How many post offices does the country really need?


Dennis Ross, Tea Party congressman from Florida, held another hearing on the post office today.  The question before the committee was “Postal Infrastructure: How Much Can We Afford?”  Given that Ross is no friend of the Postal Service, you can can quess the answer—not much.

Below is a video of the hearing, and after that, a brief summary and response.

The first panel’s witnesses were Mr. David E. Williams, Vice President of Network Operations Management for the USPS, and Mr. Phillip Herr, Director of Physical Infrastructure Issues of the Government Accountability Office.  Herr, you may recall, was the focus of a Bloomberg article about the Postal Service a few weeks ago.  The GAO has been one of the main forces behind the downsizing of the postal serviceAlong with the OIG, it’s been issuing report after report about the need to close post offices and the kinds of changes to the law, regulatory procedures, and postal service administrative policies that would make it faster and easier to close post offices.

The thrust of the questioning from Ross and fellow Republicans, as well as a Democrat or two along the way, was that there are too many post offices and too many processing facilities, and this is one of the main reasons the Postal Service is having financial problems.  No news here.

There were a couple of interesting moments, however.  At one point (it’s 28 minutes into the you-tube video),  Congressman Stephen Lynch, a Democrat from Massachusettes, asked Herr, “Of the 38,000 post offices in the US today, how many do you think we really need?”  Herr wouldn’t “venture a guess,” and instead kicked the question to Williams, who wouldn’t give a specific number either.  Williams said it hinged on the growth of “alternative access” (grocery stores, Office Depot-type outlets, online, etc.).  When there are enough alternatives, then brick-and-mortar post offices won’t be so necessary.

Given how many post offices run in the red, no wonder that Herr and Williams didn’t want to come up with a specific number.  Imagine if one of them had said that half the post offices should be closed.  That might have actually made the evening news.

Another interesting moment occurred when Grace Napolitano, Democrat from California, gave the witnesses a piece of her mind about a consolidation that had taken place without, in her view, satisfactory notification.  Spurred by complaints from citizens and city council resolutions, she asked the USPS for an explanation and was “given the run around.”  Saying the information she requested was “proprietary,” the USPS sent her a redacted report that she waved to the hearing room—it consisted of nothing but columns of black blocks. Clearly frustrated, she said, “This is not how you treat a member of Congress.”

The second panel’s witnesses were Mr. Mike Winn, President of Greylock Associates, a firm that provides “consulting support to mail service providers and organizations that utilize the United States Postal Service”; Mr. Joe Hete, President and CEO of Air Transport Services Group(ATSG), “a leading provider of air cargo transportation”; and Mr. Cliff Guffey, President of the American Postal Workers Union.

Winn commented that “there is no need for more than 30,000 post offices,” and said the USPS should “outsource” to supermarkets to save expenses, reduce the size of the processing network, and do whatever else is necessary to reduce costs and show a profit—“that’s what we do in the private sector.”

Hete told a long story about a crisis his own company experienced and what they did to “rightsize” it “to attain the efficiencies” it needed to survive.  His main point was that the USPS needs to do the same.  First and foremost among the problems to be addressed, he said, is restructuring the union contracts.  Postal workers get paid too much compared to workers in the private sector.  He also mentioned that the USPS may not be able to “meet its payroll” in 2012.

Guffey reminded the committee that the Postal Service does not receive tax money, that there have been significant reductions in its work force, and that postal workers have suffered the consequences of closing facilities.  While not opposed to all closings and consolidations, the union has been critical of plans to close and consolidate some postal facilities, especially when the cost savings have been overestimated by the USPS and when postal customers will suffer a degradation of services.  He concluded by saying that it would be “tragic” to “dismantle” the postal service infrastructure.  The rural post office is a “focal point of many small communities, it’s where the flag flies.”

In the question period, Winn said the Postal Service needed to speed up the process for closing facilities; Hete brought up the issue of high labor costs again; and Guffey acknowledged that sometimes it was necessary to close a post office, as in Oklahoma, his home state, where the population of some towns has declined from 4,000 to 400.  But he disliked anything that reduced service to the American public, like getting rid of Saturday delivery.

The panel was cut short and seemed rushed because committee members had to leave for several votes, so it ended not with a bang but a whimper.

Overall, there weren’t many surprises, but it was frustrating listening to the hearing, not because of what was said but because of what was not even mentioned.  Given that Ross was chairing the hearing, it came as no surprise that most of the witnesses were there to support his efforts to “rightsize” the Postal Service by closing post offices and processing facilities.

Still, it might have been helpful to hear some other voices, like maybe a postmaster, a mayor, a businessman, or a regular citizen—someone who could talk about the social and economic value of the post office to a community.  We heard over and over about how the Postal Service is a “business” in need of “restructuring” in order to become “fiscally solvent,” but nothing about why a post office is more than a counter in a supermarket where you can buy stamps.

The push to close post offices is not new—it was happening long before the Postal Service ran into its current economic problems.  One can’t help but suspect that people like Ross, driven by ideology, and Herr, with his eye on the bottom line, are turning the situation into a “crisis” simply to justify dramatic changes to the Postal Service.  If the country could afford to maintain a network of brick-and-mortar post offices through the Great Depression and other economic downturns, why is it now necessary to close post offices that have been around for over 150 years?

UPDATE: The subcommittee meeting did not generate a lot of press, but here are a couple of items:

Press release from the USPS on Williams’ testimony

Hete focuses on USPS’ labor costs,” Washington News Journal, June 16, 2011

APWU press release, “Guffey Asks, Who’s the ‘We?”

(Photo credits: Top to bottom: Ross; Williams; Herr; Napolitano; Winn; Hete; Guffey)