Is ending air mail unfair? Testimony for the PRC’s Advisory Opinion on Changing Service Standards

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Steve Hutkins

The Postal Service ended Airmail as a separate class of U.S. mail on May 1, 1977, almost sixty years after it had been established. By 1974 the Postal Service was using airplanes to transport nearly 30 percent of First Class mail— over 15 billion pieces — and there wasn’t much difference between the two classes except that Airmail cost three cents more.

Today the Postal Service contracts with air carriers, primarily FedEx, to help deliver approximately 21 percent of First Class mail — over 10 billion pieces. This mail is essentially air mail, but without the special stamp and extra fee.

The Postal Service is now proposing to cut air transportation for the continental U.S. to about 12 percent of First Class volumes, and perhaps eventually to end it altogether.  The agency says shifting from air to surface modes of transport would improve net income by $175 million a year and avoid dependence on air carriers, which can sometimes be unpredictable in meeting USPS time frames.

The Postal Service needs air transportation in order to meet the service standard of three days for nonlocal mail, which applies to the entire contiguous 48 states.  Using trucks instead of planes means it will take one or two extra days to deliver the mail, so the Postal Service has proposed downgrading service standards. Instead of two or three days, the new standard will be two-to-five days. The Postal Service says that it will be able to meet these lower standards more consistently, so mail delivery, while slower, will be more “reliable” and “predictable.”

The plan to reduce service standards is now being reviewed by the Postal Regulatory Commission for an Advisory Opinion. The Postal Service presented five witnesses to make its case. You can see these testimonies as well as the rest of the PRC’s docket here and on our N2021-1 dashboard.

Yesterday four witnesses submitted rebuttal testimony, two of them on behalf of the APWU, plus long-time postal watchdog Douglas Carlson and me.

Carlson is the registrar and assistant vice chancellor for student information at the University of California, San Francisco; his testimony focuses on how the university could be impacted by slower mail.  Stephen DeMatteo is Executive Assistant to the President of the APWU; his testimony reviews more than 77,000 comments filed on the service standard changes published in the Federal Register.  Anita Morrison is Founding Principal of Partners for Economic Solutions; her testimony examines the impacts of the proposed changes in geographic terms, and it contains several maps similar to those in my testimony.

Here is my testimony as it was submitted yesterday (sans the autobiographical sketch). The testimony also includes an Excel document that can be found on the PRC website and, for easy access, Google Drive.

PURPOSE OF THE TESTIMONY

The purpose of my testimony is to provide the Commission with visual representations of what the proposed service standards would look like at the level of individual SCFs and at an aggregated national level. The Postal Service provides maps of service standards for SCFs on its PostalPro website, and these are very useful not only for mailers but also for the public. I have often referred journalists to these maps to help explain what service standards look like in actual practice.

When I was reviewing the Postal Service’s technical description of the proposed service standards, with all the details about drive-times, distances and postal operations, it became apparent that maps would help visualize the proposal. As I began making maps of the standards for specific SCFs, I saw that there was a considerable degree of variation. For example, for SCFs located near the middle of the country the area that would fall under a 5-day service standard tended be much smaller than was the case for SCFs located along the coasts.

This raised a question that had not occurred to me before: Would the service standards be unfair to some people just because of where they lived? With that question in mind, I made a few additional maps that I believe shed some light on the issue. 

A. MAPPING SERVICE STANDARDS

The service standard maps on the Postal Service’s PostalPro website color code every origin-destination pair for each SCF, enabling one to readily see what areas fall under which standard. Here is the PostalPro map for First Class mail originating out of SCF Chicago IL 606. The area in orange is subject to a 2-day standard; the rest of the contiguous U.S. falls under a 3-day standard (yellow), as do parts of Puerto Rico and parts of Alaska; the remaining areas are 4- or 5-day (sky blue and blue).

Figure 1. Service Standards SCF Chicago IL 606

Each of the maps for First Class mail, originating and destinating, looks like this map of SCF 606 in the sense that they all have a 2-day area of about the same size, with the rest of the contiguous 48 states under a 3-day standard. In that respect, the current system applies uniformly to the entire contiguous U.S.

With the data provided by the Postal Service in Library Reference USPS-LR-N2021-1-1, one can make similar maps showing the service standards being proposed by the Postal Service. Here is the map for SCF Chicago IL 606.

Figure 2. Origin SCF Chicago IL 606 Proposed Service Standards

For SCF Chicago, the 2-day area (orange) will get significantly smaller than it is now (about a third of its current size), and the 3-day area (yellow) will no longer cover the rest of the contiguous 48 states. Instead, a large area will become 4-day (sky blue), and the Pacific region, furthest from Chicago, would become 5-day (blue). Thus, for mail from Chicago to California (where all SCFs are colored in blue), the sender and recipient would experience a 5-day delivery standard.

