USPS OIG finds problems in S&DC rollout

Steve HutkinsBlog, Featured

The Postal Service has put a hold on consolidating processing facilities, but it has not paused the creation of Sorting & Delivery Centers and the relocation of letter carriers. A few days ago, the Postal Service held open houses for nine new S&DCs that will take 600 carrier routes from 26 “spoke” post offices. In September, 15 more S&DCs are set to launch, and 38 more post offices will lose their carriers.

By the end of September, the Postal Service will have relocated about 3,300 routes from 200 spoke offices to 60 S&DCs — 730 routes during FY 2023 and 2,570 during FY 2024. Another 15 S&DCs will also have launched, but without any associated spoke offices identified yet.

Our unofficial list of S&DCs and spokes with other data, based on lists shared with unions, management associations, and the Postal Regulatory Commission, is on Google Docs. Here’s a map showing these S&DCs and spokes.

One of the goals of the Delivering for America plan is to relocate 100,000 carrier routes to S&DCs, but progress has been slow. At the rate set in FY 2024, full implementation would take almost 40 years. The Postal Service obviously plans to pick up the pace significantly over the next few years.

In the meantime, the USPS Office of Inspector General has issued three reports about S&DCs, two of them over the past few weeks. The reports identify numerous problems with the rollout of the S&DC system so far. One such problem has already led the Postal Service to make a significant change in retail services.

Two of the IG studies found that PO box mail is consistently arriving late at the spoke post offices, delaying the time that mail and packages are available for customer pickup. The IG recommended that the Postal Service adjust the posted time Box up-time, and a couple of weeks ago S&DCs and spoke offices were informed that the up-time would be pushed from 10 a.m. to 12 p.m.

That will make less of the Box mail “late,” but mail and packages will be available a couple of hours later than under the current system. It’s yet another example of how the mail is slowing down under the Delivering for America plan.

Three reports

The first OIG report on S&DCs (No. 23-062-R23, Sept. 12, 2023) focused on the first six S&DCs, which opened in November 2022 (Athens, GA) and February 2023 (Bryan, TX; Gainesville, FL; Panama City, FL; Utica, NY, and Woburn, MA). The report identified several problems with the rollout of these S&DCs:

  • The Postal Service did a poor job communicating elements of the plan to stakeholders, including high-volume customers;
  • S&DC facilities were often under construction when they opened, leading to mobile restroom trailers, temporary breakrooms, and safety hazards like blocked exits;
  • The package sorting machines are fast but have problems rejecting packages, and
  • P.O. Box up-times suffered delays.

The second OIG report (No. 24-025-R24, May 22, 2024) examined the changing role of postmasters at S&DCs and spoke offices. It encompassed five S&DCs (Athens, Bryan, Gainesville, Woburn, and Hanover Park) and their 13 spoke post offices. Again, the IG found several problems:

  • Postmasters at the spoke post offices are concerned that their reduced workload is unsustainable;
  • Removing the carriers has produced excess space in the post offices, and there doesn’t seem to be a plan for utilizing it;
  • A “flawed strategy” for managing the changing roles of spoke postmasters hinders office efficiency.

The third report (No. 23-171-R24, May 28, 2024) focused on the Gainesville and Panama City S&DCs and their seven spoke post offices (Micanopy, Newberry, Youngstown, Lynn Haven, Downtown Panama City, and Panama City Northside). The IG report identified various problems:

  • Cost savings from eliminating highway contract route trips and consolidating carrier routes did not achieve projections;
  • Late PO Box up-time at post offices led to complaints from box holders and cancellations of paid boxes;
  • Priority Mail Express did not meet its service standard, requiring refunds;
  • Attempted delivery mail was difficult to track, causing customer dissatisfaction;
  • A lack of appropriate scans at S&DCs impeded progress toward optimizing truck routes, eliminating unnecessary trips, and ensuring optimal truck utilization.

There’s more about the first OIG report in this previous post. The remainder of this post discusses the second and third reports, but first, a word about a topic that’s not addressed in any of the OIG reports thus far — the longer transit distance between delivery units and routes.

