Village Post Office


Village Post Offices, part 2: More debut, more questions too

Nov. 10, 2014

In a previous post, "It takes a Village Post Office, but for what?" we questioned the financial rationale for VPOs and asked why many of them were now being placed in densely populated areas.  Now there’s more reason to pose such questions.

A couple of days ago, an article in The Press Democrat touted the "debut" of some new Village Post Offices in Sonoma County, north of San Francisco.  A couple of them are right in the heart of Santa Rosa, where there are seven or eight post offices, all of them operating at regular hours, some with Saturday hours as well.  This map of Santa Rosa shows VPOs in red and the nearby post offices in blue.

The Postal Service has been putting VPOs in other urban areas, and California seems to be a popular location.  Nearly a third of the 74 VPOs created in August and September 2014 were in California.  In San Diego, where there about 25 or 30 post offices, the Postal Service has set up a half dozen VPOs. In Sacramento, there are now five VPOs, surrounded by 16 real post offices, as you can see on this map.

It takes a Village Post Office, but for what?

November 2, 2014

Almost every day over the past year, there’s been a ribbon-cutting ceremony to celebrate the opening of a new Village Post Office.  There are hundreds of stories in local newspapers about these grand openings.  The Postal Service clearly thinks that Village Post Offices play an important role in its vision of the future.  But it’s not exactly clear what function they really serve.

Just this past week, the Postal Service opened a Village Post Office in the Creekside Market and Grill in Miracle, Kentucky; the Summit Mart convenience store in Mount Summit, Indiana; Ferrante Upholstering in New Beaver, Pennsylvania; and Knoll Brothers Retail (also a convenience store) in Kingsford Heights, Indiana.

At this point, there are over 760 VPOs in operation.  Nearly all of them just sell stamps and give out flat-rate boxes.  Despite the name, they're not really “post offices."  The Postal Service chose to call them that because they were originally intended to replace real post offices.  The Postal Service wanted small town communities to feel that while they might be losing their post office, they would be getting a good-old-fashioned “Village Post Office” instead.  There would still be a warm place in town to meet and greet the neighbors.

Now the Postal Service says that VPOs are not intended to replace post offices.  Rather, they provide some added convenience to customers who can’t get to the post office when it’s open — a common problem now that POStPlan has reduced hours at nearly 13,000 post offices.

But one can’t help but wonder if the Postal Service doesn’t have some other motive besides “customer convenience.”  After all, if customer convenience were really a priority, why reduce post office hours for 13,000 communities?  And what about customer convenience in the more than 12,000 communities that aren’t getting a VPO to supplement the reduced hours at the post office? 

The VPO program is actually about something other than customer convenience.  It’s part of the Postal Service's effort to redirect retail traffic from brick-and-mortar post offices to "alternate channels."  These include USPS.com, stamps-on-consignment (at over 50,000 pharmacies, banks, and retailers), and pack-and-ship stores in the Approved Shippers program — like the 1,500 Staples stores where the Postal Service will soon be found and the 2,000 Walmarts that will soon have a Goin Postal shipping store that sells USPS products. 

By bringing in more business through alternate channels and less business at post offices, the Postal Service can cut window hours and save some money.  That translates into fewer union-wage jobs for postal clerks.  Plus, with customers getting more accustomed to doing postal business at private retailers, it will also be easier for the Postal Service to close post offices when the time is right.  Ultimately, directing customers to Staples, Walmart, or a VPO represents another a step in the privatization of the retail network.     

That this is the Postal Service’s goal becomes clearer when you look at the economics of VPOs, where they’re being located, and how the rationale for them has evolved.

The Postal Service shares some lists: Closures, Suspensions, VPOs, CPUs, and Retail Channels

January 18, 2013

Yesterday the Postal Service provided the Postal Regulatory Commission with some lists and other material for the annual compliance report.  They include the post offices that were closed and suspended during fiscal year 2012 (October 1, 2011 to September 30, 2012), as well as information about retail revenue sources and Contract Postal Units (CPUs) and Village Post Offices (VPOs).

You can download the lists from the PRC website here.  To make access simpler, we’ve posted the lists on Google Docs, where you can see them in the original spreadsheet form but also as tables and maps.

Post Offices Closed in FY 2012
Post Offices Suspended during FY 2012
VPOs in operation as of 9/30/2012
CPUs and CPOs at end of FY 2012

 

Retail Revenue Channels

The Postal Service has provided a table that shows the sources for retail revenues.  Because the big mailers are not considered “retail," the retail revenues account for only a portion of the agency’s total revenues — about $17 billion out of $65 billion.  The big mailers take their mail to pre-sort companies or directly to USPS Bulk Mail Entry Units.  “Retail” therefore applies to the average customer — individuals, small businesses, etc.