Most of the maps for SCFs in the central part of the country look similar to this map for Chicago, with large areas of 3-day and 4-day service standards and a small area with 5-day service. Depending on where they are located, however, other SCFs would see large areas with a 5-day standard. Here’s the map for SCF Washington DC 200.

Figure 3. Origin SCF Washington DC 200 Proposed Service Standards

While a relatively small area fell within the 5-day zone for SCF Chicago, for SCF Washington DC most of the West falls within the 5-day standard. Thus, based on a count of possible destinations for letters that customers send, mailers in Washington DC are more likely to encounter a 5-day service standard than mailers in Chicago.

For origin SCFs in the West itself, the destination area falling under a 4- or 5-day standard encompasses almost the entire country, as seen in this map for SCF Seattle WA 981.

Figure 4. Origin SCF Seattle WA 981 Proposed Service Standards

For mail originating in SCF Seattle, the area that would fall under a 3-day standard is much smaller than it would be for Chicago and Washington DC, and the area under a 5-day standard would be significantly larger. For mailers in SCF Seattle, 4-day service begins as close as Southern California. Five-day service starts in Kansas and becomes universal in the eastbound direction soon thereafter.

Here is the map for SCF Los Angeles CA 900. It shows that for mailers in Los Angeles, 4-day service begins in Oregon, and 5-day service starts in South Dakota and applies roughly to areas east of the Mississippi River.

Figure 5. Origin SCF Los Angeles 900, CA Proposed Service Standards

While the individual SCF maps show how each origin or destination SCF will be impacted by the proposed changes, the data provided by the Postal Service can be used to visualize the proposed changes in aggregated terms. The following maps show how origin-destination pairs and volumes would be distributed across the country.

B. ORIGIN-DESTINATION PAIRS

Each SCF consists of about 900 origin-destination pairs for the contiguous U.S. Under the proposal, a percentage of them will be 2-day, a percentage 3-day, a percentage 4-day and a percentage 5-day. The following map shows the percentage of pairs per SCF that would fall within a 4- or 5-day service standard. (The map combines both originating and destinating pairs, so each pair is counted twice.)

Figure 6 Percent of Pairs Shifting to 4 or 5 day Service Standard

In the western states, as well as southern Florida and parts of Texas, over 75 percent of the origin-destination pairs for each SCF would fall within a 4- or 5-day standard (indicated by the area in red). In fact, in the Pacific states, many SCFs would have over 90 percent of their pairs under a 4- or 5-day standard; for example, SCF Tacoma WA 984 would have 91.37 percent of its pairs (origin and destination) shift to a 4- or 5-day standard.

In the Midwest and Northeast, 50 to 75 percent of the pairs would fall within a 4- or 5-day standard (indicated by blue). For SCFs in most of the central and eastern parts of the country, fewer than 50 percent of the pairs would be 4- or 5-day (green and yellow). In some cases, such as the SCFs in Kentucky and Ohio, fewer than 30 percent of the pairs would be 4- or 5-day. (See SH-LR-N2021-1/1, tab “Fig 6 % Pairs SSD 4 or 5.”)

The following map focuses on where the 5-day origin-destination pairs will occur. As with the previous map, this map combines both originating and destinating pairs.

Figure 7. Percent of Pairs Shifting to 5-day Standard

In the Midwest, fewer than 8 percent of the origin-destination pairs would shift from 3-day to 5-day; in the western states, over 30 percent of the pairs would be downgraded to 5-day. For SCF Lincoln NE 683, only one origin-destination pair would shift to a 5-day standard, 0.06 percent of the total. For SCF Eureka CA 955, over 75 percent of the pairs would shift to a 5-day standard. (See SH-LR-N2021-1/1, tab “Fig 7 % Pairs SSD 5.”)

C. DAILY VOLUMES

The Postal Service has provided daily volumes for First Class mail for each origin-destination pair. If these volumes are aggregated by service standard, one can calculate the percentage of the total volume destined for each SCF that would fall within each standard. The following map shows the percentage of volume destined to each SCF that would shift to a 4- or 5-day service standard under the proposal.

Figure 8. Percent of Destination Volume per SCF shifting to SSD 4 or 5-day

In this map, green indicates SCFs where 6 to 16.9 percent of volumes would be downgraded to a 4- or 5-day standard; yellow indicates where 17 to 23 percent of volume destined to the SCF would shift to a 4- or 5-day service standard; blue indicates where 24 to 44.9 percent of volumes would be 4- or 5-day; and red indicates where 45 to 88 percent of volumes would be 4- or 5-day. For SCF Springfield IL 627, 7.7 percent of the volume would fall under a 4- or 5-day standard. For SCF Las Vegas NV 890, 68.4 percent of volumes would be 4- or 5-day. (See SH-LR-N2021-1/1, tab “Fig 8 % vol SSD 4 or 5.”)

