Modes of delivery

Canada gets cluster-boxed: Why it can’t happen here

December 15, 2013

Canada Post announced this week that over the next five years it would be converting five million urban residences from door delivery to cluster box units (CBUs), also known euphemistically as Community Mailboxes (CMBs).  Along with other cost-cutting initiatives, like consolidating processing plants, closing post offices, and reducing employee benefits, the Canada plan will supposedly save $700 to $900 million a year and involve eliminating 6,000 to 8,000 jobs. 

The news that Canada would get cluster-boxed was greeted with applause by Congressman Darrell Issa, whose Postal Reform Act (H.R. 2748) mandates a similar conversion for the U.S., with some thirty million residences and businesses being required to shift to cluster boxes over the next ten years.  There’s a similar provision in the Senate bill (S. 1486), but it’s more moderate — it requires a conversion program but shifts customers only on a voluntary basis, with no target numbers.

The Postmaster General has also expressed interest in switching to more cluster boxes.  In January 2013, he said, “We’ll be looking at some centralized delivery, rolling that out across the country – no major push, but starting to move on that.”  

Over the past year, there have been many instances of customers getting converted to cluster boxes, often on a less-than-voluntary basis.  The Postal Service has been using a variety of explanations for making the conversions, like protecting letter carriers from unchained dogs, and it’s been sending out misleading letters to customers telling them they need to change modes of delivery when in fact they don’t.

A couple of weeks ago, the National Association of Letter Carriers put out a news release noting that it had “become aware of an effort by the Postal Service in different parts of the country to convince customers to agree to change their mode of delivery to cluster box or centralized delivery.”  In order to make sure carriers and customers know their rights, the announcement reviews all the regulations, which include a requirement that customers must agree voluntarily to a change in the mode of delivery.

Despite all the signs that the U.S. is trending toward more cluster boxes, we are a long way from mass conversions.  Many politicians and commentators will point to Canada as a model to be imitated and a harbinger of things to come, but the United States will see a mass conversion to cluster boxes at about the same time we get a Canadian-style healthcare system.  


Learning from Canada

Time Magazine has already come out with an editorial arguing that "we can learn something from Canada."  Time says that switching to cluster boxes is "an essential step for the post office to remain self-sustaining in a digital age.  For Americans there should be only one reaction: envy."  

Time puts the blame for the fact that we're not following the Canadian lead on Congress, which keeps the Postal Service tethered "like a dog on a leash."  

But Time has it wrong.  Current law permits the Postal Service to change a customer’s mode of delivery on its own.  Mass conversions don't require Congressional approval.  The reason our postal system hasn't resorted to this particular austerity move is that it's a terrible idea.  

The Postal Service has long recognized that there are many problems with changing over to cluster boxes, not the least of which is angering customers, especially if you do it without their permission.  As one person commented about the Canada Post announcement, "Nothing gets people more riled up than having something they are accustomed to taken from them by the government."

So while Canada may be ready to make the switch to cluster boxes, and while Congressman Issa and Time Magazine may be applauding the move, there’s not much chance that it will happen in this country anytime soon.  It’s one thing to introduce cluster boxes for new residences and businesses, but converting the mode of delivery for millions of existing customers is another story.  

The Postal Service delivers the last mile, almost: Changing modes of delivery

June 10, 2013

The Postal Service helps out FedEx and UPS by providing “last mile” delivery of their parcels, and two recent studies argue that the Postal Service should privatize its retail and mail processing networks and instead "concentrate on what it does best” — last mile delivery. 

But mail delivery ain't what it used to be.  More and more, the Postal Service is leaving the last stretch of the last mile to its customers. 

If you’re used to getting the mail delivered to your curbside mailbox, you can look forward to going down the block to pick up the mail at a cluster box unit.  If you get your mail at the door, you may need to put up a mailbox at the curb, or you too may be traveling to the nearest cluster box.  “Centralized delivery” is the wave of the future.

In January the Postmaster General announced that the Postal Service would be switching over to more centralized delivery points (i.e., cluster boxes) to improve delivery efficiency.   “We’ll be looking at some centralized delivery, rolling that out across the country – no major push, but starting to move on that,” said Donahoe.  The PMG said the expansion of centralized delivery would take time, but it would start this year.

“It’s an opportunity to save some money and also provide better service,” said the PMG, “especially with parcel lockers that we’ll be installing at the same time.”  That’s a reference to the Postal Service’s new “GoPost” automated parcel delivery lockers, as discussed in this excellent post on Going Postal.

The amount of money that could be saved by changing modes of delivery is considerable.  The Postal Service currently spends about $25 billion to deliver mail to more than 150 million homes and businesses.  The average annual costs for city delivery are $353 for door delivery, $224 for curbside, and about $160 for centralized.  For rural delivery, the costs are $278, $176, and $126, respectively.

