Postal Service publishes Final Rule on service changes for Standard Mail

March 5, 2014

Today the Postal Service published the Final Rule on the Load Leveling plan in the Federal Register.  As the Rule states, "The Postal Service is revising the service standards for Standard Mail that is eligible for Destination Sectional Center Facility (DSCF) rates. These changes will allow a more balanced distribution of DSCF Standard Mail across delivery days."  The effective date is April 10, 2014.  

Apparently the Postal Service is not going to wait to hear what the Postal Regulatory Commission has to say about Load Leveling in its Advisory Opinion, which is due out around March 27.

It’s been clear for a while now that the Postal Service was going to implement the plan regardless of what the PRC or anyone else had to say about it.  We made that point in a previous post, and last week, the PRC’s Public Representative discussed the matter in her Reply Brief

As the PR notes, in comments filed with the Commission, Quad/Graphics stated that during a January 10, 2014 webinar with mailers, the Postmaster General said that he planned to go ahead with the Load Leveling Plan regardless of the Commission’s opinion.  Many of the mailers have said that they felt “railroaded” and “manipulated” by the Postal Service and that they believed the Postal Service decided to move forward with these changes “with limited regard to the views of its customers.”

The Public Representative reviews these comments from the mailers and then goes on to state the following:

The Postal Service’s predetermination that the Load Leveling Plan will be implemented regardless of mailer views and the Commission’s opinion does not represent “best practices of honest, efficient, and economical management.” While the Commission’s opinion is an advisory one and non-binding in nature, the whole purpose of the 39 U.S.C. § 3661 proceeding is for the Commission to provide its expert advice to the Postal Service. To predetermine that the advice is irrelevant to the Postal Service’s decision, particularly in light of the fact it is required by statute, does not reflect best management practices. Best practices should include consideration of both customer concerns and available advice, even if the final determination differs from the weight of the feedback received.

The Public Representative provides a detailed analysis showing that in two of the three operations tests the Load Leveling plan failed to level mail volumes and that carrier street time productivity actually decreased.  The PR also argues that “the Postal Service has not provided evidence of the burden that the Load Leveling plan is intended to reduce and misstates the extent of carriers out past 1700 problem.”  She also notes that the Postal Service did not do any cost-savings analysis or any market research on how much volume and revenue might be lost as a result of slowing down Standard Mail.

The Postal Service has provided a detailed Reply Brief of its own, responding to the arguments presented by the Public Representative and the mailers.

But the back-and-forth arguments before the PRC don’t seem to be of much consequence.  As indicated by the Final Rule published today in the Federal Register, the Postal Service is going ahead with the plan.  The fact that there’s an Advisory Opinion under way is relegated to a mere footnote in the Final Rule.

(Photo credit: SCF in Kearny, New Jersey)

Under same management: Some reservations about postal banking

March 2, 2014


A recent report by the USPS Office of Inspector General on offering financial services at the post office won immediate support from Senator Elizabeth Warren, and postal banking was thrust into the limelight.  A big front-page story in Huffington Post entitled “Breaking the Banks” by Elizabeth Swanson offers polling data (and a poll of its own) that shows 44% of Americans favor letting the Postal Service getting into the banking business.  After the president’s State of the Union message, David Dayen, writing in the New Republic, suggested that President Obama use his executive powers to order the Postal Service to consider postal banking.  Dayan has another piece in Salon about how postal banking could even "save the economy."

While some news sites have been touting the idea as a way of saving the Postal Service, others have dismissed the idea as government overreach.  The division of opinion falls along fairly predictable ideological lines, with the Left largely in favor and the Right mostly opposed, although as recently as last August Reihan Salam of the conservative National Review was touting the idea of postal savings accounts.

As many of the news articles and op-ed pieces point out, postal banking is not a new or very original idea.  The old Post Office Department offered savings accounts up until the early 1960’s.  Japan’s largest savings bank operates out of the post office, and many other foreign postal systems offer some form of financial services or banking.

