Who owns the Postal Service?

March 18, 2015


Who owns the post office?  Who is the post office designed to serve?  What is the system’s ultimate function?

These questions are fundamental to the future and the fate of the post office, the postal network, and postal services in this country. How we answer them will have a significant impact on businesses, workers, and communities.

We know the Constitution instructs — or more accurately, permits — Congress to make arrangements for post offices and post roads.  That is a good indication that the Founders saw postal services and the infrastructure that supported them as broadly essential to the nation — nation in their reckoning being the sum of the people.

But Congress has abdicated its responsibilities.  It no longer functions as a deliberative body and has become increasingly ineffective as a legislative body.  The Postal Service's Board of Governors has proven to be equally ineffective and has left postal managers to run operations as they see fit.  The regulatory system is relatively limited and not really able to represent the interests of the public as a whole.

All in all, the Postal Service is simply not accountable to the American people in the way it should be — or the way it must be if it is to survive as a vibrant public postal system, as envisioned by the Founders

In the debates about the Postal Service, the public interest is too often forgotten.  It's worth quoting yet again the stirring words of Title 39:

"The United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people. The Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people. It shall provide prompt, reliable, and efficient services to patrons in all areas and shall render postal services to all communities. The costs of establishing and maintaining the Postal Service shall not be apportioned to impair the overall value of such service to the people."

If these words are to mean anything, the leaders of the Postal Service, Congress, and the Executive branch must be reminded that the Postal Service is there to serve not some narrow economic interests but the people of the United States. 



The vision of the Founders

There are only a couple of mentions of the post office in the Federalist Papers, the set of writings by Madison, Hamilton, and Jay which offered the explanation and underlying reasoning that supported the new Constitution.  In Federalist 42, Madison wrote:

“The power of establishing post roads, must in every view be a harmless power; and may perhaps, by judicious management, become productive of great public conveniency. Nothing which tends to facilitate the intercourse between the states can be deemed unworthy of the public care." (emphasis added)

Benjamin Franklin certainly had a great deal to say about the post office.  As one of the inspirational leaders of the new nation and its first Postmaster General, Franklin clearly saw the importance and value of a robust postal system.  Early in his career as a printer and publisher, Franklin was disadvantaged because a competitor, Andrew Bradford, used his power as a postmaster to deny Franklin’s papers access to the postal system — an act that impressed upon Franklin the importance of broad access to the post.  In his biography of Franklin, Walter Isaacson says that the benefit of Franklin’s tenure as colonial postmaster, greater than the compensation he received, “was that it furthered Franklin’s conception of the disparate American colonies as a potentially unified nation with shared interests and needs.”

The Founders clearly recognized that an infrastructure that could serve to bind the nation together was essential not only for the free flow of information but also as a means of enhancing commerce. Washington even argued that newspapers and journals should travel the mails for free, while Madison suggested their cost be subsidized but that as matter of economy there should be a charge.  Whatever the expectations on funding or self-sufficiency, it is clear that the Founders saw a need for a public post, a postal system that belonged to and served the American people broadly.

"We Deliver for Amazon": The Postal Service's New Priority

March 15, 2015

A former postal worker in Greensboro, North Carolina, named Paul Barbot has written two excellent articles for Alternet about his experiences dealing with Amazon deliveries as a City Carrier Assistant (CCA).  The first of them — “The Horrific New Marriage Between Your Post Office and Amazon Sunday” — was published in February, when Barbot still worked for the Postal Service.  The second, “The Real Cost of ‘Amazon Sunday,’” came out a few days ago, not long after Barbot left the post office.

Barbot describes what it’s like serving as an overworked, underpaid non-career employee and how the deal to deliver Amazon packages on Sundays is causing all sorts of problems.  The problems got so bad, in fact, that Barbot had to quit.

Apparently, the high turnover of CCAs is becoming a serious issue.

