How the West was won: The PMG's trip to Montana

May 22, 2012

In April of this year, as the moratorium on post office closings was coming to an end and thousands of communities were anxiously awaiting the verdict on their post office, the Postmaster General took some time out of his busy schedule to fly to Montana, just to talk with a few regular folks about the closings. 

The motive for the trip seemed mysterious at the time.  According to Newsweek, Donahoe went to Montana “to take his case for rural post office closures straight to the people it will hurt most, telling Montanans that up to 3,600 small post offices around the country need to be shuttered as part of cost-cutting moves.” That sounded more like a press release than an explanation. 

News reports said the trip was “spurred” by Montana senator Max Baucus, who wanted Mr. Donahoe to visit his state and answer questions from residents personally.  But did the Senator actually believe that a face-to-face meeting might turn the Postmaster General around and make him decide not to close those post offices after all?  That seemed unlikely. 

The Postal Service had put too much effort into its plan to close post offices for that to happen.  It had worked through complex legal hurdles to change the discontinuance procedures, conducted over three thousand community meetings, participated in a lengthy Advisory Opinion process with the Postal Regulatory Commission, and produced numerous reports, press releases, and PowerPoint presentations explaining why the closures were necessary.  A trip to Montana was not going to change the Postmaster General’s mind.

The visit had all the makings of a bad PR event.  One could imagine the Postmaster General up on stage and everyone in the audience complaining, pleading, and maybe getting a little raucous too.  Wasn’t the Postal Service worried that TV cameras would capture the Postmaster General getting booed by an angry crowd of rural Americans?

Last week, we learned why the Postmaster General went to Montana.  It wasn’t to make his case for closing post offices — he’d already decided not to.

 

Go west, young PMG

The Postmaster General arrived in Helena, Montana, on April 12, for what the media described as a “listening session.”  Apparently the PMG didn’t leave the airport.  The Postal Service decided it would be more convenient to hold the meeting at the second floor conference room at the Helena Regional Airport.  It must not have been very well publicized.  Only a few dozen people were in attendance.  But those who came were sure unhappy, and they gave the PMG an earful about why it would be better to close urban post offices rather than rural offices and how the post office should be a government service and "not a counter in a doughnut shop."  (Video here.)

"We are in a heck of a financial situation,” the PMG explained to the audience. “That is why it is so important we move ahead with some of the changes we need to make.  You have to do something. You can't sit back and wait."  

From Helena, it was on to the tiny town of Ingomar (pop. 95).  First stop?  Why the post office, of course.  The PMG and Senator Baucus couldn't leave Ingomar without spending some time admiring post office boxes.

The PMG and the Senator eventually pulled themselves away from the post office and headed over to the Jersey Lilly Saloon & Eatery, where the PMG rang a bell at the bar and bought everyone a round of drinks. 

The Jersey Lilly sounds like a fantastic place, by the way.  Famous for its Denver omelets and bean soup, it has an authentic Wild West interior, and the only bathrooms are outhouses.  (No word on whether the PMG checked out the facilities.)

After happy hour, it was time for the PMG to go to the Ingomar Tri-Rec Gymnasium for another “listening session.”   At the gym, the Postmaster General was greeted with a picnic table piled high with homemade baked goods.  According to one news report, the PMG was treated like a "visiting dignitary."

Network Consolidation: New plan, same old story

May 20, 2012

On Monday the Postal Service will make the changes in service standards official by publishing the Final Rule in the Federal Register.  As we’ve been told since September, delivery of First-Class mail and periodicals will be slowing down — but not as soon as initially planned.  [UPDATE: The Final Rule was not published until later in the week.  An Advance Copy is here.]

Rather than implementing the changes all at once, the Postal Service will give customers an opportunity to prepare and adapt by implementing an “interim version” of the plan for the next eighteen months.  Here’s a quick look at the two phases of the plan:

Phase 1: Interim version
Phase 2: Final version
Implementation in July/Aug. 2012; resumes Jan. 2013
Implementation in Feb. 2014
Consolidates 140 facilities
Consolidates 89 additional facilities
Saves $1.2 billion
Saves nearly $1 billion more
Reduces workforce by 13,000
Reduces workforce by additional 15,000
Preserves overnight delivery for “turnaround” mail (80% of First-Class)
Discontinues overnight delivery for all First-Class mail, except for some business mail

This modification of the plan is apparently a response to concerns expressed by mailers and some members of Congress, and it may also anticipate what the Postal Regulatory Commission will have to say in its Advisory Opinion.  In fact, one of the experts brought in by the Commission provided testimony that described how the Postal Service could realize significant savings by consolidating a large number of plants — though not as many as proposed — while still maintaining overnight delivery for a large portion of the mail.  That’s basically what the Postal Service’s new “interim" phase 1 will do.

