How the pandemic could lead to a big USPS price hike

How the pandemic could lead to a big USPS price hike

On November 30, 2020, the Postal Regulatory Commission issued a 484-page order revising the rate system for Market Dominant products. Under the new system, the Postal Service will be able to raise rates beyond the Consumer Price Index, which it was prevented from doing (aside from the provision for an exigent increase) by the Postal Accountability and Enhancement Act of 2006. (See this previous post for more about the order.)

Last week, the Postal Service gave the PRC its calculations for the two new authorities crafted by the Commission. The Notice of Calculations of Future Rate Authorities indicates that the density-based rate authority will be 4.5 percent, and the retirement-based rate authority will be 1.06 percent, for a total of 5.56 percent.

Those potential increases are on top of the approximately 1.8 percent increase for First-Class Mail and 1.5 percent increase for other categories the Postal Service has already proposed for 2021. If the Postal Service were to exercise its full rate authority, the total increase would thus be over 7 percent. The new system also gives the Postal Service authority for an additional 2 percent increase for products that don’t cover their attributable costs.

The new rate authorities will take some time to go into effect in a price hike, almost certainly not before summer 2021. And it’s very possible that the Postal Service will not take full advantage of its new authority and instead bank some portion for future use.

The rate authority numbers presented last week are considerably greater than what the Commission had envisioned over the past couple of years as it was developing the formulas for future above-CPI increases. This table from the order shows what the density-based increases would have been in previous years based on the new formula. The average authority for this period would have been about 1.23 percent annually; the highest was the 2013 number, 2.69 percent.  Read More

City of Spanish Fort, AL, appeals closure of its post office

City of Spanish Fort, AL, appeals closure of its post office

By Steve Hutkins

Fairhope Courier, November 15, 1961: “Pulitzer Prize Winning Author Visits Spanish Fort Post Office: Harper Lee, author of the Pulitzer Prize winning novel, To Kill A Mocking Bird, chats with Har­mon Hanson (photo above) while admiring his newly opened post office at Span­ish Fort. Miss Lee is a frequent visitor to this area and was de­lighted with the addition of this facility. Residents too, are singing the praises of this office — Christmas mails will be handled with greater speed. Many have rented post office boxes, finding it is con­venient to receive mails from early morning until night.”

A few weeks ago — nearly sixty years after Harper Lee’s visit — the Postal Service announced it was closing the post office in Spanish Fort, Alabama, effective January 15, 2021. Today the City of Spanish Fort filed an appeal with the Postal Regulatory Commission to stop the closure. The appeal, along with extensive documentation about the case, including bid solicitations and emails, can be found here.

The gist of the appeal is that the Postal Service has not gone through the normal discontinuance procedure required by 39 C.F.R. 241.3, which includes a feasibility study, questionnaires to postal customers, a public meeting, an opportunity to submit comments, access to the administrative record, and the right to appeal to the PRC.

As it has in the past with similar appeals, the Postal Service will soon file a motion to dismiss the appeal, arguing that that the Spanish Fort post office is a contractor-operated unit, not a USPS-operated facility, so the post office is not actually a “Post Office” and the closing is not covered by the regulations that govern discontinuances.

The Commission has dismissed several similar appeals on contract offices over the past decade, and most likely it will follow its own precedents and do so again. The Commission’s position is a slight variation of the Postal Service’s rationale. The Commission says that the discontinuance rules may apply to a contract unit but only if it is the “sole source” of postal services in the community.

That’s clearly the case in Spanish Fort. It’s a city of over 9,000 people, it was incorporated in 1993, it has its own government — and it has only the one post office.

The Commission will probably find a way to dismiss the appeal anyway, perhaps by expanding the geographic range of “community” to include nearby communities that do have post offices, as well as noting that one can always do postal business online.

News of the pending closure was not a complete surprise to residents of Spanish Fort. Elected officials have been trying to keep the post office open since it almost closed in September 2019, when the woman who had run the facility for nearly four decades decided, at age 80, that it was time to retire. Postmaster Hazel Farmer worked for the Postal Service for 42 years, 39 of them at Spanish Fort, and to honor her service, the City proclaimed the day she retired as Hazel Farmer Day.