The cost of longer routes

Consolidating 100,000 carrier routes to fewer delivery units was actually the OIG’s idea, as described in a 2011 study and 2012 follow-up report. As explained in these reports, the average transit distance between the post office and first stop for all 230,000 routes is about 2.8 miles. After relocating 100,000 routes to a nearby post office (not a centralized S&DC), the average would increase by 2.2 miles for the relocated routes and 0.9 miles for all 230,000 routes.

The OIG figured that the additional miles and drive times would increase costs for labor and vehicles by $374 million. These costs would be more than offset by cutting carrier support clerk jobs and closing post offices.

The spoke post offices, however, are much farther from S&DCs than from the gaining post offices in the OIG study. For the 200 spokes launching by the end of FY2024, the average distance between the S&DC and spoke offices is about 9.6 miles. The first spokes are relatively close to the S&DCs, so as more spokes are added, the average distance to the route will increase to 12 or 13 miles — about 10 miles more than under the current system — and the average for all 230,000 routes would increase by 4.5 miles. That’s five times more than the increase in the OIG study. It’s not surprising, then, that the additional costs could top $1.8 billion.

Figured another way, the longer distances to the S&DC would add over 620,000 miles to the 100,000 routes annually. At $1.68/mile (the OIG’s estimate), that’s about $1 billion. The extra drive time adds up to 15 million work hours; at $40/hour, that’s $600 million. For transportation and labor, that’s over $1.6 billion in additional costs. (There’s more on these calculations in this post and this one.)

The Postal Service has yet to share any data about these additional costs or how they will be offset by cuts elsewhere.

While many of these routes will be serviced by the new electric vehicles, the longer transit distances will erase much of the environment benefit of electrifying part of the fleet (more on that here). Speaking of EVs, the lawsuit over the fleet purchase plan continues. In late April, fifteen state attorneys general and environmental groups filed a motion for summary judgment, arguing that the Postal Service did not comply with NEPA before contracting to buy EVs from Oshkosh Defense (more on that here).

Continued use of HCR transportation

The Postal Service has said that one way the additional costs of longer routes would be offset is by eliminating the trips made by Highway Contract Route drivers who deliver mail to post offices in the morning and collect it in the evening.

The idea was that the spoke post offices don’t require HCR transportation. In the morning, carriers go directly from the S&DC to their routes, and carriers can transport the PO Box mail to post offices. In the evening, on the way back to the S&DC, carriers can also collect the mail and packages sent at the post office.

As it turns out, however, it’s sometimes been necessary to continue having HCRs transport collection mail from the post office to the S&DCs. That’s because the additional drive time for longer routes would have extended rural carrier hours beyond their contractual agreement.

Transportation Savings for Florida S&DCs (Source: OIG report)

As a result, the IG found that overall HCR trip mileage declined only slightly following S&DC implementation.

Cost savings were also impacted by the fact that it was necessary to add an additional weekly HCR trip between the Panama City S&DC and Pensacola P&DC to accommodate growth in weekend mail volume.

Overall, the OIG found that that “actual cost savings from eliminating HCR trips and consolidating carrier routes did not meet the Postal Service estimates for FY 2023.”

Later Box Up-time

The IG found that during the several weeks under study, the PO Box up-time was late 80 percent of the time, compared to 17 percent of the time for the Florida 1 District overall and 10 percent nationally.

Source: USPS OIG report

The Postal Operations Manual says PO Box up-time should be scheduled at hours that meet the needs of a majority of customers in the local area.” The POM goes on to say, “Postmasters should strive to have all mail in PO Boxes as early as operationally possible to attract and retain customers to this premium mail service.”

The posted PO Box up time is generally 10 a.m., but postmasters at the spoke offices told the OIG that PO Box mail often does not arrive before noon and can arrive as late at 3 pm.

If the mail arrives late during peak window hours, it can have a “cascading effect.” During the busy times, window clerks have less opportunity to work the mail, further delaying its availability to the customer.

Part of the problem, as management at the S&DCs told the IG, is that there aren’t enough clerks at the S&DCs to prepare mail and sort packages, so carriers are leaving late to start mail deliveries, including the delivery of Box mail to post offices.

Another cause for delay is that under the S&DC system, the Box mail goes from the processing center to the S&DC and then to the post office, rather than going directly from the processing center to the post office, along with the carrier mail.