 

The evolution of the plan

When it first announced its plan and published an Advance Notice in the Federal Register last September, the Postal Service explained that while 40% of First-Class mail is currently delivered overnight, under the new system, virtually all of that mail would go to two-day delivery.  In addition, about half the mail being delivered in two days would shift to three days.  The Postal Service said that relaxing the service standards in this way would allow it to reduce its processing network from 500 locations to fewer than 200, and thereby save a considerable amount of money.

After receiving comments on the Advance Notice, the Postal Service made some revisions in the plan, and in December it published a Proposal in the Federal Register.  The Proposal stated that the plan would “drastically” reduce the amount of First-Class Mail that qualifies for an overnight service standard.  The only mail that would be accorded overnight delivery was “intra-SCF Presort First-Class Mail that is entered at the SCF prior to the CET.” 

That refers to mail that is brought to a Sectional Center Facility (SCF) by a pre-sort company and that’s to be delivered within the area served by that facility. Sometimes referred to as “turnaround mail,” this is mail that originates from and destinates to the 3-digit ZIPs served by the plant.  It’s essentially local mail that doesn’t need to be transported to another facility before it heads out to your local post office.  In addition, to qualify for overnight delivery, the mail would need to arrive at the facility by a particular time, 8 a.m. — further limiting the opportunities for qualifying for overnight delivery.

Obviously, most retail customers would not be able to meet these criteria, so any of their mail previously delivered overnight would be delivered in two days.  That’s why the plan is sure to drive away business.  How much, though, is an open question.

Final Rule to Revise USPS Service Standards

May 19, 2012

[from a USPS Industry Alert]

Today the Postal Service sent the final rule to revise service standards for market-dominant mail products to the Federal Register.  The final rule will be posted on our “Information for Mailers” webpage at http://about.usps.com/news/facility-studies/welcome.htm by COB Monday, May 21. Highlights excerpted from the final rule are provided below.

Highlights

The Postal Service is adopting new rules for market-dominant service standards, with an interim version that will apply from July 1, 2012, through January 31, 2014, and a final version that will apply on February 1, 2014, and thereafter.  Should subsequent events or changed circumstances so warrant, the Postal Service will be able to revisit the final version before February 1, 2014.

First-Class Mail

Under the interim version of the overnight business rule for First-Class Mail, the overnight service standard will be applied only to intra-Sectional Center Facility (SCF) mail.  It will no longer apply to any inter-SCF mail. Under the final version of the overnight business rule for First-Class Mail, the overnight service standard will not apply to mail that is entered anywhere other than the designated SCF, nor will it apply to mail that does not meet all of the preparation requirements for Presort mail.  On February 1, 2014, when the final version of the rule takes effect, the Critical Entry Time (CET) at the SCF will become 8 a.m., with a 12 p.m. exception that will be available only to intra-SCF Presort First-Class Mail that is sorted and containerized to the 5-digit ZIP Code or 5-digit scheme level.

Revised Network Rationalization: Map & user-friendly list

May 18, 2012

Yesterday the Postal Service released a revision of its Network Rationalization plan to consolidate over two hundred mail processing facilities. 

When the plan was originally announced on December 5, there were 252 facilities on the list.   After the AMP (Area Mail Processing) studies were completed, a new list was released on Feb. 27, with 223 facilities approved for consolidation.

The Postal Service has decided to implement the plan in two phases.  The first phase consists of two stages.  The first stage of phase 1 will take place this summer, when some 48 facilities will be consolidated.  The Postal Service will then suspend consolidations during the busy mail period of the elections and holidays, and then resume again in January.  The second stage of phase 1 will include about 92 additional facilities, and it will begin in January. 

Phase 2 of the plan will be implemented in 2014, with 89 or more consolidations taking place, and bring the total number of consolidation to 229 (the Feb. 27 list had 223 facilities approved for consolidation, plus six studies still ongoing).  When the Postal Service released the lists this week, they were in a format that’s not very user friendly, so we’ve re-done the list in more manageable form.  There's a map too.  Here’s a list of the lists:

USPS list of AMP studies (2/27/2012)

USPS list of facilities to be consolidated summer 2012 (Phase 1, stage 1)

USPS list of entire Phase 1

STPO list of entire plan

STPO map of entire plan

Google Fusion Table (best for sorting, charting, mapping, downloading, etc.)

If you spot an error in the STPO version of the lists, please hit the contact link at the top and let us know.

And here's a list of just some of the news articles that have come out over the past 24 hours about the new plan.

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