Spanish Fort, AL Post Office

After Farmer left, the owner of the plaza where the post office is located was able to prevent the closure by agreeing to take over the postal business temporarily until a permanent contract could be arranged. Apparently the parties have not been able to come to an agreement, and last month customers were informed the Spanish Fort post office would be closing.

Some 700 box holders have been told that they will need to switch to street delivery or get a new box at the post office in neighboring Daphne. That’s a 10 or 15 minute drive from Spanish Fort, more during rush hour and tourist season, and the fastest route is U.S. Route 98, aka “Bloody 98” because it’s one of the most dangerous highways in the state. There’s still a chance that a new location will be found for a post office, but it would probably be little more than a kiosk within an existing business. The Postal Service says any new facility will not provide post office boxes.  Read More

PRC busts the price cap, lawsuits sure to follow

PRC busts the price cap, lawsuits sure to follow

By Steve Hutkins

The Postal Regulatory Commission has spent the past four years working on a revision of the rate system for Market Dominant products. Yesterday the Commission issued its final rule on the changes. The order is here. The PRC’s press release is here. The media kit contains a useful FAQ.

The review of the rate system involved the Commission, the Postal Service, and an extensive list of stakeholders and commenters.  And even though this contentious process has been going on since December 2016, it’s not over yet, not by a long shot. Given that many of the mailers have fought the changes that were finally approved, it’s widely expected that some stakeholders will appeal the PRC’s order to the D.C. Circuit.

The Alliance of Nonprofit Mailers has already promised as much. In an article on its website back in February 2020, the ANM wrote that the proposed changes would not achieve the objectives stated in the 2006 Postal Accountability and Enhancement Act and would thus “violate the law.” If the regulator were to approve these proposals in a final rule, wrote the ANM, “many expect multiple stakeholders to appeal it at the U.S. Court of Appeals.  The court could take some time to reach a decision, meaning that mailers could face a year or two of surcharges in 2021 and 2022, before the appeals are resolved.”

We will probably soon hear similar comments from other mailers and industry insiders. Just yesterday, minutes after the order was posted on the PRC website, DeadTreeEdition, a highly respected blog that covers the print business and postal issues, posted a tweet about the new order saying, “If you’re involved in mailing or #printmedia, stay tuned. Big developments are afoot in #USPS pricing. See you in court.”

The new rate system gives the Postal Service significant above-inflation pricing authority over Market Dominant products. Or, as the mailers put it, the new system “busts the price cap.”

At one stage of the proceedings, the Commission considered a simple CPI-plus formula that would have allowed the Postal Service to increase prices by 2 percent on top of the regular CPI increase. In the end, the Commission adopted a different approach. Under the new system, rate increases will be tied to two factors.

The first factor ties the above-CPI authority to changes in mail density, i.e., the number of pieces per delivery point. This aspect of the rate system would address increases in the cost-per-mailpiece that are driven by measured declines in year-over-year density. The second factor ties the above-CPI authority to Congressionally-required amortization payments for retirement health benefit and pension costs. This second factor could become irrelevant if Congress were to pass legislation that modified how the Postal Service deals with these costs.

Yesterday’s order contains a technical appendix with estimates of how these two factors might play out. (These estimates were developed in an earlier PRC order in December 2019.) Here’s a chart showing the hypothetical impacts of the density formula on the first couple of years.

As this chart shows, the density rate authority would be 1.46 percent in the first year, 1.11 percent in the next. (The authority is the lower of the authority based on MD and total mail volume.) Here’s another chart showing what the density rate authority would have been over the past several years:

This chart indicates that for the period 2013 to 2019 the density rate authority would have ranged from 0.36 percent to 2.69 percent.  The average for this period would have been about 1.23 percent annually.

Here’s a chart showing the hypothetical retirement rate authority using the retirement data for the next five years.

As this charts indicates, annual increases range from 0.827 percent to 1.111 percent. The average for this period comes to about 0.937 percent.

If the Postal Service were to exercise its full authority using both factors, rates could be increased by somewhere between 2.17 percent and 3.8 percent above the annual CPI increase. Overall, average annual increases of about 2.5 percent (on top of the CPI increase) appear to be a reasonable estimate.