The late box mail has led to complaints from customers, who in some cases have closed their boxes. The IG therefore recommended that the Postal Service change the announced time for box mail, and that’s exactly what’s been done.

New signage at S&DCs and spoke offices

According to a notification dated May 20 (a few days after the Postal Service received a draft of the OIG report), PO Box up-times will be changed at all S&DC and spoke offices to noon, effective June 24. The notice says that 162 current S&DC and spoke sites will be affected, and all future S&DCs and spoke offices will also have a 12 p.m. up-time

The Postal Service has about 21.2 million PO boxes at 33,000 retail units — an average of 677 per post office. Over 94 percentage of these boxes require a fee; the rest are no-fee for those who don’t get home delivery. For the 200 spoke offices that will be in operation by the end of September, the average office has about 750 PO boxes (not all are being used).

If 5,000 post offices become spokes of S&DCs, more than 3 million box holders could end up with up-times later than they currently enjoy. That will cause a lot of frustration and lead many to cancel their boxes, which will impact retail revenues.

No SV scans cause tracking issues

The IG found that the Panama City S&DC doesn’t use Surface Visibility scans, which led to inaccurate truck utilization data. “Without those scans,” said the IG, “the Postal Service cannot accurately measure its progress toward optimizing truck routes, eliminating unnecessary trips, and ensuring optimal truck utilization while meeting service standards.”

The absence of SV scans “also creates uncertainty about the whereabouts and security of mail and impacts the customer experience. For example, the postmaster at the Panama City Beach delivery unit noted that the lack of SV scanning at the Panama City S&DC makes it difficult to know if mailpieces are at the S&DC or in transit.

Tracking items that could not be delivered and that require redelivery or customer pickup has also been an issue. Postmasters and clerks say they’ve had difficulty tracking packages, and it’s not always clear if the package is at the S&DC or the post office, and customers get frustrated with the extra time involved in getting the mailpiece to the right facility.

The attempted delivery mail is transported goes back to the S&DC in the afternoon, and then it goes to the post office the next day, along with PO Box mail. Customers who go to the post office before the PO Box mail has arrived won’t get the item until the next day. Early closing hours on Saturdays add to further delays.

Priority Mail Express Missing Deadlines

The IG found that Priority Mail Express is not meeting its service standard due to the new transportation schedules and routes. When Priority Mail Express is not delivered timely, the customer is entitled to a full postage refund.

Source: OIG report

This section of the IG’s report is heavily redacted, so we’re not told what percent of Priority Express did not meet its service standard or how much money was refunded to customers. Apparently the revenue losses could have been even greater (based on the number of late Express deliveries), but not all customers requested a refund.

Unsustainably low workload for postmasters

Postmasters who relocate to an S&DC have more carriers to supervise, so they’re positions are upgraded, but those in the spoke offices have fewer responsibilities since their carriers are gone. For every postmaster promoted to a S&DC, there will eventually be ten postmasters remaining at a spoke office, so the situation of spoke postmasters is a matter of real concern.

As the IG points out, delivery operations can encompass as much as 85 percent of the post office’s total workhours, so removing carriers from the office can significantly reduce the postmaster’s workload.

Even so, the Postal Service has promised to keep spoke postmasters in their positions and not to reduce their base salary levels. But as the IG points out, reducing their responsibilities “could negatively impact their annual performance evaluation calculation and the ability to achieve related pay incentives.”

The IG suggests that the Postal Service should have developed a detailed plan to deal with this issue by finding ways to expand postmaster responsibilities. But management said it was difficult to do so on a nationwide basis because of “the unique geographical nuances and operational needs of each spoke office…. For example, it may be more beneficial for a spoke postmaster in a suburban/urban office to allocate additional workhours for connecting with local businesses, while it may be more beneficial for a rural office to spend more time on retail transactions.”

The spoke postmasters expressed concerned about the long- term sustainability and productivity of the interim assignments they’ve been given to make up for the workhour loss.

It’s also important to note that the Postal Service has told employee associations that while the levels of the incumbent postmasters will not be reduced due to S&DCs, “If that office becomes vacant or is currently vacant, then the level of the office may change.” In other words, the next postmaster in that position will come in at a lower salary level.

