The Postal Service has been trying to manage public perception of the network transformation now underway though flashy TV spots, a glossy Second-Year Progress Report, and DeJoy’s snazzy keynote address at the Postal Forum.

The Postal Service has rebuffed efforts to learn more about the plan by the unions, management associations, mailers, and the Postal Regulatory Commission. Private companies that contract with the Postal Service — like lessors of post office buildings and the HCR drivers who transport the mail — are probably having the same problem. When the Postal Service does deign to share information with stakeholders, it’s “not for public disclosure.”

The Postal Service is taking the position, We’ll tell you only what we want you to know and only when we want you to know it. Many of the main questions about the plan consequently remain unanswered:

• Which facilities will be impacted, in what ways, and according to what schedule?
• What processing equipment is being moved, from where to where?
• Which post offices will lose their carriers to an S&DC, and which stations and branches will be “consolidated”?
• How many jobs will be eliminated, how many employees will be excessed, and at which facilities?
• How many more delivery routes will be required due to the longer drive from S&DCs to carrier routes?
• How much will the Postal Service spend on repurposing processing facilities and building new ones?
• Why has the Postal Service not conducted any of the required public-facing studies before moving ahead with facility consolidations?
• Why does the Postmaster General believe that simply sharing details about the plan through the PRC’s public inquiry will put the plan in jeopardy?

These questions will eventually need to be answered. In the meantime, here’s an overview of what we’ve been told and what can be gleaned from it, along with some speculation about which facilities will be impacted and how.

The future flow

The main elements of the new network are Regional Processing & Distribution Centers (RPDCs), Local Processing Centers (LPCs), Sorting & Delivery Centers (S&DCs), and Delivery Units (DUs) at post offices.

Here’s a graphic from the Progress Report showing the mail flow through the various components of the network.

Mail and packages sent from a post office (delivery units in the graphic, but any post office) will be transported upstream to the nearest S&DC or RPDC. Depending on the destination, the item will then go to the recipient, a delivery unit in the area served by the S&DC, or an RPDC, and then downstream to an S&DC or another delivery unit. If the item is going a longer distance, it will be transported from one RPDC to another RPDC, and then downstream to an LPC, S&DC, or delivery unit.

That’s the end-to-end route for a single piece of mail or a parcel sent from a post office. But this accounts for just over 10 percent of total volume. Most commercial mail is dropped at a processing facility; for these mailers, the network changes may just affect where they drop the mail.

Amazon, however, doesn’t drop everything at processing centers. In order to get same-day delivery, Amazon transports many of its packages to thousands of post offices early each morning for last-mile delivery by the Postal Service. In the new network, Amazon will be able to simply drop its shipments at an S&DC. It will be much the same for UPS, which also uses the Postal Service for last mile. Other big mailers may enjoy a similar benefit, with next-day delivery over a large geographic range.

DeJoy says this will be a “game changer” that will help expand the Postal Service’s market share of the parcel business and pay for the added expenses of his network transformation. As he said at the Postal Forum, “Once completed, this new network will be able to accept mail and packages at specified cutoff times and reach millions of delivery points the next day, taking the Postal Service from the leader in the last mile, to the leader in the last 150 miles.”

Expanding market share will not be easy. As of April 2023, volume for shipping & package services for the first seven months of FY 2023 was down 3.6 percent over the same period last year. Last week, UPS and the Teamsters came to an agreement to reduce the size of SurePost packages eligible for delivery by the Postal Service, which will impact the volume of last-mile deliveries the USPS does for UPS.

Regional Processing and Distribution Centers

The largest and most “strategically important” facilities in the new network will be the 60 Regional Processing and Distribution Centers. These RPDCs will have the capacity to handle all volume transported into and out of their regions.

According to the Second-Year Progress Report, the RPDCs are “multi-functional distribution centers for all network originating mail and packages and all destinating packages — effectively centralizing all metro-area originating processing operations in a single building, with cross-docking and other functionality as required in the specific region.”

In his testimony to the House Oversight committee in May, DeJoy said that operations from 400 facilities would be consolidated into these 60 RPDCs. (See this previous post about the movement of equipment that will begin this summer.) At the Postal Forum, he indicated that the Postal Service will also deploy annexes and some outsourced functions into the RPDCs.

The RPDCs will all have a similar configuration — the same sorting machines in the same place. The uniformity and standardization are intended to improve productivity and efficiency, and it means that anyone familiar with one RPDC will be instantly familiar with the others.

At the Postal Forum, the PMG said that 45 of the RPDCs will be in existing postal facilities, and the other 15 will be new facilities in areas of the country that have experienced expansive growth — presumably places like Texas, Florida, Arizona, Nevada, Georgia, and the Carolinas.

Twenty of the RPDCs in existing plants will be repurposed Network Distribution Centers (NDCs, formerly bulk mail centers), as discussed in this post. The others will be in repurposed P&DCs.

