By Steve Hutkins
A couple of weeks ago, I wrote a post exploring the possibility that Postal Headquarters has a large-scale, comprehensive plan to eliminate some 67 million work hours. (The Seven Percent Solution: The Not-So-Secret Plan to Downsize the Postal Service.) Thanks to evidence that has come out in the eleven lawsuits against the Postal Service over delivery delays and election mail, we’ve learned that the work hour reduction plan is very real.
The following timeline shows how the plan was shared inside the Postal Service while it was kept secret from everyone else. Most of the details come from the “Determination of Fact” section in Judge Gerald A. McHugh’s ruling in Pennsylvania v DeJoy (Sept. 28, 2020) and Senator Gary Peter’s Failure to Deliver: Harm Caused by U.S. Postmaster General DeJoy’s Changes to Postal Service Mail Delivery, prepared by the HSGAC Minority Staff.On May 6, 2020, the USPS Board of Governors selected Louis DeJoy to be the next Postmaster General, and on June 15, he began his tenure as the 75th Postmaster General of the United States.
On June 26, David E. Williams, Executive Vice President and the Chief Logistics & Processing Operations Officer, presided over a conference call that included other members of Headquarters and the Area Vice Presidents (AVPs). At the meeting, Williams gave a slide presentation that covered workhour reductions in mail processing, delivery, and retail services. One slide read: “Work Hour Reduction Target, Do It Now.”
The presentation said that the Postal Service would be reducing work hours by requiring letter carriers to adhere to start times and leave on time. Letter carrier supervisors would be required to get higher-level approval for carriers to exceed 8 hours a day or 40 hours a week. The presentation also said leadership sought to “zero out penalty overtime” and “minimize use of pre-tour OT” and standby OT for employees involved in mail processing of letters and flats.
The presentation indicated that changes with respect to penalty overtime would be implemented as of July 4, 2020. Control of overtime for mail processing supervisors would be implemented in the period from July 11, 2020 to July 17, 2020.
On July 7, Williams led another teleconference with the AVPs, and leadership reiterated the messages of the June 26th meeting: Letter carriers should leave on time, rural carrier should return on time, and so on. One presentation included a topline message: “64 Million Work Hours” and “T-86. Days.”
While the message may have been going around for days or weeks before, this is the first known indication that Headquarters had a goal to eliminate 64 million work hours, The “T-86” refers to the 86 days between July 7 and October 1, the first day of Fiscal Year 2021 — the target date for accomplishing the work hour reductions. (That would be today.) (Correction: An OIG report, released on Oct. 20, 2020, says the plan was “designed to save an estimated 64 million workhours in FY 2021. Executives noted that these strategies needed to be started in FY 2020 to achieve the FY 2021 targets.”)
One of the members of Headquarters at the meeting was Robert Cintron, Vice President of Logistics. In his testimony in Pennsylvania v DeJoy, Cintron said Postmaster DeJoy attended the July 7 teleconference to deliver general remarks for 15 minutes. It’s not clear if the PMG remained on the call while the workhour reduction plan was presented. (It’s difficult to say much about DeJoy’s whereabouts during this timeline because he won’t turn over his calendars; Government Oversight is suing for them.)
Also at this July 7 teleconference, Angela Curtis, who then served as Acting Vice President for Eastern Area Operations and is now Vice President of Retail and Post Office Operations, gave a presentation on new, reduced overtime targets regarding the manual distribution of mail to carrier routes. The Plan would cut city carrier hours by having carriers leave for their routes with mail left behind and limiting them to 8-hour days without higher approval.
Curtis also noted that overtime in post offices would be limited. The overtime utilization rate for clerks would be cut from 16 percent to 12 percent, and pre-tour overtime would be eliminated. The Plan, as we soon saw, would also eliminate work hours in post offices by reducing window hours by closing for lunch, earlier in the day, and on Saturdays, as well as closing many post offices completely. And these are just the parts of the plan we know about.
On July 9, postal executive Otis Smith emailed Cintron to say that Postmaster DeJoy “was requesting a draft of the business plan for review.” Smith directed Cintron to provide preliminary financial estimates for “elimination of extra trips and change service standards to enable use of the most efficient transportation.”On July 10, another teleconference took place with members of Headquarters and the AVPs. At this meeting, Williams gave another version of the work hour reduction presentation.
In his order on Jones v USPS, Judge Victor Marrero says that DeJoy participated in this July 10 teleconference. I can’t find anything in the published documents on PACER to support that, but there may be additional courtroom documents not available online.
This July 10 meeting was later the subject of a report by the Washington Post, which also published Williams’ PowerPoint presentation. It was among the documents turned over to the office of Pennsylvania Attorney General Josh Shapiro as part of Pennsylvania v DeJoy.