An excessive amount of excess space

One of the issues faced by the spoke postmasters is what to do with all the excess space created by the departure of carriers and the clerks who support carrier operations. Delivery units can occupy more than half the building, so this is a significant problem, especially for larger post offices where there may be thousands of square feet of vacant space.

The IG report doesn’t get into any details about how much excess space is being created by the S&DC plan, but it contains images of the back of two post offices that gave their carriers to the Athens S&DC.

The 2012 OIG study on consolidating letter carriers estimated that each carrier occupies about 366 square feet in the back of the post office. The Hull, Georgia, post office has 2,320 square feet, and it gave up 5 routes; using the IG’s estimate, that’s about 1,830 square feet — nearly 80 percent of the building. The Watkinsville post office has about 8,256 square feet. It gave up 19 carrier routes, 27 carriers, and 4 clerks — perhaps 7,000 square feet, about 85 percent of the building. Those estimates may be at the high end, but it’s very likely that in both of these offices half the building has become vacant.

So far the Postal Service has identified about 200 post offices that will be spokes by the end of September 2024. About 3,300 carriers will be relocated from these offices. Using the OIG estimate of 366 sf per route, that’s 1.2 million square feet of excess space — about two-thirds of the 1.8 million square feet occupied by these 200 offices. Using a more conservative estimate of 250 square feet per route leads to excess space of over 825,000 square feet — about 45 percent of the total square footage.

If 100,000 carrier routes were eventually relocated to S&DCs, it could leave something on the order of 25 to 35 million square feet of excess space in the thousands of post offices that lose their carriers.

Here’s a table snowing the 200 spoke offices, their interior space, and two estimates for how much excess space may have been created by removing carrier operations. (View on Google docs here.)

No plan for the space

The Postal Regulatory Commission raised the issue of excess space back in August 2023 as part of its public inquiry on Delivering for America. The Commission asked the Postal Service to “describe any plans related to the utilization of excess space created at Post Offices due to the transfer of delivery functions to S&DCs. With your response, please provide any relevant studies or analyses detailing these plans, if applicable.”

In its response, the Postal Service said that it would evaluate facilities “to determine the proper use of any excess space, which could include utilizing that space to provide new services to commercial entities or other government.” But the Postal Service also said it did not currently have plans regarding the utilization of any specific excess space. Needless to say, the Postal Service did not provide any studies or analyses on the matter.

On an S&DC list shared with the PRC in March 2024 (S&DC analysis, tab “Qs 3, 4 Response”), there’s a column showing the current use of the building. In nearly every case, the list says, “Retail and PO Box delivery remain in facilities as applicable. Back-office space is being cleaned up so it can be reviewed for potential future opportunities.” The table doesn’t say what these future opportunities may be.

Three of the facilities on that list — the Northside Carrier Annex and the Martech Station Carrier Annex, both in Atlanta, and the Evergreen Carrier Annex in Colorado — didn’t have a traditional post office, so removing the carriers left the buildings completely vacant. For these annexes, the table says, “The Facilities organization will review to see if the building is eligible for non-renewal or termination of a lease or a potential to be sold if USPS owned.” The Postal Service owns the Atlanta annexes, so they’ll probably be sold, and it’s been leasing the Evergreen facility.

Evergreen Carrier Annex, now for sale (Source: Loopnet)

The Evergreen property is now for sale by its owner. According to the real estate listing, the lease with the Postal Service runs through June 2027, and the Net Operating Income (NOI) is $149,500, which is approximately the annual rent. Unless there’s a way to terminate the lease before 2027, the Postal Service will end up paying $450,000 for an empty building it’s no longer using.

When the IG asked the spoke postmasters about the excess space issue, they stated that “they were unclear about how to utilize the newly created excess space at their offices…. While some of them stated this space could be used for mail carrier training activities or retail lobby enhancements — such as passport services, parcel lockers, and self-service kiosks — they were not aware of related analysis or decisions.” In its report, the IG therefore recommended that the Postal Service develop a plan for the space and consider using the spaces for such purposes.