In several pieces here on Save the Post Office, I’ve suggested that the postal network would provide an excellent platform for limited banking services, like small savings accounts, check cashing, electronic bill presentment, and payment systems.  These services could bring the unbanked and the underbanked, as well as those with marginal or no access to the Internet, into the 21st-century economy.  In many ways those kinds of services are a natural fit with a postal network oriented to public service.  

Done properly, offering basic financial services through the postal network would be attractive and beneficial, not just to those at the bottom of the economic spectrum but also to many in the middle class as well.  An initiative like this could be a wise way to preserve and expand our existing postal assets while preserving hundreds of thousands of good postal jobs.

Considering that I myself have been a proponent of postal banking, I hate to throw a wet blanket on the idea.  The proposal has gained tremendous traction and gotten many people excited, but there are just too many reasons to be skeptical.  Given the current structure of the Postal Service, the mindset of its leadership, and the attitudes and expectations of politicians in both Congress and the Administration, a move towards postal banking would not only be unlikely to save the Postal Service and the postal network, but it could also turn out to be as abusive and harmful as the current landscape of payday lenders and predatory banks.  The last thing we need right now is for the Postal Service to try to balance its books by extracting billions of dollars in fees from some of the most financially vulnerable folks in society.  That’s not the way to save the post office.

Postal Service’s Load Leveling plan hits a load of opposition

February 23, 2014

Earlier this week, there were reports that letter carriers in Washington, D.C. were told by management to end their routes before completing their deliveries in order to keep down overtime costs.  Apparently this caused massive pileups of undelivered mail and delivery delays.  The Postal Service has denied the claim, saying carriers were told to return at 6 p.m. for safety reasons because of a snowstorm.

There may be another explanation for why carriers have been told to return by 6.  The Capital area is one of the places where the Postal Service has been testing Load Leveling, the plan to slow down delivery of some Standard Mail in order to spread the volume out more evenly during the week and get carriers back in the office sooner.  It’s possible that the Postal Service told carriers to return before 6 in order to show that the Load Leveling plan will work as advertised.

The problem with this theory is that the dates don’t quite work out.  According to a spreadsheet filed with the Postal Regulatory Commission this past week, the Load Leveling test was conducted out of the Curseen-Morris processing plant in Washington, D.C., during January 4 - 17 and January 24 - 31, while the order to return to the office by 6 p.m. apparently took place during the week of February 10.

In any case, if letter carriers in D.C. are now being told to return by 6 and delivery is being delayed, it wouldn’t be a surprise.  That’s essentially the goal of Load Leveling, and even though the Postal Service has said the plan would not be implemented until the end of March, it has been clear for a long time that it was going to happen, regardless of what anyone had to say about it.


Moving ahead regardless

When the Postal Service submitted its Request for an Advisory Opinion on the Load Leveling proposal on December 27, its tone implied that the plan would be implemented no matter what the PRC said: “The earliest that the Postal Service intends to make the changes discussed in this Request is March 27, 2014 — 90 days after the date of this filing.”

The 90 days cited here is a reference to the Commission’s regulations (39 CFR § 3001.72), which require the Postal Service to file the request for an advisory opinion “not less than 90 days in advance of the date on which the Postal Service proposes to make effective the change in the nature of postal service involved.”  But the tone of the Postal Service’s statement points to other matters.

In the past, the PRC has taken longer than 90 days, sometimes much longer, to complete advisory opinions, and this has become an issue not only with the Postal Service, but Senator Tom Carper and the Commissioners themselves. The Commission is therefore now in the process of trying to revise its rules in order to expedite the process.  The revision has lagged, though, because of disagreements among the stakeholders, many of whom are concerned that an expedited process will deny them of due process.

