Thinking inside the PO Box

January 17, 2014


On January 26, postage rates are going up — about 6 percent across the board, which means a First Class stamp will go from 46 to 49 cents.  But there's another rate increase going into effect on that day, and it hasn't gotten much attention.  

Three weeks ago, deep in the back of the December 26 issue of Postal Bulletin (on page 69), the Postal Service announced that it was raising the fees on post office boxes at some of its post offices.  Depending on the size of the box and the fee group, the new rental prices for a six-month period will range from $16 to $625. 

The new fees are within a range previously approved by the Postal Regulatory Commission back in December 2011, so they do not need any additional approval, and the Postal Service simply informed the PRC of the new fees in a letter on December 27.

Raising rates on boxes at just some post offices is actually a relatively recent event.  Historically, box rates were considered market-dominant products and subject to rate caps. That changed a couple of years ago, though, when some 6,800 postal facilities were classified as “Competitive Post Offices.”  At these offices, the Postal Service could charge higher fees than at its “regular” post offices. The Postal Service also added some service enhancements for these competitive boxes.

The issues surrounding fees for PO boxes are rather arcane, and the story of how the PO boxes at some offices came to be categorized as competitive is not likely to make headlines.  But PO boxes are an important part of the postal infrastructure, and what happens to them is inextricably tied to what’s happening to the rest of the Postal Service infrastructure of post offices, processing plants, historic buildings, vehicles, and workforce.  To understand the significance of what's going on with PO boxes, it helps to start with a little history.


From Kappel to PAEA

In June of 1968, the President’s Commission on Postal Organization — the Kappel Commission — issued its report, “Towards Postal Excellence.”  Its primary conclusion was that the executive departments of the federal government were “inappropriate” for the Post Office, and it recommended instead that Congress charter Government-owned Corporation to operate the postal service.

The Postal Reorganization Act of 1970 implemented the Kappel Commission’s recommendation. It changed the Post Office Department into the Postal Service while moving it from its status as a cabinet agency to a semi-corporate entity owned by the government.

For the next three decades, mail volumes grew — from 50 billion pieces of First Class mail in 1970 to over 103 billion by 2000 — and so did the workforce —  from  550,000 career employees in 1970 to nearly 800,000 in 2000.

Even as the Postal Service was growing, the leadership of the Postal Service, as well many in Congress, were envisioning a downsized Postal Service with a significantly smaller footprint.  That was precisely the point of then PMG Jack Potter’s 2002 Transformation Plan

Potter argued that the appropriate response to encroaching technologies was to treat postal infrastructure as unnecessary and overbuilt industrial capacity.  Rather than adapt, modernize, and find alternate uses for valuable postal infrastructure, the Transformation Plan envisioned a future environment that would jettison much of the retail network and shrink the mail processing network by using workshare discounts to transfer much of the work to the private sector.

Alternatives to the Post Office: Expanded Access in FY 2013

January 16, 2014

The APWU is currently sending delegations to Staples stores in their communities to meet with store managers to protest the postal counters that have been installed at 82 stores, with plans for more.  After the visits, the APWU plans to organize a day of action at Staples stores around the country, followed by sustained actions at a number of stores where postal retail units have opened.

Putting these contract postal units — or “mini post offices,” as they’re being called — in Staples is a threat not just to union jobs but to brick-and-mortar post offices in general.  It represents the latest initiative by the Postal Service to get rid of post offices — something it's been wanting to do for a long time, with encouragement from a variety of sources.

Some big mailers — like Valpak, for example — view post offices as a financial burden on the Postal Service, and they would prefer alternatives that are less costly to operate, like CPUs, to help keep their rates down.  Advocates of privatization, like the National Academy of Public Administration, recommend privatizing the retail network by replacing post offices with postal counters in retail stores, gas stations, schools, coffee shops, movie theaters.

The GAO regularly issues reports about how much money could be saved by closing thousands of post offices.  The GAO has been doing this for decades.  In 1975, for example, it issued a report recommending that Congress change the laws on closing post offices so that the Postal Service could close 12,000 post offices and save $200 million.  A 2011 report recommended much the same, and pointed to all the cheaper alternatives, like kiosks, CPUs, and stamp retailers.