In reviewing a draft of the IG’s report, the Postal Service said that “while Management agrees to review space utilization at offices impacted by S&DC implementation, there are key factors the OIG overlooked when making this recommendation such as cost-effectiveness, leased vs owned facilities, and demographic/geographical nuances. In addition, the back office space created from excessing carrier routes does not fall within the retail footprint and therefore adding self-service kiosks, passport services or PO Boxes — as the OIG suggested — does not make good business sense and would be cost prohibitive.”

If the Postal Service does not appear to be very interested in putting this space to use, it may be because the excess space will eventually have a purpose. It will serve as justification for relocating or closing the post office. We’ll eventually hear about many post offices being reviewed “to see if the building is eligible for non-renewal or termination of a lease or a potential to be sold if USPS owned.”

— Steve Hutkins

For more about S&DCs, see our Delivering for America Dashboard.

Related posts

Congressional leaders tell PRC the USPS is on a course that threatens its future

Steve HutkinsBlog, News

Several members of Congress have written a letter to the Postal Regulatory Commission concerning the Commission’s review of the system for regulating rates and classes for market dominant products and in particular the rate hike proposed in April.

The letter is signed by Rep. Jamie Raskin (Ranking Member of the House), and Rep. Raja Krishnamoorthi, Rep. Gerald E. Connolly (Ranking Member of the Subcommittee on Cybersecurity, Information Technology, and Government Innovation), and Rep. Kweisi Mfume (Ranking Member of the Subcommittee on Government Operations and the Federal Workforce).

Rep. Raskin and his colleagues note that the Postal Service has proposed yet another rate hike, which would increase first-class Forever stamp prices from 68 cents to 73 cents.”This marks the sixth time since March 2021 that the Postal Service has increased postage rates,” says the letter.

“This rate hike, if implemented, comes at a time when postal delivery performance and mail and package volumes are experiencing historic lows,” says the letter. “We believe that this trajectory is setting the Postal Service on a course that threatens its future as an effective, efficient, and vital American institution.”

The letter goes on to review the cost of postage since 2007, as well as recent declines in delivery performance and volume. The Congressmen conclude their letter as follows:

“We are concerned with the extent to which the pace of these postage price changes may contribute to volume declines in excess of earlier projections on total mail volume.

“It is imperative that the Postal Service meet its service delivery standards, curb excessive mail volume declines, and prevent the Postal Service from entering unrecoverable financial peril, or else put at risk the livelihood of the millions of Americans who rely on the Postal Service for their medication, social security checks, mail-in ballots, and veterans’ benefits. We request that you consider these issues seriously as you review the system for regulating rates and classes for market dominant products.”

Read the letter here (it’s on the PRC website here).

Read more at Government Executive here.

With USPS plant consolidations on pause, PRC preps for an advisory opinion: A preview of what’s ahead

Steve HutkinsBlog, Featured

[UPDATE MAY 21, 2024: The Postal Service has posted a letter (dated May 20) from Postmaster General DeJoy to Senator Gary Peters clarifying which operational changes are on pause and which are not. The letter includes four lists: (1) 59 MPFR studies and their current status; (2) 13 RPDCs underway; (3) 20 LPCs operational or soon to be operational, and hence not part of the pause; and (4) 28 S&DCs that will launch in June and September, which are also not included in the pause. (Our spreadsheet with all the latest update lists is on Google Docs here; note the various tabs at the bottom. Our version of the MPFR study list, along with related lists discussed below, is here.)

The letter indicates that of the 56 consolidations approved by MPFR studies, all are on pause except for those already implemented — Augusta and Macon to Atlanta, and Medford and Eugene to Portland — plus Fort Wayne to Indianapolis, to be implemented soon. Several other consolidations have already been implemented or will be implemented despite the pause, but the Postal Servicer says these were not subject to the MPFR process (they’re included in the LPC list). The new MPFR list includes the “level of investment” for the 56 consolidations that were approved after a MPFR review (see below). The total investment is between $430 and $550 million.]

THIS WEEK the Postal Service announced that it was putting the plant consolidations on hold, at least until January 1, 2025. In a letter to Senator Gary Peters (on May 9), Postmaster General DeJoy said he would slow down implementation of his “Delivering for America” plan and consult with Congress and the Postal Regulatory Commission as he moved forward.

