At last week’s Senate oversight hearing on the Postal Service, the Postmaster General encountered some severe headwinds. Michigan Senator Gary Peters worried that costs are increasing and service is declining, Senator Rand Paul berated DeJoy for hiring more union workers rather than using cheaper contract labor, Senator Jon Ossoff renewed his complaints about poor service performance in Georgia, and Senator Josh Hawley threatened to kill the Regional Transportation Optimization (RTO) initiative because of its impacts on rural Missouri.

Two of the senators brought up the issue of keeping local mail local. New Hampshire Senator Maggie Hassan expressed her opposition to consolidating local mail operations from Manchester NH to Boston MA, and from White River Junction VT to Hartford CT.  Nevada Senator Jacky Rosen called the RTO a “misguided proposal” that would add to mail delays and unfairly impact rural areas, and she repeated her opposition to moving operations from Reno NV to Sacramento CA.

The PMG explained that he had visited the Reno facility, and the Postal Service had decided that the local turnaround mail would stay in Reno. It was unclear what would happen to Manchester and White River Junction.

The Postal Service often says that Delivering for America is “a living plan” and still in flux. The evolving nature of the plan has been evident over the past few weeks as the Postal Regulatory Commission has begun reviewing it for an advisory opinion. That’s especially true with respect to local mail.

More LPCs keeping local operations

One key question for the PRC has been which Local Processing Centers (LPCs) would retain operations for local mail. Rather than going from the LPC to a Regional Processing & Distribution Center (RPDC) and then returning it to the same LPC, the local mail would turnaround at the LPC. Local mail would remain local and, in some case, preserve a 2-day service standard.

The Postal Service shared a list of eleven of the LPCs “qualifying” for retaining local operations back on November 12 in its response to POIR No. 3, question 37. Five more qualifying LPCs were added to the list on November 22 in a supplemental response. (There’s more about these 16 LPCs in this post.)

At the PRC hearing on December 4, Commissioner Thomas Day brought up the matter of LPCs retaining local operations: “If I heard it correctly during some of the more recent testimony from the Postmaster General, I think it was even alluding there may be as many as 30 of those locations around the country where it will stay at the LPC.” (Hearing transcript, p. 313)

USPS witness Stephen Hagenstein responded that there are “approximately 36 LPCs that will retain their cancellation operations…. The intent is to have that cancellation operation be able to extract out the local turnaround volume, keep that in the LPC, and help ensure that we can maintain two-day delivery within that LPC service area.” (Transcript, p. 313)

This means that in addition to the 16 LPCs retaining local operations that the PRC has been told about, there will be twenty more LPCs that will continue processing and cancelling local mail and provide a 2-day standard for some nearby ZIP Codes.

According to Mr. Hagenstein, the Postal Service will provide a list revealing these additional LPCs sometime over the next couple of weeks (Transcript p. 626). In the meantime, one can hazard a guess as to which facilities will be impacted based on material the Postal Service has already provided to the Commission.

The qualifying LPCs

On October 7, the Postal Service submitted a library reference (USPS-LR-N2024-1-3) with the service standards for 37.7 million ZIP Code pairs. The spreadsheet had about 20,000 OD pairs for mail originating at post offices subject to RTO with a 2-day service standard rather than a 3-day standard, as one would expect for RTO offices. These pairs represent a very small portion of the complete data set of standards, but they are significant, and they came up frequently, directly and indirectly, at the PRC hearing.

I posed an interrogatory to witness Stephen Hagenstein (SH/USPS-T1-3) asking about those OD pairs. Mr. Hagenstein explained that “the total number of OD (5-Digit ZIP Code to 3-Digit ZIP Code) pairs that would retain the 2-day standard is 19,575. 2,695 originating RTO Post Offices are within 50 miles of qualifying LPCs and will have Single-Piece First-Class Mail volume that is originating and destinating within the qualifying LPCs service area.”

Some 5-digit ZIP Codes have more than one post office and some post offices serve more than one ZIP Code. Overall there are about 3,500 ZIP Codes within 50 miles of a “qualifying” LPC that will continue to have a 2-day standard for some local mail. If one maps these ZIP Codes, it becomes readily apparent that they are all clustered around 36 different LPCs.

Sixteen of these clusters surround one of the 16 LPCs that we’ve already been told will retain local operations. It’s likely, then, that the 36 LPCs referenced at the hearing are the same as those that can be extracted from the service standard spreadsheet.