In its 2014 Annual Report to Congress, the Postal Service noted that while the target for Deliveries per Hour in in FY2014 was 42.9, the actual result was 42.0. The Postal Service offered several explanations for why the target was not met, including the overrun of an aggressive work hour plan and additional hours used to avoid delaying mail during the Christmas season. 

The Postal Service also pointed to three other explanations, all of which have to do with delivering for Amazon: the additional workload from Sunday package delivery, the hiring and training of many new non-career employees, and a high turnover rate — in excess of 40 percent — for CCAs. 

As part of the Annual Compliance review being conducted by the Postal Regulatory Commission, the Postal Service was asked about the turnover rate in a Chairman’s Information Request.

The PRC noted that in FY 2014 the Postal Service extended the Voice of the Employee Survey to all employees. “Based on the Voice of the Employee Survey results,” asked the Chairman, “what insights were gained about the high turnover rate for city carrier assistants?”

In its response, the Postal Service observed that the FY 2014 VOE index score for non-career employees was actually thirteen points higher than for career employees.  The Postal Service then went on to say the following:

“A review of the FY 2014 exit data indicates ‘Personal Reasons’ as the top cause of CCA resignation. Comments associated with the ‘Personal Reasons’ selection cited life situations that could not be accommodated with the job requirements, for example, dependent care, a desire to finish school, and work schedules.”

The Postal Service thus makes it seem as if CCAs are resigning simply for “personal reasons” that have nothing to do with how they are being treated or how the Amazon deal is causing problems.  Barbot’s Alternet pieces tell a much different story.  


Walmarting the post office

While the details of the Negotiated Service Agreement with Amazon remain secret, it’s become clear that the Postal Service’s deal to deliver on Sunday involves postal rates that would not be profitable were it not for CCAs, who earn far less than regular career employees.  CCAs are the foundation upon which the NSA with Amazon is based.

In Greensboro, as in many other communities, CCAs are required to work seven days a week so they can deliver Amazon parcels on Sundays.  After “Amazon Sunday” came to Greensboro in November 2014, some CCAs simply could not keep up the pace of working everyday.  They got sick, missed days, and were threatened with being fired. 

Barbot, who had been praised as an exemplary CCA during his two previous years, could not do Sundays because his wife works as a nurse on Sundays and he has to stay home to take care of their five children, ages 10 to 2.  Explaining all this to his supervisors did no good.  After he missed several Sundays and was threatened with being released from the Postal Service, Barbot resigned.

According to the Postal Service, then, Barbot chose to resign for “personal reasons,” and the only problem worth worrying about is missing the target for Deliveries per Hour. 

But the real problem is that the Postal Service has made a deal with a large private retailer that would not be possible without exploiting non-career workers.  As Barbot says, it’s all about the “Walmartization” of the Postal Service.

Post office in Hinkley, CA to close: What would Erin say?

March 14, 2015

The Postal Service is closing the post office in Hinkley, California, on March 20 for an emergency suspension.  According to the local news report, the building housing the post office is being sold to Pacific Gas & Electric.  Hinkley's only gas station and market are also in the building, and they'll be closing too, so this will be a big loss to the community.

While it’s possible that the Postal Service will eventually find a new location in Hinkley, that doesn’t appear likely.  The news report says PG&E offered to help find another location, but the Postal Service is installing a cluster box unit instead, and it has told residents that if they need to do business at a post office, they’ll have to drive over 14 miles to Barstow. 

Hinkley is a small, unincorporated community in the Mojave Desert, with a population of about 1,900 (as of 2000).  The new owner of the post office building is not just any business in town, and one wonders why PG&E wanted to buy the building in the first place.

According to the Wikipedia article, Hinkley is the location of a compressor station for PG&E's massive natural gas transmission pipelines.  Between 1952 and 1966, the water used to cool the compressors contained hexavalent chromium to prevent rust in the machinery. The water was stored in unlined ponds and ultimately contaminated the groundwater in the area.