In his letter, DeJoy continued to defend his 10-year plan, saying that it would improve working conditions and lead to significant cost reductions, and it would not involve layoffs or be “consequential to service.” He acknowledged that he’d been unable to convince Congress of all this, but blamed that on “misconceptions” based on how consolidations were done in the past.

DeJoy did not say he would also pause the other network changes now underway, but he did tell Peters that he would continue “to evaluate any additional changes we have underway and will advise you of our approach to satisfy any of your concerns regarding their engagement or any filing that might be warranted with the PRC.”

The Postmaster General thus seems to be softening his position about the need for a PRC advisory opinion on DFA. It’s a big step. For months, he has been complaining that the PRC was acting outside of its authority by initiating a Public Inquiry docket on DFA and by asking inappropriate questions about it. The Postal Service has repeatedly told the PRC that an advisory opinion is not required for the DFA initiatives now underway. That position may no longer be tenable.

Proposed legislation

Some members of Congress do not appear to be satisfied with simply a pause on plant consolidations. There are currently four pieces of proposed legislation that would further restrict the consolidations:

  • HR 8000 (Rep. Golden) “Timely Mail Delivery and Postal Services Protection” Act prohibits consolidations of mail process facilities until the PRC issues an advisory opinion;
  • HR 8045 (Rep. Hageman) “Postal Operations Stay Timely and Local” Act prevents the Postal Service from closing, consolidating or downgrading any processing and distribution center in a State “if such action would result in no such center being located in that State or negatively impact mail delivery”;
  • HR 8040 (Rep. Budzinski) “To limit the closure or consolidation of any United States Postal Service processing and distribution center in Postal Service regions that have failed to meet certain delivery standards, and for other purposes” prohibits consolidations in regions where service performance during the preceding year falls below 93 percent for 2-day mail and 90.3 percent for 3-5 day mail;
  • (Sen. Tester) “Protecting Access to Rural Carriers for Every Location (PARCEL) Act)” would permit a consolidation only if does not result in processing operations being relocated outside of state boundaries or harming local mail delivery and only after a geographical review is completed and public input reflects favorably on the decision to move operations.

The proposed bills are identified in a petition against DeJoy’s modernization plan, sponsored by Communities and Postal Workers United, here.

USPS shows cause

Earlier this week, the Postal Service responded to the Postal Regulatory Commission’s order directing the USPS to “show cause” why it hasn’t requested an advisory opinion on initiatives under the Delivering for America plan. (The Response is on the PRC website here, accessible directly here.)

The USPS Response argues that the Commission doesn’t have the authority to order the Postal Service to request an opinion or “show cause” why it won’t. According to the statute (3661(b)), the Postal Service, not the Commission, has discretion over the timing and scope of a request for an advisory opinion.

The only circumstances under which the Commission could compel the Postal Service to request an opinion would be after the PRC had the opportunity to carefully review and consider the information provided by the Postal Service. In the current case, however, the Postal Service says the Commission has pre-judged the issue.

The Postal Service also takes exception to the Commission’s order saying that if the Postal Service chooses to request an advisory opinion, it must do so within 40 days. That time frame, says the Postal Service, is arbitrary and insufficient to produce a reasoned plan. In any case, says the Response, if the Commission believes the Postal Service is not in compliance with relevant statutes, it can file a formal complaint through a designated officer.

All that said, the Postal Service proceeds to acknowledge that it is “actively considering the scope and contents for a request for an advisory opinion.” But before doing so, it needs “to understand the issues that are leading to disconnects between the DFA Plan and its execution.” In other words, to what extent are the spikes in delivery problems of the past few months being caused by initiatives like the plant consolidations and to what extent are other factors causing the problems, like the bankruptcy of a supplier that operated numerous contract-operated facilities (STCs).

The Response reviews the four DFA initiatives underway that have become matters of concern to the Commission, as expressed in numerous PRC Information Requests:

  1. consolidating facilities by downgrading some P&DCs to Local Processing Centers (LPCs) that handle only incoming local mail, while upgrading other P&DCs to Regional Processing & Distribution Centers (RPDCs) that handle all incoming and outgoing mail for the region;
  2. eliminating evening collections at thousands of post offices, generally small, rural offices (Local Transportation Optimization);
  3. consolidating letter carriers from post offices to Sorting & Delivery Centers (S&DCs); and
  4. insourcing some Highway Contract Route transportation between facilities.