Below is a list of the 36 LPCs that appear to be “qualifying” facilities that will retain cancellation machines and process turnaround mail for local ZIP Codes. It should be emphasized that this list is purely speculative, and the Postal Service may produce a much different list in a week or two.

If this list is accurate, it means that the Postal Service has known since it introduced the case to the PRC in early October (and probably well before) which LPCs would retain local mail operations. If that’s so, one wonders why the Postal Service has made such a mystery of the matter and delayed revealing the full list to the Commission and the public.

UPDATE, FEB. 22, 2025: Over the past few days, the Postal Service has announced that it will retain some local processing operations at the following facilities: Missoula, MT; Cheyenne, WY; Casper, WY; Iron Mountain (Kingsford), MI; North Platte, NE, and Champaign, IL. Only Champaign appears on the above list of 36 LPCs retaining local operations. Apparently, then, this hypothetical list is incorrect, or at least incomplete. It’s not clear yet if the other LPCs on the list will eventually be on the official list, or if it was wrong to include them. The Postal Service has yet to release the full list of LPCs that will retain local operations.

UPDATE, APRIL 8, 2025: The Postal Service has announced that Corpus Christi will retain local mail operations.

Mapping the LPC service areas

Here are regional maps showing ZIP Codes in three categories: (1) ZIP Codes within 50 miles of an RPDC (in yellow): post offices in these areas will get an afternoon collection; (2) ZIP Codes more than 50 miles from the RPDC (in blue): the post offices in these areas are subject to RTO and will not get an afternoon collection: and (3) ZIP Codes within 50 miles of a qualifying LPC (in orange): post offices in these areas will see some of their local mail get a 2-day service standard, and they may or may not get an afternoon collection (see below).

You can also determine if a particular ZIP Code or post office is located near a qualifying LPC and hence subject to a 2-day standard by using this lookup tool. Just enter a 5-digit ZIP or a place name. Note that the tool produces results only for ZIPs that have an RTO office and a 2-day standard.  (There more about the new service standard in this previous post.)

oZIP5	PO, ST	Destination ZIP3s	PO-LPC miles	PO-RPDC Miles	RTO ELIGIBLE
04401	BANGOR, ME	044, 046, 047, 049	2.8	133.7	TRUE
04402	BANGOR, ME	044, 046, 047, 049
04408	AURORA, ME	044, 046, 047, 049	30.9	162.1	TRUE
04410	BRADFORD, ME	044, 046, 047, 049	26.6	138.3	TRUE
04411	BRADLEY, ME	044, 046, 047, 049	22.5	151.8	TRUE
04412	BREWER, ME	044, 046, 047, 049	4.2	135.4	TRUE

Post offices near qualifying LPCs

One of the questions concerning the LPCs retaining some local operations is what will happen to the post offices less than 50 miles away. Will they or won’t they continue to get an afternoon collection? The Postal Service’s answer to this question has evolved over the past few weeks.

In his November 12th response to my interrogatory (SH/USPS-T1-3), Mr. Hagenstein stated: “RTO Post Offices are defined primarily by the distance between Post Offices and their servicing RPDC facilities. In the case of Single-Piece First Class Mail, qualifying LPCs that are expected to retain cancellation operations in the future state network provide turnaround (intra-LPC) capability that allows for a two-day service standard rather than 3-Day service standards. The office would maintain its RTO status and expected service standard impact for volume that is processed at the RPDC” (italics added). (Transcript p. 108)

That response indicates that post offices within 50 miles of a qualifying LPC and more than 50 miles from the RPDC would enjoy a 2-day standard for local mail but they would not get an evening collection — they will retain their RTO status and have one day added to the service standards. All outgoing mail, aside from local turnaround mail, would be subject to the same service standards as any other RTO post office, i.e., plus-one day for the collection leg.

Also on November 12, Mr. Hagenstein responded to an interrogatory posed by Douglas Carlson (DFC/USPS-T1-12) about the post offices near the qualifying LPCs: “Post Offices located within 50 miles of these LPCs are expected to continue to dispatch their outgoing mail on the day/evening of collection” (italics added).

In other words, post offices less than 50 miles from a qualifying LPC will get an evening collection just like post offices less than 50 miles from the RPDC. They will not be subject to the plus-one day rule for RTO offices.

