The PRC wants your opinion on POStPlan, but does the Postal Service want the PRC's?

June 5, 2012

Yesterday the Postal Regulatory Commission put out a press release announcing that it has established the docket (N2012-2) for its Advisory Opinion on POStPlan, the Postal Service’s plan to cut hours at 13,000 post offices.

The Chairman of the PRC, Ruth Goldway, encourages postal customers “to become familiar with the new proposal and to let the Commission know of their interests and needs.”  POStPlan isn’t going to be challenged by the postmasters associations, NAPUS and the League of Postmasters, so it’s especially important for the public to make its views known to the Commission.

You can send your comments to the Postal Regulatory Commission, 901 New York Avenue NW, Suite 200, Washington, DC, 20268-0001.  Mention the docket number, N2012-2.   You can also submit comments online using the customer service form, here.  If you want to suggest questions that might be put to the Postal Service about the plan, you could probably also contact the Public Representative assigned to the case, Emmett Rand Costich, at costicher@prc.gov.

The process will be chaired not by Chairman Goldway, but by Vice Chairman Nanci Langley.  No explanation on that, but perhaps Chairman Goldway has her hands full with the Advisory Opinion on Network Rationalization, which will be running concurrently, as well as the many other open dockets.  Judging by the many dissenting opinions Langley wrote for appeals cases in which she challenged the Postal Service's decision to close the post office, it looks like the chair responsibilities are in good hands with Commissioner Langley.

 

The procedural schedule, short but sweet

The PRC has also published its procedural schedule for the Advisory Opinion on POStPlan.  Compared to the schedule for previous Advisory Opinions, this one is brief, and one wonders why.

The Postal Service’s Request for an Advisory Opinion was submitted on May 25, and the schedule will be completed by July 27, unless there’s rebuttal testimony.  That’s nine weeks.  The Opinion itself will probably be issued in August.

For the Network Rationalization case on the plant consolidations, the Request was filed on Dec. 5, 2011, and the schedule runs until July 20 for reply briefs — a total of 33 weeks.

For the Opinion on the Retail Access Optimization Initiative (RAOI), the plan to close 3,700 post offices, the Request was filed on July 27, 2011, and the schedule ran until November 10 — a total of 15 weeks.

The official explanation for the short schedule on POStPlan, as conveyed through PRC spokesperson Ann Fisher, is that the POStPlan Advisory Opinion builds upon the PRC’s previous work on the retail network.  It has already studied the 2009 Stations and Branches Optimization and Consolidation (SBOC) initiative as well as the 2011 RAOI.  The procedural schedule was also informed by a preliminary review of the Request for an Advisory Opinion, which was relatively brief and not accompanied by much else — just a few library references and the testimony of one witness, Jeffrey C. Day, who's apparently in charge of the plan.

In other words, the short schedule is due partly to the fact that this is the PRC's third Opinion on the retail network, so a lot of the groundwork has already been done.  In some respects, one could even view POStPlan as the Postal Service’s response to the Commission’s Opinion on the RAOI.  Not that the Postal Service necessarily sees it that way — it doesn't even mention the RAOI in its Request for an Advisory Opinion or in witness Day's testimony.

It’s worth noting, by the way, that the Postal Service never issued a formal reply to the PRC about its Opinion on the RAOI, which it did do on the Five-Day Delivery case.  It never challenged any of the Commission’s findings, never publicly acknowledged the Opinion at all.  

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. 

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