With this statement in the Load Leveling Request about the 90 days, the Postal Service put the Commission on notice that it might implement the plan at the end of March, even if the advisory opinion isn’t done yet.  The Postal Service also makes it sound as if it’s not going to spend weeks digesting what the Commission has to say — it could implement the plan on the same day the advisory opinion is issued.  

If one gets the impression that the Postal Service doesn’t much care what the advisory opinion says, it’s more than an impression.  According to comments filed this week with the PRC by Quad/Graphics, the Postmaster General told mailers during a webinar on January 10, 2014, that “regardless of the Advisory Opinion of the Postal Regulatory Commission (PRC), he intended to implement the change no earlier than late March.”  

As a result of the PMG’s statement, says Quad/Graphics, “many in the mailing community felt that comments [to the PRC] would be a waste of time since the USPS was set on moving ahead with the changes regardless.”

In fact, it seems that Load Leveling may have been a done deal even before the Postal Service filed its Request with the PRC in December.  Many of the mailers are now saying that they felt that way even when the Postal Service began talking about the plan in the spring of 2013.


Railroading the mailers

The Postal Service began discussions on load leveling with the Mailers Technical Advisory Committee (MTAC) sometime in early 2013, and in May it set up a subcommittee called Work Group 157 to focus on the plan.  Over the next few months, Work Group 157 met several times — the slideshow presentations are here — but apparently it was not a very inclusive process.  Many mailers are saying the Postal Service was not really interested in their opinions.

USPS Environmental Assessment on historic Stamford post office runs into problems

February 17, 2014

There have been several new developments in the story of the historic Stamford post office.  Last week, the Postal Service filed a status report with the PRC about its search for a new location, and earlier this month, the USPS filed papers in federal court opposing the complaint that has held up its sale of the building to Westchester developer Louis Cappelli. 

In addition, attorneys for the National Post Office Collaborate, one of the parties that filed the complaint, have responded to the Postal Service’s Environmental Assessment on the property with a scathing critique.  They say the EA is "procedurally and substantively defective in violation of the National Environmental Policy Act of 1969 and the USPS’s own guidelines."

At this point, it looks as though the lawsuit and the future of the Stamford post office are a long way from being resolved.  Here’s a rundown on these latest developments.


The search for a new location

The Postal Service’s status report on the emergency suspension was filed on February 14, as directed by the PRC’s order dismissing the appeal, which was issued at the end of January.  The Postal Service says that it has been working since September to find a new location for the post office, and it has its eye on a couple of possibilities. 

It’s clear from the status report that the Postal Service has no intention of reopening retail operations at the current location.  That was pretty clear back on September 20, when the Postal Service closed the Stamford post office on two days’ notice.  What's less clear is why the post office closed to begin with. 

When the Postal Service gave notice in September that the post office would be closing in a couple of days, it explained that the building was being sold (the closing date was supposed to take place the following week) and no new location had yet been arranged.  A couple of weeks later, however, after the lawsuit was filed to stop the sale, the Postal Service came up another explanation — the post office was put under emergency suspension due to unsafe conditions in the building, discovered on a safety inspection in early September. 

Both explanations seemed dubious.  There was a provision in the sales agreement allowing the Postal Service to remain in the building after the sale, so why would the pending sale necessitate suspending operations?  The condition of the building has been deteriorating for years, and most of the problems are in parts of the building that aren't even used, so why close the post office suddenly over saftey issues?  And what prompted an inspection less than a month before the building was to be sold?  These questions remain unanswered.  

In any case, finding a new location for the post office has turned out to be something of a problem.  It's not very easy finding space in downtown Stamford, where rents are high and parking is at a premium.  The Postal Service may have started the search for a location in earnest back in September, but it has known since 2009 that it would eventually need a new location, and it still hasn’t found one.  

The PRC will probably keep its eye on the progress toward opening a new location.  If the Postal Service does not open a facility elsewhere in Stamford, the appeal, which was dismissed "without prejudice," will probably be resubmitted on the grounds that the suspension was actually a de facto discontinuance.

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