For some types of mail, the increases would be stiffer. For products considered “non-compensatory,” i.e., the revenue they bring in doesn’t cover their attributable costs, the Postal Service has been granted authority to raise rates an additional 2 percent. In an earlier version of this proposal, the Postal Service would have been required to raise rates 2 percent on these underwater products, but after hearing a lot of negative feedback from the mailers, the Commission decided to make this increase optional. That means the Postal Service could use this authority to raise rates on some non-compensatory products, like Marketing Mail flats, by 2 percent but choose not to do so for other non-compensatory products, like Periodicals, because they have “educational, cultural, scientific, and informational value.”

The Commission punted on several other aspects of a new rate system that it had been considering, including the proposal to tie an above-CPI increase to performance. Instead, the Commission will open a new rule making docket, as the FAQ puts it, “to further study potential modifications to the ratemaking system that link financial incentives and/or consequences to efficiency gains, cost reductions, and the maintenance of service standards.”

In FY2020, Market Dominant products brought in about $40 billion in revenues. If the Postal Service were to take full advantage of its new pricing authority and raise rates by an average of, say, 2.5 percent, it would bring in an additional $1 billion a year, somewhat more if the USPS also exercised its authority to raise non-compensatory products by 2 percent.

It’s also possible, however, that rate hikes will not have this effect. They could drive away business and actually lead to a drop in revenue. According to many of the mailers who filed comments with the Commission, that’s exactly what is going to happen.

As one large group of mailers wrote in comments to the PRC in February 2020, “Ultimately, not only do the Commission’s proposals do nothing to address the root causes of the Postal Service’s financial problems—volume loss and costs that are rising faster than inflation—but they will have the opposite of their intended effect, driving volume from the mail and creating the risk of a death spiral for the Postal Service.” This will be a death spiral, they warn, “of the Commission’s doing.”

The new rate system will go into effect 30 days after it is published in the Federal Register. Stakeholders have 30 days to file an appeal with the D.C. Circuit.

 

Updates on the USPS Service Performance Reports

Updates on the USPS Service Performance Reports

We’re tracking all the reports the Postal Service has been submitting on service performance, the processing of ballots, and other data being shared in the various lawsuits. The Postal Service’s weekly on-time service performance reports submitted in Jones v USPS can be found here. The daily reports being submitted in Richardson, Vote Forward, and NAACP are here. There have also been reports made public by requests via FOIA and the PRC. All the performance reports are here.

November 7, 2020

The Postal Service has submitted its weekly service performance reports in Jones. You can find them here.

The First Class score for the nation as a whole was 81.57 percent, up slightly from the week before, when it was 80.85 percent. Since the week of July 11, when scores dropped due to operational changes, First Class has averaged 84.77 percent. That’s compared to the 92 percent for First Class in FY 2019 and FY 2020 before operational changes went into effect. Here’s a chart showing First Class service performance since the first of the year.

The scores on Election Mail have been significantly better. It will be a couple of weeks before we see the report for the week of the election itself, but here’s a table with the scores through the week of Oct. 24. Note that these are processing scores, not on-time delivery scores, and the numbers only includes scores for mailpieces that have been properly identified by the mailer as election mail, outbound ballots, or inbound ballots and if it adhered to Service Performance Measurement business rules.

November 6, 2020

The Postal Service’s daily reports on service performance, election mail, and late/extra trips (submitted as part of the Joint Order from the courts in Richardson, Vote Forward, and NAACP) can be found here.

One note about these daily reports on election mail. Some news reports are looking at these reports, misinterpreting the data and saying things like this: “The data based on scans of ballot envelopes that were filed in Sulivan’s court Wednesday suggested that in South Florida, just 85.12% of the mail-in ballots were delivered on Election Day….  In central Pennsylvania, just 61.3% of the mail-ballots in the postal system were delivered on time, based on the scan data in the court filing shows. In Philadelphia, slightly more than 66% of the mail-in ballots had been delivered on Election Day. In Atlanta 82.2% percent of the mail-in ballots were delivered on Election Day, the court filing shows.”

The daily numbers being reported do not indicate how much of the mail was delivered on time, i.e., within the service standard of two or three days. These numbers are processing scores, i.e., the percent of the ballots that went through the processing network on time. They don’t encompass the “first mile” (the step between a voter dropping a ballot in the mail and its arrival at a processing center) or the “last mile” (from post office to letter carrier to destination).