The Postal Service argues that S&DCs and insourcing will not have an impact on postal services that would require a request for an advisory opinion, while the first two may. With that in mind, the Postal Service now says that the plant consolidations and LTO implementations that have taken place so far are essentially just “pilot testing” and they are “best conceived as probative tests that will reveal whether such a request is necessary and will help determine the contents of such a request.”

The Response concludes, “The Postal Service will continue its evaluation of the RPDC/LPC network and LTO initiatives and will request an advisory opinion, at such time and in such manner as required by Section 3661(b).”

The Commission quickly responded to the Postal Service’s filing by posting a notice on its website saying it’s reviewing the Response. The Commission is likely to say that an opinion is necessary, and it may give the Postal Service more time to file a request.

Beyond that, the Commission may also argue all the components of the plan are interrelated (the Postmaster General has said as much), so it’s insufficient to submit some initiatives to an advisory opinion review and not others. We’ll have to see how that issue plays out. The Commission is already continuing to ask more questions about the insourcing, as indicated by an Information Request posted this week.

By the way, there’s an excellent interview, hosted by Bob Levi, NAPS Director of Legislative and Political Affairs, with PRC Chairman Michael Kubayanda about the advisory opinion issues on NAPS Chat.

What’s not on pause?

Unless the Postal Service broadens its pause on DFA initiatives, only the plant consolidations will be on hold.

The S&DC plan will apparently proceed in June, when nine new S&DCs are scheduled to launch, and in September, when another ten S&DCs will go active. About two dozen “spoke” post offices are set to lose their carriers over the coming months to some of these S&DCs.

On the other hand, the launch date for twenty post offices that had been scheduled to lose their carriers to S&DCs in September has been canceled or postponed, so perhaps this initiative is slowing down too.

Overall, by the end of September, there may be about 70 S&DCs and 225 spoke offices, with 3,750 routes being relocated — a long way from the goal of creating several hundred S&DCs and thousands of spoke offices, and consolidating 100,000 routes to the S&DCs. (For a list of S&DCs and spokes along with their implementation dates, see our network update page here, and note the tab for “Recent changes 4/19/24.”)

It’s not clear how far along the transportation insourcing has proceeded, but it’s probably been restricted to those places where the Local Transportation Optimization has been implemented, since they seem to be complementary initiatives.

USPS presentations indicate that so far about 1,130 post offices have lost their evening collection under the LTO initiative: 319 in Virginia and North Carolina in October; 390 in Wisconsin and parts of Michigan in January; 226 in Oregon and southern Washington in February; and perhaps 200 in New York’s Mid-Hudson region on May 6.

The next LTO implementation is supposed to occur in Columbus, SC, in mid-June, with as many as 270 post offices losing the evening pickup. Maybe that will happen, or maybe it will be postponed. Either way, the implementation schedule is turning out to be much less aggressive than announced back in January, when it seemed that over 10,000 thousand post offices would lose their evening collections by the end of September.

All of which is to say it may not be necessary to issue a formal statement pausing these other initiatives. They seem to be moving ahead much more slowly than originally planned.

Unpacking the MPFRs

It was just a couple of weeks ago that the Postal Service completed the Mail Processing Facility Review (MPRF) process on 58 of the 59 processing facilities it had been reviewing for consolidation. Until DeJoy announced the pause, it appeared all but certain that the implementation of these consolidations was imminent.

According to the list of MPFRs and accompanying documentation posted on the USPS website, 56 of the 59 studies ended with a final determination to proceed with the consolidation.

There were three exceptions: The MPFR for Bemidji, MN, hasn’t progressed past the initial notice stage, the decision to consolidate the South Suburban P&DC to the Chicago South RPDC was not implemented (South Suburban will instead take some operations from Peoria), and the review of the Buffalo facility ended with a decision not to implement a consolidation to the Rochester P&DC.

For each of the 56 consolidations that were approved to proceed, the losing facility would remain open as a Local Processing Center that handles incoming mail to local ZIP codes. The outgoing mail from these areas will be transported to the “gaining” P&DC for processing. In most cases, the losing P&DC will also co-house a S&DC, with carriers and probably a parcel sorting machine using the space freed up by removing the outgoing operations.