The “first wave” of RPDCs includes Richmond (Sandstone), VA; Chicago (Forest Park), IL; Houston (North Houston), TX;  Portland, OR: Jacksonville, FL; Boise, ID; Greensboro, NC; and Santa Clarita, CA, plus three new facilities in Atlanta (Palmetto), GA; Indianapolis, IN; and Charlotte (Gastonia), NC.

New sorting equipment is being deployed to several of these RPDCs already, and some operations, like destinating packages, will be relocated to these facilities from other plants in their region over the coming months.

At this point, we know the locations of about half the future RPDCs. Where will the others be located?

While the Postal Service hasn’t answered that question, it has shared a couple of maps showing the locations of potential RPDCs under review. Based on these images, one can create a Google Map showing 60 current facilities that could become RPDCs. A list of these facilities is here (tab “Potential RPDCs”).

The Progress Report indicates there will be eventually be two RPDCs in Chicago and Atlanta, and an offline presentation says Charlotte will have two as well, but the two USPS maps show only one for each, as does the Google map. The P&DC in Bethpage, NY, which had appeared on earlier lists, is no longer an active project, so it’s not on the map, but it could eventually become an RPDC.

Most long-haul transportation between different parts of the country will go between these RPDCs, as opposed to the current system in which mail is transported between more than 250 processing centers, aka Sectional Center Facilities. In the new network, inter-SCF trucking will thus be replaced by inter-RPDC routes. These graphics from DeJoy’s presentation at last year’s Postal Forum contrast the old and new transportation network.

The new network is supposed to simplify transportation routes, reduce transportation costs, and ensure that a larger percentage of each truck is filled — a preoccupation of DeJoy since he became Postmaster General.

In FY 2022, the Postal Service spent about $3 billion on inter-SCF and inter-NDC Highway Contract Route transportation. It remains unclear how much this expense might be reduced by the new transportation network, and the Postal Service has shared no data on the question.

There’s more about RPDCs in this previous post, and for a deeper dive, check out this April presentation to business mailers (slides/audio).

Local Processing Centers

According to DeJoy’s keynote at the Postal Forum, the RPDCs will connect to approximately 220 Local Processing Centers (LPCs). Most if not all of these LPCs will be located in repurposed P&DCs.

The Postal Service has not shared a list of these LPCs, but one can get an idea of where some of them are from a map that served as the backdrop during one part of the PMG’s keynote at the Postal Forum. It shows about 140 LPCs (not all 220), along with the sixty or so RPDCs.

Here’s a Google map version of this map, with 60 hypothetical locations of the RPDCs (in red) plus about 155 P&DCs that could become LPCs (in blue), in roughly the same locations as seen on the graphic map. A list of these LPCs is here.

According to the Progress Report, the primary mission of the LPCs will be “sorting letter and flat mail to carrier route or delivery walk sequence and serving as a transfer center to aggregate product on its way to delivery.” As the PMG explained at the Postal Forum, LPCs are all current postal facilities, but “they will be redesigned to focus on the destinating operating requirements for mail processing and will serve as transfer hubs to our delivery centers” (the S&DCs and delivery units).

Most LPCs will be located 20 to 200 miles from their RPDC. For example, the new Atlanta RPDC in Palmetto, GA, will connect with four LPCs; the closest, in Atlanta, is about 20 miles away, while the furthest, in Augusta, is 170 miles away. (Also, it looks as though the Atlanta NDC and Peachtree P&DC may be closing; it’s not clear if they’ll be converted to S&DCs.)

In certain locations, the LPC will be located in the same facility as the RPDC, which will reduce the transportation from RPDC to LPC. In other places, former P&DCs will see their package processing and outgoing operations transferred to the RPDCs, which will create space for the LPC and make it possible to add an S&DC in the same building. In these cases, the S&DC will be a self-contained operation along with the LPC, which will reduce the transportation from LPC to S&DC.

Sorting & Delivery Centers

The S&DCs will take over delivery operations from several thousand post offices. Carriers will go directly from the S&DCs to their routes (if the route is within a 30-minute drive from the S&DC). For these offices, this will eliminate the need for Highway Contract Route operators who move the mail back and forth between processing centers and post offices.

At the Postal Forum, the Postmaster General said he expected to “deploy over 400 new Sorting and Delivery Centers in the next three years.” About 100 of these S&DCs will share the same building with an LPC.

The PMG explained that 300 of the S&DCs will be located in “previously vacated mail processing plants.” It’s not clear what that means, since there aren’t that many empty processing facilities. Perhaps he meant that 300 S&DCs will be located in currently operating P&DCs, some of which have had some of their operations consolidated to other plants.

So far, the Postal Service has announced the locations of only 24 S&DCs that have been launched or are scheduled to do so in the coming months. A list of them, along with their 82 spoke offices, is here; for more info, see this previous post.