The processing scores therefore do not represent the percentage that was delivered on time. It’s possible that some of the mail that was “late” going through the processing system did get delivered on time thanks to the extraordinary measures the Postal Service used to expedite ballot mail. It’s also important to recognize that even the processing scores are not entirely reliable for various reasons, including the fact that some ballots didn’t get an exit scan in the processing system because they went through an expedited process to the election center destination.

The Washington Post has been careful about how it explains the numbers and makes it clear that the numbers are processing scores. For example, one recent article put it this way: “Nearly 7 percent of ballots in U.S. Postal Service sorting facilities on Tuesday were not processed on time for submission to election officials, according to data the agency filed Wednesday in federal court, potentially leaving tens of thousands of ballots caught in the mail system during an especially tight presidential race. The Postal Service reported the timely processing — which includes most mail-handling steps outside of pickup and delivery — of 93.3 percent of ballots on Election Day, its best processing score in several days, but still well below the 97-percent target that postal and voting experts say the agency should hit.”

The Postal Service has been posting weekly reports that do show on time delivery performance, but these reports come out a couple of weeks later. You can find these reports here. The report for the week of Oct. 24 will be added tomorrow. It will take a couple more weeks before we see the service performance numbers for election week.

November 5, 2020

The Postal Service’s daily reports on service performance, election mail, and late/extra trips (submitted as part of the Joint Order from the courts in Richardson, Vote Forward, and NAACP) can be found here.

The Election Mail service performance report shows an inbound ((those being returned by voters to election centers) processing score of  93.20 percent on Nov. 3 and 94.5 percent for Nov. 4, but that shouldn’t be interpreted to mean that 6 or 7 percent of the ballots were late being delivered to election centers. As the Postal Service has explained to the court, these scores aren’t reliable for various reasons. (See this explanatory notice, and the notice that accompanies today’s reports.)

The variance report on Election Mail shows a wide range of scores, but again, one hesitates to make too much of these numbers because of all the reasons cited by the Postal Service.

Service performance on First Class and Marketing Mail shows the daily scores for the past 10 days. The on-time processing score for First Class was unusually low on Nov. 3, 65.37 percent, but back up to 88.87 percent on Nov. 4.  The average score for Oct. 24 – Nov. 4 was 82 percent. That’s about 10 percent below normal.

The Extra trip report shows 831 trips on Nov. 3 and 761 for Nov. 4. The average for the past 34 days has been 804, so those numbers are just about average — but far below the period before operational changes were made in July. The Late trip report shows 2356 trips on Nov. 3 and 2568 for Nov. 4. The average for the past 34 days has been 1930, so those numbers are well above average for the month, but again, far below pre-July.

In response to court order to use Express Mail in certain cases, the Postal Service also filed a report on data concerning the number of ballots received between November 1, 2020 and November 3, 2020 that were put into Express Mail. The report shows about 10,655 ballots were expedited via Express.  Read More

Lawsuits against DeJoy, USPS & Trump over mail delays and election mail

Lawsuits against DeJoy, USPS & Trump over mail delays and election mail

Twelve lawsuits have been filed against Postmaster General DeJoy, the U.S. Postal Service, and President Trump over issues connected to mail delays and threats to voting by mail in the November election. We’re “live blogging” the latest developments on a daily basis. You can find a list of all the cases at the end of this post here, with links to the original complaints and the case numbers on PACER.

We’re reporting on the service performance reports being submitted in several of the cases on a separate updates page, here.  (The Postal Service’s weekly on-time service performance reports submitted in Jones v USPS can be found here. The daily reports being submitted in Richardson, Vote Forward, and NAACP are here. There have also been reports made public by requests via FOIA and the PRC. All the performance reports are here.)

November 6, 2020

As ordered by Judge Sullivan yesterday, the Postal Service has filed two reports early this morning. The first is a summary of information learned from plant managers for the following USPS districts: Greensboro, MidCarolinas, Central Pennsylvania, Western Pennsylvania, and Philadelphia Metropolitan.

The second is a report showing the total number of ballots identified through daily sweeps of processing facilities in states with extended ballot receipt deadlines.

The Postal Service has filed another of its reports explaining districts with low inbound or outbound processing scores. Specifically, “for each USPS District whose Election Mail processing scores for Inbound Ballots were below 90 percent on each of the previous two days or below 80 percent on the previous day, Defendants’ understanding, based on all reasonably available information, of potential explanations for the current level of service and any corrective measures that are now being implemented, as previously required under the Court’s October 30 Order.”