The response to the Carlson interrogatory thus contradicts the response to my interrogatory. The Postal Service seems to have recognized this, so on December 3 the Postal Service submitted a supplemental response to Carlson’s interrogatory seeking to clarify what would happen to post offices more than 50 miles from the RPDC but less than 50 miles from a qualifying LPC. The Postal Service explains it this way:

“The original response to DFC/USPS-T1-12, provided by United States Postal Service Witness Hagenstein, stated that Post Offices located within 50 miles of LPCs with cancellation capacity are expected to continue to dispatch their outgoing mail on the day/evening of collection. This accurately represented the Postal Service’s plans at the time that the response was submitted. However, upon further consideration, the Postal Service now expects that designated LPCs with cancellation capacity will dispatch outgoing volumes either the day/evening of collection or in the morning the day after collection (if subject to RTO), depending on the volume and operating plan.” (transcript, p. 95). (italics added)

In other words, the Postal Service now says that some post offices served by qualifying/designated LPCs will get an evening collection, while others will not.

That really doesn’t tell us much, since the Postal Service has said the same thing about all RTO post offices, regardless of where they are located. There are hundreds of post offices, possibly a thousand or more, that are more than 50 miles from both a RPDC and LPC but that may be exempted from RTO and continue to get afternoon collection because they are high volume or due to other business considerations.

The Postal Service has said almost nothing about these offices, so it’s impossible to know how many there might be or what the criteria are for exempting them from RTO. Nor has the Postal Service explained the criteria for determining which of the post offices within 50 miles of a qualifying LPC will get an afternoon collection and which of them won’t.

That raises another question: How will the Postal Service be able to achieve a 2-day standard for the post offices that are less than 50 miles from a qualifying LPC if there’s no afternoon collection? This would leave only one day for processing and delivery. Achieving a 2-day standard will pose quite a challenge.

What’s local mail, anyway?

Press releases, news articles, statements from elected officials, and comments made during the advisory opinion process consistently refer to retaining local mail operations at some LPCs rather than transporting mail to an RPDC and then back to the LPC. This keeps more jobs at the LPC, minimizes transportation time and costs, and makes a shorter service standard possible. But what makes some mail “local”?

Local mail sometimes refers to the mail that both originates and destinates in the 3-digit ZIP Code areas that are served by the processing facility. When one hears that local mail processing will remain at a LPC, it usually refers to this “turnaround” mail.

But another way to view “local mail” is mail that both originates and destinates within an area that has a 2-day service standard, as opposed to the 3-day, 4-day and 5-day mail, which must travel much farther. Under the current service standards, this 2-day area is usually much larger than the area associated with a facility’s 3-digit ZIPs.

Here’s a map showing the current service standards for Waterloo Iowa 50701. It shows that the entire state enjoys a 2-day standard for mail sent from Waterloo.

Under the proposed system, the 2-day band (green) will get much larger for presort mail and single-piece sent from within 50 miles of a RPDC. Waterloo is more than 50 miles from the RPDC in Des Moines, so the map below applies only to presort, but a similar map would apply to single-piece mail sent from within 50 miles of the RPDC in Des Moines.

Since Waterloo is a qualifying LPC retaining cancellation, there will be an area subject to a 2-day standard, but as you can see from the following map, it’s much smaller than the current 2-day zone and significantly smaller than the proposed 2-day zone for presort.

If we zoom in on northern Iowa, we can get a better sense of how this all works out. Here’s a map of the Waterloo LPC service area, which encompasses ZIPs 504, 506, 507 and 521.

In the future network, single-piece First Class mail that originates less than 50 miles from the Waterloo LPC (the areas in red and orange) and that destinates anywhere in the Waterloo service area (the whole map) would have a 2-day standard. Mail that originates more than 50 miles from the Waterloo LPC (the areas in blue, green and yellow) and that destinates anywhere in the Waterloo service area would have a 3-day standard.

Note that ZIP 506 has an area that's within 50 miles of Waterloo and an area that's more than 50 (the yellow area), which means that the 3-digit ZIP prefix doesn't determine the service standard anymore (as it does now). Also, for some unknown reason, there's the anomaly of Aurora 50607, which is less than 50 miles from Waterloo but has a 3-day standard for its outgoing local mail.

The Waterloo example shows how some "local" mail will have a 2-day standard while some will have a 3-day standard. It's not clear why this would be the case if some post offices within the 50-mile radius around Waterloo don't get an afternoon collection. What differentiates them from post offices outside this radius?

The Waterloo example also raises another question: When the Postal Service says an LPC will retain operations for local mail, does this refer to all the mail sent within the LPC's service area, or does it refer only to mail sent from within 50 miles of the LPC?