The following table indicates the “channels” through which the Postal Service takes in its retail revenues.

Channel
FY2012 Revenue (in $ millions)
Share of Total Retail Revenue
Change from FY2011
Post Offices (WIR)
$10,627
60.9%
-3.6%
PC Postage
$3,604
20.7%
4.1%
Stamps Only Sales by Retail Partners
$1,226
7.0%
0.2%
Automated Postal Centers (kiosks)
$497
2.9%
-0.4%
Stamps by Mail/Phone/Fax
$517
3.0%
0.0%
Contract Postal Units
$376
2.2%
-0.4%
Click-N-Ship
$484
2.8%
0.1%
Other
$119
0.7%
0.1%
Total Retail Revenue
$17,450
100.0%
2.9%
 

The Postal Service likes to say that people aren’t using the traditional brick-and-mortar post office like they used to, but the traditional post office continues to be the main source of retail revenue.  As the table shows, while post office retail is down 3.6% since last year, post offices still account for over 60% of retail revenues

The only significant source of retail revenues aside from the post office is PC Postage, which refers to vendors and authorized providers who print their own shipping and postage labels, such as Click-N-Ship, PayPal Ship Now, eBay's Shipping Label, and Dymo Stamps.  Retail revenues from PC Postage have naturally increased along with the rise of e-commerce — and thanks to promotional efforts by the Postal Service.

Stamp sales by retail partners account for a mere 7 percent of retail revenues.  That’s despite the fact that there are about 32,000 post offices (not including contract units) and over 63,000 retail partners.  Plus, revenues from those partners are virtually flat since last year, with an insignificant increase of 0.2 percent — despite all the effort the Postal Service has put into its USPS Everywhere campaign. 

In fact, now when you go to the USPS “find locations” page, the default for “location types” is not post offices, but “post offices and approved postal providers.”  The Postal Service is doing everything it can to encourage customers to look for alternatives to its network of post offices.

It will be interesting to see how post offices revenues fare over the next couple of years as hours are reduced at 13,000 small rural post offices and larger urban offices are relocated to inconveniently located annexes.  

 

The New York Times Editorial: How many things can you get wrong in 300 words?

November 25, 2011

The New York Times welcomes the holiday season with a 300-word editorial entitled “Overhauling the Post Office for the 21ST Century.”  The piece gets so many things wrong that it would be laughable if it weren’t so maddening.  It’s really the Times’ editorial staff that ought to overhauled.

 

On five-day delivery

First, the Times calls the request from management to end Saturday delivery “reasonable,” and says it would save $3 billion a year.  But the Postal Regulatory Commission — the agency responsible for regulating the Postal Service — took up the issue of five-day delivery in an Advisory Opinion issued in March 2011.  Based on data provided by the Postal Service, the PRC found that the cost savings would be far less than the Postal Service claimed — more on the order of $1.7 billion.  (The Postal Service never challenged the PRC's analysis.)

More important — and the Times says nothing about this — the PRC found that eliminating Saturday delivery would have many adverse effects.  It’s not just about the inconvenience of not getting your mail on Saturday.   Cutting Saturday delivery would also cause 25% of First Class and Priority mail to be delayed two days.

Add that delay to yet further delays caused by consolidation of 500 mail processing plants down to 135 facilities (120 P&DC's and 15 hubs) — a plan now being implemented — and delivery times will slow down even more.  If you’re used to seeing your mail delivered in one or two days, think three or four, or more.  Eliminating Saturday delivery would also hurt some people more than others, like people in rural areas and small businesses, or people waiting for medicine or perishable matter.

Given all the problems with cutting Saturday delivery, you have to ask, who's behind it?  In the PRC Advisory Opinion, one of the main advocates was Valpak, the direct mail company that sends you the blue envelope filled with coupons.  And why would they back five-day delivery?  Simple.  Anything that keeps the Postal Service's costs down also keeps postage rates down.  Valpak and many others in the bulk mail industry don't care if you get their mailings on Saturday or Tuesday or whenever, so long as the rates they pay are as low as possible.  Apparently the New York Times doesn't care when you get its newspapers delivered either.

 

On Village Post Offices

The Times goes on to say, “Congress needs to produce a bill that allows the Saturday shutdown as well as the closure of up to 3,700 local post offices where service would be continued through automated outlets at neighborhood businesses.”