The plaintiffs in Richardson, Vote Forward, and NAACP have filed a notice and proposed order. The proposed order says, “Beginning November 7, 2020, Defendants shall no longer be required to produce daily data on the percentage of on-time deliveries at the Nation, Area, and District level for first class mail and marketing mail, as previously required under the Court’s October 27 Order. Instead, Defendants shall produce this data on a weekly basis.”

The proposed order also modifies other reports the Postal Service had been required to produce. It will no longer be required to produce data on outbound ballots (those sent to voters), and it won’t be required to produce those explanations for processing scores for Inbound Ballots below 90 percent on each of the previous two days.

The order would also ask for “information sufficient to show the absolute number Inbound Ballots covered by the processing score for a given District that had an origination scan in the District, a destination scan in the District, or both. Defendants shall include this data retroactive to November 4.”

The order also states, “Plant managers and district managers jointly overseeing USPS processing facilities that serve Alaska, Illinois, Iowa, Maryland, Mississippi, North Dakota, Ohio, and West Virginia shall coordinate with all local Boards of Elections (the “Local Boards”) in those states to deliver all ballots to the Local Boards before the relevant extended state ballot receipt deadline.”

The notice provides the rationale for the specific requests for information described in the proposed order.

November 5, 2020

Afternoon update: Judge Sullivan presided over another hearing today. One of the questions on the table was how many ballots may have been delivered late or are still in the system and not delivered yet. The Postal Service shared some specific numbers, as reported in a great “live” twitter thread on the hearing by @USPostOffice911.

Looking a ballots without a destination scan, the Postal Service says that in the Central PA district, there are 1524 total, and of these USPS has confidence that 979 were expedited, while 545 require further investigation.  In Greensboro, 3087 total, 1752 expedited, 1335 to investigate. In the Carolina district, 2404 total without destination scans, 1204 confidence they were expedited, 1200 to investigate. In Philadelphia, 2496 total, 1682 expedited, 814 to investigate. The Postal Service said that there is no evidence yet that the ballots in the “investigated” category were not delivered.

In a separate filing, the Postal Service provided a list of the number of ballots that were delivered Express in each district over the three days Nov. 1- Nov. 3. The total appears to be about 10,655.

The plaintiffs have presented two proposed orders, which Judge Sullivans appears to have ordered.

The first states: All USPS processing facilities that serve a state with an extended ballot receipt deadline shall, until that deadline passes, perform a morning ballot sweep (no later than 10 a.m., local time) and a mid-to-late afternoon ballot sweep that is timed to ensure that any identified local ballots can be delivered that day. Upon completing a sweep, each facility shall report to USPS Headquarters the total number of ballots identified and confirm that those ballots have been expedited for delivery to meet applicable extended state deadlines. Beginning on November 5, 2020, and until further order of the Court, Defendants shall promptly submit to Plaintiffs a single report with the total number of ballots identified through daily sweeps, with one exception: for facilities that are located in states whose ballot receipt deadline is that day, Defendants shall submit the results of those sweeps to Plaintiffs immediately following its receipt of the results of the second sweep at these facilities.

The second proposed order states:

1. On November 5, 2020 and November 6, 2020, Defendants shall file before the Court the equivalent information presented in “Defendants’ Summary of Information Learned from Plant Managers” (ECF No. 78) for the following United States Postal Service (USPS) districts: Greensboro, Mid-Carolinas, Central Pennsylvania, Western Pennsylvania, and Philadelphia Metropolitan.

2. Plant managers and district managers jointly overseeing USPS facilities in Greensboro, Mid-Carolinas, Central Pennsylvania, Western Pennsylvania, and Philadelphia Metropolitan shall coordinate with all local county Boards of Elections in North Carolina or Pennsylvania (the “Local Board”) to deliver all ballots to the Local Board before 5:00 PM local time in North Carolina or Pennsylvania on November 6, 2020. Such arrangements shall include, at a minimum, the following:

a. USPS employees of each facility shall be directed to undertake a sweep of the facility on the morning and again on the afternoon of November 6 to identify any inbound ballots postmarked on or before November 3.

b. The afternoon sweep should be conducted at a time sufficient for the ballots to be delivered to the Local Board for receipt by 5:00 PM local time on November 6, 2020.

c. Plant managers and district managers may implement a hub-and-spoke plan for each county, to the extent that such plan would assist timely delivery of the ballots to the Local Board.