A study on “Modes of Delivery” done by the USPS OIG showed that the Postal Service could save more than $4.5 billion a year by shifting 35 million homes and businesses from door-to-door to curbside.  It could save another $2.8 billion by shifting 52 million homes and businesses from curbside to a cluster boxes.  If the door-to-door delivery points were shifted to centralized instead of curbside, it would save another $2.2 billion. 

Congress seems ready to go along with the conversion plan.  Congressman Darrel Issa’s proposed legislation already has a provision pushing centralized delivery, and Senator Tom Carper says Issa’s idea to shift mail delivery from door delivery to cluster boxes may be included in some manner in the final bill.


A plan without a plan

For new residential developments, the Postal Service can use whatever mode of delivery it wants, and that usually means cluster boxes.  As a USPS spokesperson explains, “Where the builder used to have a choice on type of delivery, we’re choosing for them – or at least moving in that direction.”

The Postal Service is also looking to change the mode of delivery whenever it can.  As a postal spokesperson told Post & Parcel in late January, the first areas to experience a change to cluster boxes will be business parks, industrial buildings, and shopping malls where mail carriers currently go business-to-business to drop off mail. 

For residential neighborhoods, the Postal Service isn’t supposed to change the mode of delivery without the customer’s permission.  According to the “agreement clause” in section 631.6 of the Postal Service’s Postal Operations Manual, a customer's signature must be obtained before conversion from one mode of delivery to another.   

In April 2012, the Postal Service revised the POM to give itself more authority to determine the mode of delivery when adding new delivery points.  But the passage about the agreement clause is still in the POM, and there's nothing in the revised POM saying that the Postal Service can unilaterally convert the mode of delivery for existing addresses.  

Nonetheless, one postal manager in St. Louis recently sent a letter to the St. Louis Apartment Association (SLAA) stating the following: "The Postal Service has revised the POM giving the USPS the autonomy to make changes to current mode of delivery.  The Postal Service is not currently unilaterally changing any current modes of delivery.  But it now has the authority to do so."  

That manager may have it wrong about the POM, but his letter to the apartment association is another example of how the Postal Service is pushing current residences to convert to centralized delivery.  His letter says that the Postal Service will pay for conversion to cluster box units now, but owners who pass up the offer risk having to pay for it themselves later.

The Postal Service is also finding other ways to convert current delivery points to cheaper modes of delivery.  Under some circumstances, the Postal Service can change delivery for existing residences even without the owner's permission, like when the safety of letter carriers is a concern. The dangerous dog rationale for ending door-to-door delivery seems to be occurring with increasing frequency.

It's clear that the Postal Service is, as the PMG put it, “rolling out” more centralized delivery.  There’s obviously a plan behind all this, but the Postal Service has yet to file a request for an advisory opinion from the Postal Regulatory Commission.  Eventually, there will be so many news stories about delivery conversions that it will become clear that the Postal Service is making a change in service on a nationwide scale and it will have to submit a request for an advisory opinion.  In the meantime, the conversions are taking place on what is supposedly an ad-hoc basis, as if there were no plan in place.

In a previous post back in January, we noted several news reports about places where the mode of delivery was being changed.  Here are a dozen more.

Coming sooner or later: An advisory opinion on modes of delivery

January 27, 2013

A couple of days ago, residents of Vermont — and apparently other states across the country as well — received a letter from the Postal Service requesting that they convert from mailboxes at the side of their door to a mailbox along the road.  The letter cites the advantages of curbline delivery — the postman doesn't have to deal with dogs, your mail is not exposed to rain or snow, and it's cheaper for the Postal Service — and it provides helpful information about what height to place the mailbox and how far from the road surface to locate the box. 

When the USPS Board of Governors announced two weeks ago that it intended to speed up cost-cutting measures in order to deal with the mounting deficit, there were no details about what those measures would be.  It now looks as though changing how the mail is delivered will be a key part of the stepped-up plan.  

If you've been getting your mail delivered to the door, expect a switch to curbside delivery.  If you already have curbside delivery, you could be converted to a cluster box unit located down the road.  The goal is eventually to get everyone on cluster boxes.

Because it knows customers won't like the changes, the Postal Service has not exactly embraced the conversion plan in the past.  But the proposal is part of legislation before the House (HR 2309), and it's described in detail in a USPS OIG report entitled “Modes of Delivery.” 

The OIG explains that in urban areas it costs $353 to deliver to the door (annually, per delivery point), while it costs only $224 to deliver to the curb, and $160 to a cluster box.  Moving everyone to cluster boxes could therefore save nearly $10 billion.  (There’s a post about the report and the whole topic here.)

Converting to easier modes of delivery might be safer and more convenient for letter carriers, but it won't be great for carriers overall.  Even if the Postal Service came up with a partial conversion plan aimed at only a portion of the OIG's total estimate — say $3 billion a year — that savings would come almost entirely from cutting jobs.  Figuring an average salary of $50,000 plus benefits, a savings of $3 billion would mean eliminating about 40,000 jobs.  There are about 250,000 rural and city letter carriers right now.  That means about one in six jobs would be lost.  (And you can add that to the job losses from eliminating Saturday delivery.)


