Wait a minute, Mr. Postman, please save our Post Office

Friday, March 16, 2012
See video

The Post Office in Ramsay, Michigan, is on the closing list, and some local musicians are singing to save the post office.  Their Youtube posting adds a few details:

"What makes us different is that we DO NOT HAVE HOME DELIVERY!  That's right, our Post Office is not a luxury, but a necessity!  The talk is if they close us, we will have to either go over two cities away to get our mail everyday, OR they will install 'Cluster Boxes' in several places in our city. This means they will have to deliver mail to those cluster boxes as well as the installation cost, which I can almost guarantee will cost more than having the Post Boxes in the Post Office that we already have. Yes, our town is small, but we are going to be significantly burdened, especially the elderly, with a closing of our Post Office. As Congress is reviewing the "death list" of hundreds of Post Offices across America, we are just asking them, to take us off the list. I'm thinking it will cost less to leave us alone than it would to shut us down! Bill, who is seen in this video, has lived here ALL his life. Bill is 93 years old. Bill speaks for ALL of us when he says, "Please keep our Ramsay, MI Post Office open!" Thank you, and feel free to share with anyone who may have some decision making power in this critical situation. If you'd like to help, please contact Senator Levin's office at: Tara_Andringa@levin.senate.gov. Thank You!!"
Song re-written and sung by Denise Haas aka Big D:) bigdblues.com

If at first you don’t succeed, try revising the survey

March 15, 2012

Last summer the Postal Service hired Opinion Research Corporation (ORC) to do market research on how customers might respond to changes in service standards (slowing down the mail), as well as plans to close thousands of post offices, eliminate Saturday delivery, and seek legislative reforms on pensions and the retiree health care fund.  The purpose of the research was to provide data on which to base estimates of potential losses in mail volumes and revenue.

In her testimony before the Postal Regulatory Commission (PRC) for the Network Rationalization plan to consolidate over 200 mail processing plants, ORC's Rebecca Elmore-Yalch described the two components of the research. The qualitative research, conducted in August 2011, evaluated customer attitudes, while the quantitative research, conducted in October-November, focused on exactly how much less business mailers might do with the Postal Service if the mail slowed down.

Although the witnesses for the Postal Service were reluctant to mention it, we’ve learned from testimony that there was another quantitative study, done back in August or September, at about the same time the qualitative research was being done.  The Postal Service now says this phase-1 quantitative research was “abandoned” before it was completed, "with the result that no analysis of its preliminary results was pursued."  The Postal Service paid ORC over $430,000 to do the work, but it never analyzed the results.

The Postal Service has given the PRC the data for both phases of the quantitative research, but they are classified as “non-public” library references.  The Postal Service testimony (USPS-T-12, p. 22) includes calculations of lost volume and revenue for the phase-2 quantitative study, but not for phase-1.

The Postal Service says that because it didn’t complete the study there are no results to look it.  But when the existence of the other market research was first revealed in testimony by Gregory Whiteman, Manager of Market Research at the Postal Service, Whiteman stated, "In short order, the Postal Service plans to file two documents summarizing this research and its results." 

The PRC docket contains the market-research instruments — the concept statements and questionnaires — that were used for all three studies (the qualitative and both quantitative).   It’s worth taking a closer look to see how they were constructed and how they were changed for the phase-2 survey.  From the looks of things, it seems that the second time around, the Postal Service wanted to elicit responses that would result in less significant impacts on mail volumes and revenues. 

The Case of the Missing Market Research Study

March 13, 2012

The Postal Service’s Big Hurry to consolidate 223 mail processing plants may be running into serious speed bumps.  The AMP studies don’t add up to anything like what the Postal Service says it will save nor do they reveal where most of the 35,000 eliminated positions will come from. 

Now there’s news of a market research study on potential revenue losses the downsizing initiatives may cause that the Postal Service chose not to tell anyone about — and that it still wants to keep under wraps.

News of this other research was first revealed back in February, in testimony by one of the Postal Service witnesses for the Advisory Opinion on the Network Rationalization plan being conducted by the Postal Regulatory Commission.  Last week the Postal Service gave the PRC the data from this market research, along with a request to keep the materials “non-public.”  The Postal Service is also saying that because the research was “abandoned” before completion, there are no calculations on lost volume and revenues to look at. 

That's not sitting well with the participants in the Advisory Opinion process, and we're going to be hearing a lot more about this missing market research study.  Next week, witnesses for the Postal Service will be cross-examined before the Commissioners, and the market survey is sure to come up.

In the meantime, today Congressman Gerald E. Connolly of Virginia filed a Motion for Termination of Non-Public Status with the PRC.  The Congressman argues that "customers and policy makers should have the opportunity to review information on the likely revenue impact from these proposed reductions in service and facilities," and if the market research contains information that would help Members of Congress "to better understand the ramifications of these proposals," the material should not be classified as "non-public."  As Congressman Connolly writes in his motion, "the public has a right to know about possible revenue impacts from these proposals."


The two phases of market research

In preparing its case to the PRC on the Network Rationalization plan, the Postal Service commissioned market research to determine how much the revised service standards and slower First-Class mail would affect mail volumes and revenues.  The qualitative research was conducted in August 2011, using focus groups and in-depth interviews with mailers large and small.  The quantitative research was done later, in October.  The results were incorporated into testimony presented to the PRC in December, when the Request for an Advisory Opinion was submitted. 