President Bush’s 2003 Commission on the Postal Service recommended expanding alternative access as a way to pave the way for post office closures, and the 2006 Postal Accountability and Enhancement Act (sec. 302) made that recommendation part of the law by directing the Postal Service to expand “alternative retail options” like vending machines, kiosks, the Internet, and “retail facilities in which overhead costs are shared with private businesses."  The Postal Service doesn't really hide what it's all about.  In 2011, it called the plan to close 3,700 post offices "Expanded Access."

In accordance with PAEA, every year the Postal Service summarizes the progress it has made in expanding retail access as part of its Annual Compliance Report (ACR).  The Postal Regulatory Commission then reviews the numbers as part of its Annual Compliance Determination Review (ACDR).  As a result of the compliance review, a lot of the data about post office closures, contract units, and so on becomes part of the public record.

Both the ACR and the ACDR, it should be noted, basically take it as a positive thing that access to postal services is being enhanced in many ways.  They don’t explore the fact that "expanded access" is largely about closing post office.  In any case, here’s a look at what this year’s ACDR has revealed so far with respect to alternative retail access.

Postal Service proposes changing environmental regulations on post office disposals

January 13, 2014

The Postal Service has proposed a revision of federal regulations that would help it avoid going through an extensive environmental review process when disposing of postal properties like post offices.  The Postal Service wants to make things easier because it has many more sales planned for the future.  As the posting in the Federal Register says today, “The Postal Service anticipates that the frequency of property disposals will persist or increase in the foreseeable future.” 

In the Interim Rule published today in the Federal Register, the Postal Service requests comments on proposed changes to 39 CFR Part 775, the section of the federal regulations that deals with National Environmental Policy Act Procedures. 

The changes may seem relatively minor, and the Postal Service states that it does not believe “the proposed revision should be significant or controversial.”  But nothing could be further from the truth: The proposed changes are extremely significant, and they will be the source of considerable controversy and opposition.

The changes are clearly intended to avoid the kind of problems the Postal Service encountered trying to dispose of the historic post office in Stamford, Connecticut, where the sale was challenged in federal court by the National Post Office Collaborate, the Center for Art and Mindfulness, and a Stamford resident.  That sale was blocked, and it is still being held up, precisely because the court found that the Postal Service had failed to follow its own NEPA requirements.  Now the Postal Service wants to revise the language governing these requirements so that this doesn’t happen again.

Sale of historic Bronx Post Office moves forward; bids due Jan. 15

January 12, 2014

The Postal Service is moving forward on the sale of the historic Bronx General Post Office at 558 Grand Concourse in New York City.  The property is listed on the USPS-CBRE Properties for Sale website, where a new Call-for-Offers announcement says interested parties should submit their bids by 5:00 p.m. on January 15.  (The listing is here.)

The announcement doesn’t list an asking price as the Properties for Sale website does for many other postal properties, but the Bronx GPO is also listed on LoopNet and PropertyShark with some prices.  The total assessed value is $6,581,700, and the current value of the building is $14,626,000.  There are details and photos about the property on this CBRE flyer.  (You need to be a member to see the LoopNet info, so a pdf is here.)

None of these website listings is dated, so it’s not exactly clear when they were first posted.  There’s a cached version of one page with information about the sale dated November 7, so that may be when the listing first went up on the Properties for Sale website.  On the current version of the listing, the notice announcing the Call-for-Offers is printed in a red font and it starts out “NEW.”  Based on the cached versions of the site, it appears that this Call-for-Offers notice was posted on January 1. 

Those dates fit roughly with what the original posting said: “CBRE, Inc. will be conducting a 45-day marketing program to allow time for all interested parties to tour the property and collect all necessary information.  It is anticipated that a Call-for-Offers date will be set for mid-December.  When finalized, the Call-for Offers date will be posted on this website.”

Presumably, then, the 45-day marketing program began in early November, and the Call-for-Offers was postponed from mid-December to the first of the year.  Interested buyers were then given two weeks to submit their bids.  It's pure speculation, but given the short time frame, there may be an interested buyer — or several — waiting in the wings.


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On Privatization

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


Privatization in the UK

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Organizing to Save Rural Post Offices

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Revised November 2012

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