It’s hard to imagine where the Times got the idea that the Postal Service wants to replace 3,700 post offices with “automated outlets at neighborhood businesses.”  The Times must be referring to the “Village Post Office” concept — the Postal Service’s plan to contract with a local business so it can provide basic postal services.  But this concept has nothing to do with automation.  It’s not about putting an “automated postal center” or postal kiosk in a business. 

Rather, the Village Post Office is about allowing a local business to sell stamps and flat-rate boxes.  And that is all a Village Post Office can do.  The folks working in the local business cannot weigh packages, do registered or express mail, sell money orders, or any of the other things a post office does.  In other words, a Village Post Office is not a post office at all.  It’s just a place to buy stamps.

The idea for the Village Post Office was released last August amidst much ballyhoo about what a great new “concept” it was.  It would save the Postal Service money and help a local business bring in new revenue.  (The business is paid a couple of thousand dollars per year but makes no money on the stamps or flat-rate boxes.)  Supposedly people coming in for stamps would buy something else.  Forget about the fact that in a small town, people are going into that local business anyway.

Grand as it all sounded, the Village Post Office idea ran into a little trouble, and so far, some four months later, the Postal Service has established just five VPOs.  Turns out a large number of the 3,700 communities where the Postal Service planned to locate a VPO didn’t even have a business where you could put one.  The Postmaster General has recently backed off the concept and said he needed to find an alternative to this alternative.  

(It’s possible the Postal Service has leaked to the Times that its newest concept is to put 3,700 automated kiosks in local businesses, but if that’s the case, the Times has buried a terrific scoop inside a silly editorial.)

 

On post office closings

The Times also makes it seem like the Postmaster General is interested in closing only 3,700 post offices.  That is the number of offices on the Retail Access Optimization Initiative (RAOI), the plan released in July that is now being reviewed by the PRC, as it's being implemented by the Postal Service.  (Actually, the original number was 3,650, and about 200 have already been removed from the list.) 

However, far more than 3,700 post offices are going to close.  In a recent article in Time.com, the Postmaster General is quoted as saying, “We'll probably look at 15,000 post offices rather than just 3,700.”  That’s half the country’s post offices.

And it’s not as if the Postal Service is waiting on the PRC’s Advisory Opinion or new legislation to get the process started.  A few days ago, the Postmaster General told the National Press Club that the Postal Service had closed 500 post offices this year.  At least a hundred more have received a “Final Determination” notice saying they would close in 60 days.  There’s a temporary suspension on closures until January 3rd, but those post offices will close soon after the New Year.

While many of the closures have been reported in the local news, there’s been little attention in the national media to these closings.  The Postal Service has not even produced a list of the closings.  In Great Britain, where they have closed over 7,000 post offices over the past few years, there’s a phenomenon called “the secret closure programme” — closings that happen “quietly,” under the radar of the media.  The same thing is happening here.

The cost savings from closing post offices is surprisingly small.  The Postal Service says closing the 3,650 offices on the RAOI list would save $200 million a year — about 0.3% of its annual budget — and even that estimate may be inflated.  As we’ve seen in the appeals on closings that communities have brought to the PRC, the amount of savings for closing an individual office is consistently inflated by the Postal Service, and several closing decisions have been questioned by the Commissioners for precisely that reason.

Now, closing 15,000 post offices might realize more significant savings, perhaps over a billion dollars a year.  But at what cost, and at whose expense? 

Think about all the extra driving closing half our post offices would cause, all the fuel consumption, pollution, and gas money and extra time each person would need to spend on postal matters.  Think about the harm to small businesses that go to the post office once or twice a day.  Think about all the people who walk to the post office, like seniors or people who don’t have a car, who won’t be able to get to a post office at all.  Think about the communities — small rural towns, inner-city neighborhoods, and suburbs too — that will lose an important social and economic hub.  For many towns, the post office is a nexus of its identity — close the post office, take away the zip code, and the place isn’t a place anymore.

 

On the legislation

The Times editorial also refers to the House bill, legislation crafted by Tea Party congressmen Darrell Issa and Dennis Ross on behalf of the right-wing, anti-government, anti-union 1% in this country — people like the billionaire Koch brothers, who are large campaign contributors to Issa and Ross and whose Cato Institute has been cranking out studies advocating the privatization of the post office for years.

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On Privatization

Good Reading on Postal Privatization

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

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Organizing to Save Rural Post Offices


A Community Organizing Toolkit

Revised November 2012

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