Changing the rules for delivery

For years now, the Postal Service has been gradually shifting over to cluster box units in new residential developments, but it's not supposed to change delivery at existing addresses without the customer's permission.  According to the “agreement clause” in section 631.6 of the Postal Service’s Postal Operations Manual (POM), a customer's signature must be obtained before conversion from one mode of delivery to another.  That's why last week's letter from the Postal Service just requests that customers put up roadside mailboxes rather than requiring it.

There are circumstances, however, under which the Postal Service may make changes on its own, such as when the safety of carriers is a concern.  The Postal Service has been using the safety issue and other explanations in order to begin implementation of the delivery plan.  Over the past few months, there have been numerous news articles about changes in the mode of delivery in neighborhoods and communities across the country.  

Eventually, there will be so many such stories that it will become clear that the Postal Service is making a change in service on a nationwide scale.  At some point, the Postal Service will need to submit a request for an advisory opinion from the Postal Regulatory Commission.  As part of the request, the Postal Service will probably seek to revise the POM so that it can do conversions on an involuntary basis wherever and whenever it wants.

The Postal Service did the same thing in 2011 when it was closing post offices on a regular basis.  In the months before it presented its Retail Access Optimization Initiative — the plan to close 3,700 post offices — the Postal Service closed nearly two hundred offices, all the while claiming there was no plan and hence no need to request an advisory opinion.  Eventually, the number of closures reached a critical mass, and the Postal Service had no choice but to present a plan to the PRC for an opinion.

It's only a matter of time before the Postal Service presents a plan to the PRC about changing its policies regarding modes of delivery.  In the meantime, the conversions are happening on an ad-hoc basis, as if there were no nationwide plan in place. 


Threatening dogs in Fairway

In June, residents of a neighborhood in Reinhardt Estates, in Fairway, Kansas, saw their door-to-door mail delivery replaced with cluster boxes as a response to what the Postal service characterized as threatening behavior from area dogs. 

Residents objected, contending that the cluster box solution was too big of a step to take to deal with a situation posed by only a handful of homes.  It could have required the offending homeowners to get curbside boxes or required them to get their own PO boxes instead of forcing the entire neighborhood to use the cluster boxes.  

The previous letter carrier said that she had never had problems with dogs in Rinehardt, and the homeowners whose dogs were supposedly the problem offered several alternatives to avoid forcing their neighbors to switch to cluster boxes, like keeping their dogs inside, building a traditional fence, getting a PO box, or getting a curbside mailbox.  According to an elected official in town, the reply from the Postal Service was essentially, “Too late.”  

Got Mail? Go get it — the Postal Service has other plans

August 13, 2012

In its never ending search for ways to cut costs and reduce the deficit, the Postal Service may have come up with a real money-saver: stop delivering the mail.

One of the biggest expenses incurred by the Postal Service is delivering the mail to your door or your curb.  It would be a lot cheaper if they just put the mail in a centralized location, like a neighborhood cluster box, and had you go fetch it yourself.

This great new idea for saving money came up in a debate last week on the Laura Ingraham show.  Congressman Dennis Ross (R-FL) and NALC president Fred Rolando were on the show to talk about plight of the Postal Service.  Ross made the usual argument that labor costs are too high and the Internet and email are driving down volumes, while Rolando explained that it was all a manufactured crisis caused by the $5.6 billion a year that Congress requires the Postal Service to pay into its retiree health care fund.

In the course of the debate, Congressman Ross explained that he and his co-sponsor on the House bill, Darrell Issa, did not want to dismantle or privatize the Postal Service.  “We want to save this institution,” said Ross.  “There are many ways we can do this.  We don’t have to cut rural post offices.  We don’t have to reduce the service delivery.”  

Ross even seemed to back off of the plan to eliminate Saturday delivery, although, he noted, “moving from six-to-five day is overwhelmingly favored by the public,” as indicated by a recent NY Times survey.  (12 minutes into the tape)

“But before we go to six-to-five,” suggested Ross, “let’s go from door-to-door to curb.  That will save anywhere from $3.5 to $5 billion a year.  Only 25% of postal recipients receive their mail door-to-door.  The rest of them receive it either in cluster boxes, PO boxes, or at the curb.  That right there is a tremendous savings that I think is a good way to go about it.”

Ross thus put closing post offices and five-day delivery on the back burner and moved the delivery point issue right to the front.  The days of having your mail delivered to your door or even your curb may be coming to an end.  The future is in cluster boxes.

It’s a different version of “the last mile” strategy — that’s when FedEx and UPS don’t want to incur the expense of delivering right to your home, so they hand off the parcel to the Postal Service.  The difference is, with this new “last mile” strategy, it’s the Postal Service who’s doing the hand-off, and guess who’s going to be covering the last stretch of getting the mail to your house? 


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