3. No later than 5:00 PM EST today, Defendants shall file before the Court details of the arrangements adopted pursuant to Paragraph 2 of this Order by each USPS district and, to the extent facilities within each USPS district adopt different plans, by each USPS facility.

Morning update: The big news to come out of yesterday’s hearing in NAACP-Richardson-Vote-Forward was, of course, Judge Sullivan’s expression of displeasure with the Postal Service’s failure to follow his order of Nov. 3. It immediately made headlines like these:

Most of yesterday’s hearing was considerably less dramatic than the headlines suggest. A lot of it was an in-the-weeds discussion about how the processing plants were handling ballots, conducting sweeps, etc. The hearing focused largely on the testimony of Kevin Bray, the USPS executive lead for mail processing in the 2020 elections. He also submitted a written declaration. Daniel Brubaker, a member of the Postal Service Inspection Service, submitted a declaration as well.

The Postal Service also filed a response to the court’s Nov. 3 order, which provides a narrative of the actions of the Postal Inspection Service on election day, the sweeps of processing plants that took place, and an explanation of why the Postal Service was not able to comply entirely with the court’s order. In addition, the Postal Service filed a summary of information learned from plant managers as required by the court’s order on Nov. 3.

For more about the hearing and where things stand, check out these articles:

Read More

Stop girdling the Post Office

Stop girdling the Post Office

By Mark Jamison

In forestry the practice of tree girdling is well known. Although there are some circumstances where this can be a useful practice, in most cases the technique is used for nefarious ends. Girdling involves removing the bark and layers below the bark, usually around the trunk of the tree. The cut, when it includes the entire circumference of the tree, makes it impossible for the tree to heal itself and everything above the cut will eventually die. In forests where logging is limited to dying or diseased trees, loggers will girdle healthy trees to kill them and make them available for harvest.

For at least the last fifty years, the right wing has been girdling the post office and the postal network in the hope of undermining its health and thereby reaping a financial harvest. The very people who have been charged with caring for and sustaining the Postal Service have instead repeatedly cut services, saddled the institution with requirements that undermine its ability to function, and denigrated the value of the network.

Louis DeJoy and Robert Duncan are the latest in the long line of postal girdlers. But they have taken their game to a higher level and for what are clearly political reasons. Both are products of the president that appointed them and both evidence their benefactor’s outright mendacity. They have made it clear that regardless of the law, public necessity, or public opinion, their goal is to cut postal operations. The recent OIG report reviewed here at STPO  demonstrates that clearly.

DeJoy and Duncan are political men doing political deeds. Both have engaged in major fundraising for the Republican Party and both have been active and vocal in partisan politics. That their deeds in their current positions as Postmaster General and chairman of the postal Board of Governors are political should be obvious to anyone with even a scintilla of common sense.

But to borrow from Shakespeare, I come not to criticize DeJoy and Duncan but to bury them. Having chosen to serve political goals rather than the American public during a national crisis, they have proven themselves unfit. They lack the competence and foresight required to administer an essential national infrastructure. They have to go.  Read More

DeJoy’s 57 Varieties of Cost Cutting: What’s in the new OIG report—and what’s not?

DeJoy's 57 Varieties of Cost Cutting: What's in the new OIG report—and what's not?

By Steve Hutkins

In response to several inquiries from members of Congress, the Office of Inspector General has issued a report  on “Operational Changes to Mail Delivery.” The report discusses the Postal Service’s plan to eliminate 64 million work hours — the equivalent of 33,000 jobs — by implementing 57 cost-cutting initiatives. As discussed in this previous post, the plan represents one of the largest downsizing efforts in the 50-year history of the Postal Service.

These 57 “Do It Now FY Strategies” include restrictions on overtime, late and extra trips from processing centers, and all the other cost-cutting measures that have caused the delivery delays we’ve seen since July. They also include numerous other changes to postal operations that have not received much, if any, attention.

The report criticizes postal leadership on several counts. First, the Postal Service “did not complete a study or analysis of the impact the changes would make on mail service prior to implementation.” Second, “documentation and guidance to the field for these strategies was very limited and almost exclusively oral.” That caused “confusion and inconsistency” and “compounded the significant negative service impacts across the country.”