In a statement to the The Post, Williams said the July 10th presentation was meant to be “motivational” and encourage greater efficiency and accountability — not set new policy. Indeed, 10 of the 14 slides say things like “Belief that it is achievable and we can make it so,” “all in vs opt in,” “be purpose driven instead of fear driven,” and “overcome our resistance.” These slides suggest that the new Work Hour Reduction plan represented a big ask for management.
The Post focused on three other slides in the presentation, which were about changes in transportation policy. One slide said, “No Extra Transportation / No Late Transportation.” Another directed management to have an AVP ratify any extra or late trips, and the AVPs were directed to notify Williams about such trips on a daily basis. The directives, wrote The Post, stood “in contrast with agency accounts that lower-tier leaders outside USPS headquarters were mainly responsible for the controversial protocols.”
The Post doesn’t say anything about the first slide, but it’s the most important one in the presentation:
This slide makes it abundantly clear that the goal was to reduce 64 million work hours. As of July 10, the target date for reaching this goal, October 1, 2020, was now just 83 days away. (Note the correction: The plan was “designed to save an estimated 64 million workhours in FY 2021. Executives noted that these strategies needed to be started in FY 2020 to achieve the FY 2021 targets.”)
To reach the goal, postal leaders initiated the Work Hour Reduction plan by focusing on transportation. This is “The First Test” in Williams’ presentation. It involved cutting mail processing work hours by mandating no late trips and no extra trips. (Work hour reductions in the plants would also be facilitated by the removal of over 700 sorting machines.)
Cutting 64 million work hours would save about $3 billion in labor costs. That equates to about 33,000 jobs. It may be the largest cost-cutting operation ever attempted by the Postal Service.
“The aggressive cost-cutting maneuvers” being planned by DeJoy and the Board of Governors, reported the Washington Post, “would represent the biggest reshaping of the agency in generations and would likely draw severe criticism from people and organizations that rely on the mail service for timely delivery, particularly in less populated regions of the country.”
Eliminating 64 million work hours represents a cut of 5.5 percent of total work hours, and probably about 7 percent of the work hours for mail processing, city delivery, and retail operations. That may not seem like much, but making any significant cuts to work hours is difficult, even with falling mail volumes, because the number of delivery points is always increasing.
The USPS FY 2020 Integrated Financial Plan anticipated that 2020 work hours would be approximately 16 million lower than in 2019. As of August 2020, eleven months into FY 2020, work hours had been reduced by only 3.3 million (0.3 percent). Looking at the past decade, total work hours in 2019 were 1.17 billion — just 9.7 million (0.8 percent) less than in 2010.
Even Carvin Marvin had a hard time cutting work hours. In 1992, Postmaster General Marvin Runyon eliminated 23,000 management jobs. On one single day, he let go of more than 7,000 employees. But mail volumes were growing rapidly in those years, and the total size of the Postal Service’s workforce remained about the same throughout his tenure.
Every other significant change in postal operations has gone through the advisory opinion process conducted by the Postal Regulatory Commission, which involves technical analysis of every aspect of the proposed plan, close scrutiny of the cost-saving estimates, and an opportunity for comment by stakeholders and the general public. Here are the main plans that have gone through this process. As the table shows, none of these plans even approached cutting work hours by 64 million.
After being extensively studied by the PRC, the plan to move to five-day delivery was dropped. The SBOC plan went from closing over 759 stations and branches to closing about 162, some of which are still open. The RAOI plan to close 3700 post offices was dropped and replaced by POStPlan, which reduced hours at 11,000 small post offices; the projected savings ended up about $100 million a year less than projected (because many postmasters were replaced by career clerks rather than lower-paid non-career employees). The work hour reduction estimate on the Network Rationalization plan, which consolidated processing plants, is based on actual work hour numbers rather than the optimistic projections the USPS began with. (A more detailed table of what was involved with each advisory opinion is here.)
One lesson of these past efforts is that cost cutting must be done carefully and methodically or it can lead to all sorts of problems, like the public backlash over post office closings in 2010-2011 and the problems of delayed mail that happened in 2014-2015 as a result of plant consolidations.
That’s probably one reason why each of these previous plans impacted only one area of postal operations — mail processing, delivery, or post offices. The Work Hour Reduction plan involves drastic cuts to all of them, simultaneously.
While the other plans were reviewed for several months by the PRC, the Postal Service wanted to implement the Work Hour Reduction plan with no PRC review at all. In fact, postal leadership apparently chose not to share the plan with any of the key stakeholders, such as the unions, business groups, big customers, and the contracting partners of the Postal Service.
