citizens and communities, the result is the same: the doors of the post office are closed. 

 

USPS cuts back, UPS expands

A couple of weeks ago, the Postal Service began implementing POStPlan.  It's been scheduling public meetings and sending out surveys to determine whether customers would prefer to have their post office closed or to have its hours reduced.  It may seem like a silly question, and one wonders why the Postal Service would spend so much time and money on surveys and community meetings when the outcome is obvious. 

Judging by the way people are responding to the survey, however, one explanation is emerging.  The way the survey is worded, many people are being led to believe that their post office is actually in imminent danger of closing. Presenting four options — three of which involve closing the post office — turns out to be a useful tactic to make people happy to learn in the end that the hours at their post office are simply being cut and the office will stay open.  After all, it could be worse. 

While the Postal Service is busy getting ready to cut over 10 million hours at these 13,000 post offices (about a third of the hours of operation), the United Parcel Service is looking at ways to expand their retail business.  Last week the New York Times ran two pieces, one about the Postal Service’s efforts to expand its junk mail business, the other about how UPS is expanding services at its UPS Stores

UPS offers not only packing and shipping but also printing services and many other products, like mailboxes.  Its latest initiative is the “Small Business Solutions” campaign, which customizes services to meet specific business needs.  The Postal Service is also innovating with small businesses, but its main new offering is "Every Door Direct Mail" — a way to saturate a neighborhood with ad mail.

 

Hours cut in South Carolina — last year

While UPS sees value in its retail business, the Postal Service thinks it will come out ahead by cutting back on service at its own, much larger network of retail outlets.  It claims POStPlan will save $500 million a year, but that probably overestimates the savings by over a $150 million (as this analysis shows), and it doesn’t include any lost revenue at all.

During the advisory opinion process, the Postal Service told the PRC that it couldn’t estimate how much revenue might be lost under POStPlan because it had never done anything like this before.  Turns out, however, that’s not entirely true.

Last year the Postal Service cut hours at hundreds of post offices from 8 ½ to 6.  The reductions took place primarily in South Carolina, where about the half state’s 410 post offices are now open for 6 hours a day, typically 9:00 to 1:00 and 2:00 to 4:00.  The change in hours wasn’t nationwide and thus didn’t require an advisory opinion, but the scale was large enough for the Postal Service to evaluate how much revenue was lost in the process.  But when it responded to numerous interrogatories posed during the advisory opinion process about revenue impacts, the Postal Service didn’t even mention the change in hours that took place in South Carolina.

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