Beyond these 24 S&DCs, it’s mostly just speculation, but here’s a map showing about 400 potential S&DCs. A list is here, tab “Potential S&DCs.” This list consists of about 265 P&DCs, plus some annexes, post offices, and other facilities.

In addition to these 400 S&DCs, DeJoy said, “We will then expand, equip, and improve our larger delivery units that already exist to enable them to deploy the same functionality. We expect this exciting new functionality to be deployed in at least 600 delivery units around the country.”

Again, it’s not exactly clear what this means, but it sounds as if 600 large post offices could also house S&DCs. A list of the 600 largest post offices in properties owned by the USPS but that aren’t connected to a P&DC is here, tab “600 largest owned POs”.

This is the first we’ve heard about putting S&DCs in a large number of post offices, but back in July 2022, an internal USPS presentation said the agency was looking at 928 existing facilities with available space for an S&DC. So there could eventually be as many as a thousand S&DCs — 400 in processing plants and 600 in post offices. This would put more delivery units and delivery points within the 30-minute reach of an S&DC. Plus, the more S&DCs there are, the shorter the distance between S&DC and routes, which will cut down on the extra miles required by the new network.

Delivery Units and Post Offices

Some S&DCs would consolidate carrier operations from a dozen post offices; others might take on carriers from just a couple of nearby offices. As for the total number of post offices that could be impacted, that too remains unclear. The Postal Service has had little to say about post offices in the new network — except to say they won’t be impacted.

At the AEI forum last July, DeJoy suggested that the network’s 19,000 delivery units could be reduced to 12,000 or 13,000, meaning 6,000 or 7,000 post offices could eventually lose their carriers. At the Postal Forum, he said there would be 15,000 remaining delivery units, which would make 4,000 post offices losing their carriers.

Whatever the number, post offices that lose their carriers will definitely be in danger of eventually being closed, despite DeJoy’s reassurances to Congress a few weeks ago that retail operations will not be affected.

The Postal Service doesn’t want to acknowledge that removing carriers has any connection to closing post offices because such a change in retail services would require an advisory opinion from the Postal Regulatory Commission. The Postmaster General has made clear his views on advisory opinions and the PRC’s “interference” with a public inquiry into his plan.

Retail services are already being impacted. At this point, at least seventeen post offices set to lose their carriers will also see clerks excessed and their positions eliminated. (A list is here.) Priority bidding rights to clerk jobs in other post offices are posted regularly. The latest list has jobs that are a long way away. For example, clerks losing their positions at post offices sending carriers to the Mid-Hudson S&DC in Newburgh, NY, are being pointed to offices in Connecticut and Pennsylvania — 150 miles away.

‘This is not a consolidation!”

At the Postal Forum, DeJoy said that the Delivering for America plan will eliminate 200 “small and wasteful accessorial functional locations.” He then added, with emphasis, “This is not a consolidation! It is an aggregation of randomly deployed functionality spread out across a local area because of ill-planned deployments. The Great Unwind!!”

Whatever that’s supposed to mean, the Delivering for America plan is clearly about consolidating processing operations.

The DFA plan itself mentions “consolidation” of facilities several times. In a recent report to Congress, the Postal Service uses “consolidation” to describe the movement of equipment and operations from one facility to another. The report even has a footnote saying the Postal Service will follow all policies outlined in Handbook PO-408, the guidelines for Area Mail Processing (AMP) studies for consolidating plants.

In his testimony before Congress, DeJoy addressed a question about why the Postal Service is spending so much money on its infrastructure. “We have a tremendous embedded infrastructure that has significantly deteriorated,” he explained. “Right now we have 400 locations that we move mail and packages across the nation. We’re going to move that into 60 locations. We’re just going to be consolidating.”

Moving operations from 400 facilities into 60 facilities and totally eliminating 200 facilities would certainly seem to be acts of consolidation, but perhaps DeJoy doesn’t want the plan to be seen that way. If they’re consolidations, the Postal Service would need to follow the policies described in Handbook PO-408 and abide by Section 302 of the Postal Accountability and Enhancement Act, which says “the Postal Service from closing or consolidating any processing or logistics facilities without using procedures for public notice and input.”

DeJoy told Congress that the Postal Service is following all applicable laws concerning consolidations, including Section 302 of PAEA. About the only way that could be true is if the movement of equipment and operations now underway weren’t actually “consolidations.”

It would be one thing if the Postal Service were moving equipment in one or two locations, but it looks as if the entire network of processing facilities will be impacted. Some will lose sorting equipment, some will gain equipment, and some may be closed completely.

These are stealth consolidations on a massive scale, and the Postal Service wants this all to happen under the radar, outside of the scrutiny of the AMP process and any oversight from Congress or the PRC. And there’s no sign of anyone or anything preventing that from happening.

— Steve Hutkins

(Featured image: Richmond VA processing center, Postal Forum presentation)

(For more about the new network, check out the S&DC dashboard.)