It took three years to implement Network Rationalization and almost that long to do POStPlan, yet the Postal Service committed itself to implementing the Work Hour Reduction Plan in less than three months. (Correction: As noted above, an OIG report, released on Oct. 20, 2020, says the plan was “designed to save an estimated 64 million workhours in FY 2021. Executives noted that these strategies needed to be started in FY 2020 to achieve the FY 2021 targets.” In other words, the plan would be implemented over the course of 15 months, not three.)
Plus, postal executives wanted to accomplish the immense task of cutting 64 million work hours now — “DO IT NOW,” Williams told his team on June 26 — in the middle of a pandemic that was putting unprecedented stress on the workforce and in the run-up to an election in which the Postal Service may need to deliver half the votes.
And on top of it all, management hoped to pull off this scheme under the leadership of a Board of Governors consisting of six men, all appointed by President Trump, who had never worked for the Postal Service and a Postmaster General who not only had never worked for the Postal Service but who had been on the job just a few days.
What could possibly go wrong?On July 10, probably soon after the teleconference in which Williams gave the “64M T-83” presentation, Shaun Mossman, at the time the AVP for the Southern Area, wrote out a Mandatory Standup Talk entitled “Pivoting For Our Future.” The Talk was based on what was said at the meetings on June 26, July 7, and July 10. It focused primarily on the new transportation policies: all trips would depart on time; late trips would no longer authorized; carriers must leave for the street on time and return on time; and so on. The talk acknowledged that “one aspect of these changes that may be difficult for employees is that — temporarily — we may see mail left behind.”
On July 11, Cintron, the Logistics VP, wrote out additional guidelines about the transportation policies in order to clarify instructions to the AVPs. While not explicitly banning late or extra trips, his guidelines mirrored Headquarters’ emphasis on sharply restricting approval for these trips. Cintron would later testify in Jones v USPS that his department had spent the previous two years emphasizing the need to adhere to transportation schedules. “Postmaster General DeJoy,” he said, “was not involved with the development, planning, or implementation of these guidelines.”
On July 13, another internal USPS document surfaced on Postalnews.com. It’s entitled “PMG’s Expectations and Plan.” Testimony later revealed that it came out of the Northern Ohio District. This presentation included more details about the new work hour reduction plan: overtime was being eliminated; if plants run late, they’ll keep mail for the next day; carrier routes will have no more than four park points, and so on.
On July 13 and 14 and the days following, internal emails show that the messages contained within the “Pivoting For Our Future” and the “PMGs Expectations and Plan” were broadly disseminated around the Postal Service.
On July 14 and 15, a different Standup Talk appeared in PostalNews.com and Postal Times. There are four known versions of this Talk. They each indicate a specific number of work hours that will be reduced in each District in each area of postal operations — mail processing, city delivery, retail operations. These Talks were the basis of the sleuthing in “The Seven Percent Solution,” which explored the hypothesis that there was a not-so-secret plan to cut work hours in each area of operations by 7 percent, for a total of about 67 million work hours.
On July 16, the Postal Service initiated the Expedited Street/Afternoon Sortation test in 384 post offices, which imposed new scheduling limits for sorting and delivering mail. The National Association of Letter Carriers filed a national grievance against this policy, and the test was terminated effective August 19, 2020.
On July 17, Senator Gary Peters, Ranking Member of the Senate Committee on Homeland Security and Governmental Affairs, wrote to the Postmaster General and asked him to explain the recently published “Pivoting for Our Future” and “PMGs Expectations and Plan” indicating that USPS was undertaking major operational changes. Peters asked the Postmaster General to provide a list of every change being implemented nationwide, with a justification for each.
On July 22, USPS General Counsel Thomas Marshall responded to Senator Peters, stating that neither “Pivoting for Our Future” nor the “PMGs Expectations and Plan” originated from Postal Service Headquarters and that “the documents should not be treated as official statements of Postal Service policy.”
Angela Curtis, VP of Retail and Post Office Operations, would take this same line in the affidavit she submitted in Jones v USPS on September 9. Curtis, who was present on the July 10 teleconference, testified that “these documents purport to discuss issues relating to late and extra truck trips, overtime park points, and other topics. These documents were prepared by local managers and were not reviewed or approved by Headquarters. They were distributed locally, not nationally. They do not represent official Postal Service guidance or direction.”
The statements by Marshall and Curtis do not square with the presentations given at those teleconferences between Headquarters and the AVPs, which clearly show top postal leaders were giving directives similar to those in these other documents.
In his July 22 letter to Peters, Marshall also stated that the Postal Service was “aware of our legal obligations to request an advisory opinion” before implementing changes on a nationwide basis, but, he affirmed, “None of the operational efforts discussed here constitute such a change.”