As for mail sent from post offices more than 50 miles from both a RPDC and a qualifying LPC, here's a map for Decorah Iowa 52101, the largest city in and county seat of Winneshiek County. Like most places in the country, Decorah won't have any "local" mail that's subject to a 2-day standard. Any single-piece mail sent in Decorah will be delivered in three days at best.

Challenges for the PRC's analysis

These uncertainties about which LPCs will qualify for local mail and which post offices will get an afternoon collection present significant challenges when it comes to analyzing the Postal Service’s estimates for cost savings.

The number of RTO offices determines how many afternoon routes are eliminated and what the resulting cost savings would be. If some RTO offices are exempted from RTO and continue to get the afternoon collection, it will mean less savings from cutting routes.

The work hours for processing will be impacted by what operations are consolidated to an RPDC and what operations remain at the LPC. If some local processing is retained, there will be less cost savings from the consolidation.

This issue came up at the hearing in an exchange between USPS witness Gregory White and John Klingenberg of the PRC staff. Mr. Kingenberg asked about how the cost savings estimates provided in the Mail Processing Facility Reviews (MPFR) would be impacted when cancellation operations are retained rather than removed. The MPFR for Reno, he noted as an example, indicated that the consolidation to Sacramento would save $3.1 to $4.2 million dollars, but some portion of this, White explained, would not be realized if Reno retains its cancellation operation. (Transcript, p. 640)

It's not clear to what extent the Postal Service's cost savings projections already incorporate the 36 cases where local processing will remain local and to what extent the projections might need to be revised.

Changing the RTO status of a large number of post offices would also affect other elements of the Postal Service’s case, including the total volume subject to downgraded standards, the percentages of downgrades (in volume and OD pairs) that are rural versus urban, and so on. All of the data and charts presented in the case would presumably need to be revised once the final list of RTO and non-RTO offices becomes known.

But who knows when that will be? Presumably after the PRC completes its advisory opinion.

Tiers of preferential treatment

In the new network, there will be 59 RPDCs and about 197 LPCs. Twenty-six LPCs will be co-located with a RPDC, so the post offices within 50 miles of these RPDCs will continue to get an afternoon collection and a 2-day standard for local mail. The 36 LPCs in the soon-to-be-published list will retain cancellation operations and process local mail, thereby providing a 2-day service standard for some local ZIP Codes.

This leaves about 135 LPCs that will apparently not retain processing for local mail and therefore be subject to a 3-day standard for all of their "local" mail. It's not at all clear why some LPCs will retain cancellation operations while others will not. One wonders how the Postmaster General will explain all this to Senator Hassan should she learn that local mail operations will not remain in Manchester and White River Junction.

The plan has already been criticized for its two-tier system. Under the current network, all the post offices in a 3-digit ZIP code region are subject to the same service standards for First Class Mail, both single-piece and presort. Under the future network, single-piece mail sent at post offices within 50 miles of the RPDC, plus all presort mail regardless of origin, will get faster, while single-piece mail sent at offices more than 50 miles will get slower.

But the plan also introduces a third tier of service.  Single-piece mail sent from within 50 miles of one of the 36 LPCs will retain a 2-day service standard for local mail, while mail sent from outside this radius will go to a 3-day standard.

In other words: All presort mail and single-piece sent close to the RPDCs will get first-class treatment, mail sent close to a qualifying LPC will get second-class, and mail sent from everywhere else will get third-class. And this is all supposed to be First Class Mail.

There's yet another tier of preferential treatment embedded in Delivery for America. The plan also involves relocating letter carriers from post offices to large Sorting & Delivery Centers, which will often be co-located in LPCs and repurposed P&DCs. The S&DCs make it possible to offer same-day or next-day delivery, but not every community will be close enough to an S&DC to enjoy this benefit. As the Postal Service explained to the PRC during the Public Inquiry into DFA, "These communities will not receive the direct benefits of an S&DC, such as the ability to drop packages for delivery to an entire local market from a single consolidated location." The new S&DC network, explains the Postal Service in its Second-Year Progress Report, “will optimize delivery in our busiest markets.”

Given that the RPDCs, LPCs and S&DCs are almost all located in large cities, it's not hard to see why the plan would be criticized for discriminating against rural areas. That was one of the recurring concerns expressed by the Commissioners in their opening statements at last week's hearing, and it will probably be a significant theme in the advisory opinion, due out at the end of January.

— Steve Hutkins

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