While the qualitative research took a broad look at various factors — closing post offices, eliminating Saturday delivery, legislative proposals to change the pre-funding of retiree health care, as well as the plant consolidations and changes in service standards — the quantitative research presented in the testimony focused solely on the change in service standards. 

The research showed that mail volume would decline by 1.7% — nearly 2.9 billion pieces a year.  Just to put that in perspective, the Boston Consulting Group (BCG) has projected that diversion to the Internet would cause mail volumes to decline 1.5% a year through 2020.  In other words, the plant consolidation plan would impact mail volumes even more than the Internet.

This 1.7% decline in volumes translates to a revenue loss of $1.3 billion (2% of annual revenues).  That loss is adjusted to reflect the lower costs of processing lower volumes, resulting in a net “contribution” loss of $500 million.  That amount is then subtracted from the total cost savings of $2.6 billion that the Postal Service hopes to realize from the plant consolidations, leaving us with a net savings of $2.1 billion.  [USPS-T-12, p. 22]

The accumulating evidence in the PRC’s docket on Network Rationalization suggests that the market research presented in December was actually the second round of quantitative research.   The first phase was done months earlier, back in August or September, and rather than focusing solely on service standards, it encompassed the broader range of issues that the qualitative research examined, like the plan to close post offices and eliminate Saturday delivery.

The story on the market research and how the Postal Service prepared and shared the plan to optimize the processing network is worth examining in detail, so here are a couple of timelines to help put the pieces of the puzzle together.

Great minds think alike, and so do USPS District Managers

March 12, 2012

Over the past few days, Postal Service District Managers across the country have submitted “opinion” pieces to their local news media, and somehow they all stumbled upon the same words.  At least thirteen DMs have written one of these “opinions,” and they’re all the same, almost word for word.

The Postal Service pulled the same PR stunt a few months ago at Christmas time, when almost 30 DMs each “authored” the same opinion piece and letter to the editor for their regional news publications.  We’ll keep track to see how many weren’t embarrassed enough the first time around and were willing to do it again.

“America needs a financially stable postal service to best adapt to a changing marketplace and evolving mail needs,” begin the District Managers.  That’s why the Postal Service is proposing a “significant consolidation of its national network of mail processing facilities” — reducing the total number of facilities from 461 to a little more than 200 by the end of 2013.

From there on, the piece is all spin designed to exaggerate the Postal Service’s financial problems in order to justify the downsizing.  The piece points, for example, to declining mail volumes — 212 billion in 2006, 168 billion in 2011, and a projected 130 billion by 2020.  There’s no mention of the recession as the cause for most of the lost volume, and no explanation why the Postal Service has decided things will get even worse than the 150 billion that its consulting firm, Boston Consulting Group, projected for 2020.

“In just the past financial quarter,” the DMs go on to say, “the Postal Service lost $3.3 billion and is projecting steep losses for the remainder of the year.”  The DMs don’t mention that during the first quarter, the Postal Service actually showed a $200 million profit.  They don’t explain that the loss of $3.3 billion was due almost entirely to unnecessary payments to the retiree health care fund — a double payment, in fact, since the Postal Service skipped the payments last year.

The piece then says, “No one is to blame.  Times have just changed.”  As usual, it’s all about the Internet: Don’t blame us, say the District Managers, blame Facebook and Twitter.  Postal management would thus have us believe they didn’t see e-diversion coming and just got caught off guard.  We’ll see how that kind of excuse goes over with shareholders when the Postal Service is privatized.

“In spite of all this,” write the District Managers, “the demise of the Postal Service is greatly exaggerated.”  That’s strange to hear, since it’s the Postal Service that is doing most of the talking about its imminent demise if Congress doesn’t give it permission to dismantle itself.  The opponents of the downsizing are the ones trying to calm down the rhetoric and advise caution.  But it’s hard to get that message out there when the Postmaster General and his team are going around telling everyone how bad things are and feeding the media frenzy with shocking headlines about multi-billion dollars losses.

There’s one interesting note at the end of the “opinion” piece.  The District Managers say that there’s a moratorium on closings until May 15, “to give Congress and the Administration the opportunity to enact an alternative plan.”  Does that mean the Postal Service might not proceed with the post office closings and consolidations if Congress and the White House come up with something better?  Is the threat of post office closings and plant consolidations just a way of blackmailing our elected leaders? 

One wonders how the editors at all of these news outlets would feel if they knew that the “opinion” piece they published was not written by someone in their area, but by an anonymous person in postal headquarters in Washington, DC. 

Perhaps we should let them know.  If your local news source has published one of these pieces, why not write a letter to the editor responding to the argument in the piece and noting that it wasn’t even written by the person whose name appears on it?  Or just give the editors a phone call and let them know what’s up.

Here’s a list of the “opinion” pieces we’ve discovered so far, with the name of the District Manager whose name appears as the author of the piece.  If you come upon another, hit the contact link at the top and we’ll add it to the honor roll.  

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On Privatization

Good Reading on Postal Privatization

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

save your p.o.

Organizing to Save Rural Post Offices

A Community Organizing Toolkit

Revised November 2012

[pdf doc] [word doc]

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