Marshall’s letter did not provide a full explanation of the nationwide changes that were underway, so on July 30, Senator Peters wrote to Postmaster General DeJoy again seeking a fuller explanation of these changes.
During the week of July 22-29, news media around the country reported that signs were going up at post offices showing new reduced hours that would be going into effect in a few weeks. Reports indicate over one hundred post offices across the country, most of them in the Appalachian District, would have shorter hours, and many would close completely. (To reduce work hours in retail operations by 7 percent, the Postal Service would need to close several hundred post offices and shorten window hours in thousands.)
When West Virginia Senator Joe Manchin contacted the Postal Service about these changes, he was told that signs were incorrectly posted because of a “misunderstanding” between District officials and local postmasters.By the second week of August, on-time delivery of First-Class mail nationwide had fallen nearly 10 percentage points compared to the first week of July 2020 – a drop, as the Peters report observes, that represents approximately 85 million more late deliveries in that single week than would have otherwise occurred. As service performance reports released in the Jones lawsuit and under FOIA requests show, scores for single-piece First Class mail with a service standard of 3-5 days were down over 20 percent compared to the same period last year. (These reports can be found here.)
On August 6, Senator Peters launched an investigation into the Postal Service delays resulting from operational changes directed by Postmaster General DeJoy.
On August 12, the first of eleven lawsuits was filed against the Postmaster General, the Postal Service, and in some case, President Trump. (There’s a day-by-day timeline of the developments in these cases here.)
On August 18, the Senate’s Homeland Security and Governmental Affairs Committee secured a Senate oversight hearing with Postmaster General DeJoy for August 21, 2020. Just hours after this hearing was announced, DeJoy said he would pause certain actions that had caused concern, including sorting machine removals, but at that point he would not reverse all of the operational changes the Postal Service had ordered.
On August 21 and 24, the Postmaster General testified to the oversight committees in the Senate and House. In these two days of hearings, over several hours of testimony, DeJoy never found occasion to mention that the changes in postal operations everyone was experiencing were part of a massive cost-cutting Work Hour Reduction plan.
The Postmaster General admitted that the changes, particularly eliminating extra trips, had resulted in delays, but he continued to downplay the extent and impact of those delays. He denied directing the removal of blue collection boxes and mail processing equipment, the cutback on hours at post offices, and the new rules on overtime.
When Congresswoman Eleanor Holmes Norton asked DeJoy if a postal manager would send out a document claiming overtime was being eliminated without direction from the top of the agency, he didn’t answer directly. When she asked him if he had tried to find out who was responsible for doing this, he said, “I have purposely not tried to find out who that was.” Norton was incredulous.
Later in the hearing, Congresswoman Stacey Plaskett asked DeJoy why, given that he was making a number of “drastic operational changes,” he had not submitted a request for an advisory opinion. DeJoy responded, “A request for an advisory opinion on asking the organization to adhere to their transportation schedules is not required.”As we now know, there was a lot more going on than getting trucks to run on time. Federal judges in five lawsuits have issued preliminary injunctions banning the Postal Service from making operational changes, at least until the election. In three cases – Washington v Trump, New York v USPS and Pennsylvania v DeJoy — the judges’ rulings focused on the fact that the Postal Service had failed to request an advisory opinion before making such changes.
According to the Washington Post, Mr. DeJoy “has told associates he was brought in to stem the Postal Service’s losses and that drastic changes were needed to make the agency solvent. He is determined to stay the course and make wholesale changes after the election, according to an associate who spoke with him recently.”
In addition to everything we saw taking place in July, these wholesale changes, reports The Post, may include the following:
- transporting more mail via trucks and trailers rather than airplanes (which would require relaxing service standards);
- raising package rates, particularly when delivering the last mile on behalf of big retailers like Amazon;
- setting higher prices for service in Alaska, Hawaii and Puerto Rico;
- curbing discounts for nonprofits;
- leasing space in Postal Service facilities to other government agencies and companies.
Other changes that may be announced after the election include:
- relaxing service standards to make it easier to make all the other changes (which would definitely require requesting an advisory opinion from the PRC);
- consolidating more mail processing plants (which has been facilitated by the removal of the sorting machines);
- making more aggressive efforts to switch customers from home delivery to cluster boxes (which helps reduce letter carrier work hours);
- outsourcing more elements of the transportation network (a new program called Surface Transportation Center Redesign involves contracting out to private companies, including a new STC in Orlando);
- putting “Alternative Delivery and Access Points” in big box stores like Staples and Target (which will allow postal customers to pick up and drop off packages at participating stores and thereby decrease traffic at post offices and make it easier to cut window hours).
The Postal Service may try to move on some of these changes after the election without going through an advisory opinion, but the plaintiffs in those lawsuits and the federal judges presiding over them will be watching. As will we all.