The following chart shows the percent of volumes for each service standard as they would occur in each of the ten 1-digit zip zones. The chart combines originating and destinating volumes for each SCF (each piece is counted twice).

Figure 9. Percent of Volumes by Service Standard and 1-digit zip zones
CSV  

 

The regions with a prefix of 1 to 4 would have about 20 percent of their volumes shifted to 4 or 5 days, while zones 5, 7, 8 and 9 would have over 40 percent of their volumes downgraded to 4 or 5 days. Overall, Zones 0 to 8 would have about 6.4 percent of their volumes shifted to a 5-day standard. For zone 9, the Pacific region, almost 31 percent of mail volumes would be downgraded to a 5-day standard. (See SH-LR-N2021-1-1, tab “Fig 9 % vol SSD & 1-digit.”)

D. AVERAGE DELIVERY TIME

One of the metrics used by the Postal Service is average delivery time. The current average delivery time, based on service standards, is about 2.6 days; under the plan, it would increase to about 3 days.

The following map shows average delivery times across the country under current standards. (It combines both originating and destinating volumes.) The areas in green and yellow represent SCFs where the average delivery time is below the national average; the areas in blue and red show SCFs where the average delivery time is above this average.

Figure 10 Average Delivery Time (days) under Current Service Standards

Under current standards, average delivery times for the SCFs range from about 2.17 days to 3 days. While higher numbers tend to occur mostly in the west and southern parts of the U.S., the map is for the most part highly variegated. Under the proposed changes in standards, however, the differences between regions will become more pronounced, as shown in the following map.

Figure 11. Average Delivery Time (days) under Proposed Service Standards

On the map, the areas in green and yellow are below this average while the areas in blue and red are above it.

The averages for individual SCFs range from 2.38 to 4 days. For SCF Madison WI 537, average delivery time would be 2.46 days, while SCF Las Vegas NV 890 would have an average delivery time of 3.89 days. (See SH-LR-N2021-1-1, tab “Fig 11 ADT Proposed.”)

The average delivery time nationwide will increase by approximately 18 percent. This average conceals significant variation. The following map shows the percentage increase in average delivery time for each SCF. In this map, the green and yellow areas indicate areas where the average delivery time would increase by less than the nationwide average of 18 percent. The blue indicates areas where average delivery time would increase 18 to 26.9 percent, and the red indicates areas where the average delivery time would increase 27 to 40 percent.

Figure 12. Percent Increase in Average Delivery Time

Under the proposal, average delivery time for SCF Quincy IL 623 would rise from 2.46 to 2.59 days, an increase of 5.24 percent, while for SCF Sacramento CA 956 average delivery time would rise from 2.85 days to 3.99, an increase of 40 percent. For zip codes with a 1-digit prefix of 6, average delivery time will increase 12.7 percent, while for the zip codes with a prefix of 9, the increase will be 27.7 percent. (See SH-LR-N2021-1-1, tab “Fig 12 ADT % Increase.”)

E. MODE MAPPING

Another way to visualize the proposed standards is by looking at transportation mode. In USPS-LR-N2021-1-1, the Postal Service has provided an Excel sheet showing what mode, air or surface, is approved for each origin-destination pair. (It includes not only the contiguous 48 states but also Alaska, Hawaii, and territories, for a total of about 930 pairs rather than about 900 for the contiguous U.S.) With this data, one can prepare the following map. It shows the percentage of air pairs for each destinating SCF.

Figure 13. Percent of OD pairs using air (current)

In this map, green indicates where the Postal Service uses air transportation for 20 to 39 percent of the origin-destination pairs; yellow, 40 to 59 percent; blue, 60 to 79 percent, and red, 80 to 100 percent. For SCF Nashville TN 370, about 21 percent of the pairs are designated air mode, while for SCF Bismarck ND 585 and SCF Yakima WA 989, over 90 percent of the mail arrives using air transportation. (See SH-LR-N2021-1-1, tab “Fig 13 % Air Mode.”)

This map illustrates just how dependent people living in the western half of the country are on air transportation in order to see delivery within a 3-day service standard. As the Postal Service phases out air transportation for First Class mail, it will have the greatest impact on those areas that use it most.

CONCLUSION

These maps show how some areas of the country will have more origin-destination pairs and more mail volume downgraded to a 4- or 5-day standard than other areas will see. The maps, as well as the spreadsheets used to make them, show that while the average delivery time for the country as a whole may increase 18 percent, the increases will not be uniform. Some places will see much larger increases than others. In general, it will be the western states, as well as the country’s “extremities” — Maine, Florida, and southern Texas — that experience the changes most deeply.

Whether or not these variations in regional difference are consistent with the goals of 39 U.S.C. § 403(c) and 39 U.S.C. § 101(a) is for the Commission to determine. The aim of my testimony has not been to make that argument but rather simply to provide evidence that may help make such a determination. I hope that the Commission finds the maps as useful as I have in understanding and evaluating the implications of the proposed service standards.