Residents of Hinkley filed a class action suit against PG&E, which resulted in a multi-million-dollar settlement in 1996.  

If any of this sounds familiar, it’s probably because the legal case was the subject of Erin Brockovich, the 2000 film starring Julia Roberts.

Unfortunately, the legal settlement wasn't the end of the story.  The cleanup of the underground plume of contaminated water is still going on, and the plume is apparently just getting bigger.

Regarding the closing of the market and post office, PG&E issued a statement saying, "PG&E understands that the market is an important part of the Hinkley community, and that it will be missed by many Hinkley residents. PG&E remains committed to working with Hinkley residents on other community-focused initiatives.”

The letter PG&E wrote the Postal Service gives March 24 as the date for vacating the building.  Coincidentally enough, that’s also the date that the Postal Service’s lease on the space ends.

More than likely, then, the Postal Service knew long ago that it would not be renewing the lease, so it it’s not clear why residents are being informed just one week before the post office is closing. 

For those who can't make the long drive to Barstow, the Postal Service says that they can have stamps mailed to them by making orders on the U.S. Postal Service website at www.usps.com.  

(Photo credits: Hinkley market and post office (Google street views); Julia as Erinmailboxes in Hinkley)

Things are looking up: The Postal Service's financial report for January 2015

February 26, 2015

The Postal Service released its financial statement for January 2015 yesterday.  It shows that for the first four months of Fiscal Year 2015 (Oct. – Jan.), the Postal Service posted a $1.325 billion profit in Controllable Operating Income.  That’s compared to a $912 million profit for the same period last year (SPYL).

During this period, the Postal Service owed $1.9 billion to the Retiree Health Benefit Fund (RHBF) and $1.496 billion for an adjustment to its Workers Compensation fund due to “the impact of discount and inflation rate changes and the actuarial revaluation of new and existing cases.”  There were also some income and expenses associated with interest.

All told, the net loss so far in FY 2015 is $2.125 billion, compared to $1.38 billion for the same period last year.  The main source of the difference was the Workers Comp adjustment, which was only $336 million last year at this time.

The news reports will of course say that the Postal Service has lost over $2 billion so far this year.  A few of them may mention the $1.3 billion profit in “controllable” income.

The report also has some good news in terms of mail volumes.  In January, First Class volumes were actually up 1.4 percent compared to last January, and for the year so far, they’re down only 0.5 percent.  Perhaps the steady slide of about 4 percent a year has come to an end, and volumes have found their “new normal.”

On the other hand, the numbers on First Class mail need to be taken with a grain of salt.  As the report notes, “Actual Vs. SPLY for revenue and volume may not be comparable due to a large PIHOP adjustment that occurred in Jan-14 related to a price increase.”  That refers to the effect of Postage in Hands of the Public, i.e., Forever stamps purchased prior to the effective date of the exigent surcharge.

Standard mail volumes are up 2 percent for the year so far, periodicals are down 5.3 percent, and shipping and package services are up 11.1 percent.  Total volumes are up 0.8 percent so far.

Revenues are also doing well, thanks largely to the exigent rate increase that went into effect a year ago.  First class revenues are up over 4 percent, Standard mail revenues are up 2 percent, and total mail revenues are up 3.8 percent.

As we suggested in a post back in November 2014, it appears that the exigent rate increase has not had the disastrous effect on mail volumes that some opponents of the increase predicted.  That may be because the increase is only temporary (it ends sometime this summer), or perhaps improvements in the economy have helped out the mail.

Whatever the explanation, mail volumes for FY 2015 look to be better than the Postal Service was projecting in September 2013, when it presented testimony to the Postal Regulatory Commission.  At that time, the Postal Service was seeking a permanent 6 percent rate increase — 1.7 percent for the CPI increase and 4.3 percent for the exigent increase.

The following table compares the projections from 2013 with what has actually happened.  

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