The IG also criticizes management for a third major failing: The Postal Service did not “fully respond” to questions and document requests from Congress and did not share information about the plan beyond what the Postmaster General was specifically asked in his testimony before the House and Senate.

As a result, Congress was not informed of the existence of the Work Hour Reduction Plan and the “Do It Now FY Strategies” before or during the Postmaster General’s testimony to Congress. The plan is not mentioned at all in Senator Gary Peters “Failure to Deliver” report or his update report. It’s very likely that Congress has yet to receive a full accounting of the plan.

The most complete picture of the “Do It Now FY Strategies” comes from three PowerPoint presentations that became public as part of lawsuits against the Postal Service over the mail delays. One appeared in the Washington Post a few weeks ago as part of Pennsylvania v DeJoy, and the others were submitted as exhibits in the case of New York v Trump on October 19, 2020 — the same day that the OIG report was released.

These presentations were given at meetings between executives at headquarters and the Area Vice Presidents on June 26, July 7, and July 10. The slides go through each element of the plan and cover nearly all of the 57 strategies listed in the OIG report, but in much more detail. (You can find the three presentations merged together at the end of this post, along with a table showing the 57 strategies as they appear in the appendix of the OIG report, with links to the corresponding slide in the presentations.)

There are some crucial details in these presentations that suggest the Postal Service not only failed to provide Congress with a full picture of the plan. It may have also failed to provide the OIG with the whole story. How else to explain the following?  Read More

Are USPS transportation policies still causing mail delays?

Are USPS transportation policies still causing mail delays?

This week there have been several significant revelations about the operational changes that took place over the summer, their impact on service performance, and the Postal Service’s plan to eliminate 64 million work hours.

  • According to an OIG report released yesterday, the Postal Service embarked on this plan — which involves 57 strategies to transform every aspect of postal operations — without doing any analysis of the potential service impacts. Plus, “documentation and guidance to the field for these strategies was very limited and almost exclusively oral. The resulting confusion and inconsistency in operations at postal facilities compounded the significant negative service impacts across the country.”
  • The OIG concurred with the Postal Service’s position that an advisory opinion by the Postal Regulatory Commission was not required before making these operational changes, but it acknowledges that “upcoming court decisions could change this analysis.” Indeed, federal judges in four cases – Washington v TrumpNew York v USPS, Pennsylvania v DeJoy, NAACP v USPS— have ruled that an advisory opinion should have been requested.
  • In August, the Postmaster General told the Senate that the removal of collection boxes, which caused widespread concern over the summer, was “a normal process that has been around 50 years” and that over the past decade, about 3,500 have been removed annually. According to a June 26, 2020, presentation given by Headquarters (submitted as an exhibit in New York), the Postal Service has a “collection box optimization” plan to remove over 7,400 boxes each quarter during FY 2021, for a total of 29,618 removals in a single year. It’s not clear why the Postmaster General didn’t mention this to Congress.
  • As over 700 sorting machines were being removed from processing plants, the Postmaster General told Congress that the Postal Service was simply eliminating under-utilized machines and making room for all the packages, but a July 7th teleconference cites another reason: cutting down on work hours would “Reduce 1658 full time equivalent employees.” The Postmaster General didn’t tell this to Congress.
  • When West Virginia Senator Joe Manchin contacted the Postal Service this summer about reports that signs were going up at post offices with new, reduced hours of operation, he was told that the signs were incorrectly posted because of a “misunderstanding” between District officials and local postmasters. But in the July 7th teleconference, at which the Postmaster General gave remarks, postal leadership said it plans to “align retail hours/operations to customer demand” by reducing full window service hours at 12,000 post offices. It’s not clear why the Postmaster General didn’t tell this to Congress.
  • According to an excellent article in yesterday’s Washington Post, the on-time service performance is “most erratic” in key swing states, making them more vulnerable to mail slowdowns and endangering millions of votes in states with firm ballot deadlines. The article has some great maps based on service performance reports the Postal Service has made public in response to the court’s ruling in Jones v DeJoy, which can be found here.
  • And one final revelation: The Postal Service is still putting restrictions on late and extra trips from processing centers, and the number of such trips is way below normal. This may be the main reason service performance continues to suffer.

There’s a lot to unpack in all the court documents, WaPo article and OIG report, but for now, let’s focus on the issue of transportation policy.  Read More