Nearly all of the 41 gaining P&DCs on the list will eventually be designated as one of the 60 Regional Processing & Distribution Centers (RPDCs) in the new network. The final MPFR reports, however, usually do not identify a gaining P&DC as an RPDC. The RPDCs identified as such in the MPFRs include Jacksonville, Chicago South (Forest Park), Greensboro, Atlanta (Palmetto), Charlotte, Portland (OR), St. Louis, St. Paul, and the new facility in Indianapolis. (A few others have been made public in notifications to stakeholders, including Houston, Santa Clarita, Boise, and Richmond.) For all the other MPFR studies , the Postal Service apparently considers it premature to identify which gaining P&DCs will become RPDCs.

The final determination report confirms, by the way, that the location of the new Indianapolis RPDC is the Indianapolis Central Logistics Park on Brookville Road (shown above).

The list on the USPS website, it should be noted, doesn’t include all the consolidations that have been implemented. The Richmond RPDC took over operations from Norfolk and Rocky Mount with no MPFR. Similarly, the Atlanta RPDC took over operations from Atlanta (Crown Road) and North Metro (Boggs Road), again without doing a RPDC. The Postal Service has told the OIG that some consolidations do not fall within the scope of the agreements with unions to conduct a MPFR (as discussed in this OIG report on the Richmond RPDC).

In his letter to Senator Peters, the Postmaster General says that “with one or two exceptions,” the consolidations have not yet been implemented. In its responses to the “show cause” order filed with the PRC this week, the Postal Service said that implementation has occurred at four P&DCs: Augusta and Macon to Atlanta, Eugene and Medford to Portland. A list prepared by the APWU back in February shows completed implementation for those four but also Provo to Salt Lake City, Trenton to Philadelphia, and Minneapolis to St. Paul.

Overall, it’s not exactly clear which of the plant consolidations will be impacted by the pause. Some have already been implemented, some are well along in the pipeline, and some fall outside the requirement to conduct a MPFR and aren’t included in the 59 studies . The APWU has consequently “initiated a detailed information request to obtain the full and accurate list of consolidations that will be put on hold as well as any potential impact on excessing of employees from one facility to another.” The PRC may ask for a similar list just to clarify what’s on pause and what is not.

Here’s a map of the losing and gaining facilities in the MPFR list.

Cost savings projections

DeJoy’s letter indicates there’s an attached list of the impacted sites that includes the status of the MPFR study, the final decision, the level of investment, and the cost savings. But for some reason the attachment hasn’t been made public.

Here’s a list with the cost savings data extracted from the final determinations posted on the USPS website. Note that some losing facilities are listed twice because they’re splitting the consolidated operations to two different gaining facilities. (Scroll to right to view the full table, or view on Google Docs here.)

In his letter to Peters, DeJoy says that consolidations would save between $133 and $177 million. The table shows almost exactly that — a total cost savings between $134,724,000 and $174,642,161.

The MFPR reports break down the cost savings for labor in terms of projected reductions in work hours. Much of the data is redacted, but overall, it appears that each eliminated position represents a cost savings of about $82,000 (that’s about 1800 hours per year at $45/hour for wages and benefits).

If one uses the average of the high and low projections, eliminating 830 positions (see below) would reduce costs by about $68 million — roughly the sum of cost savings for mail processing, management and maintenance.

Here’s a chart showing how the savings breaks down according to the various cost categories: mail processing, management, transportation, and maintenance. The chart uses the averages of the high and low projections in the final determination notices.

These consolidations represent the first phase of a process that may eventually involve consolidating operations from about 150 P&DCs to the 60 RPDCs. Extrapolating from the current data on 56 consolidations would lead to a total cost savings of about $400 million annually for 150 consolidations.

There may be more LPCs than 150, and there may be other facility consolidations in the plans that don’t involve turning the facility into an LPC, so overall the Postal Service may be figuring that consolidations could save $500 or $600 million annually.

The 10-year plan shows a total savings of $5 to $7 billion for mail processing initiatives, plus $7 to $10 billion for transportation savings, which includes both savings on plant consolidations and ending evening collections under the LTO plan.

Impacts on employees

For each of the MPFRs, the final determination notices say, “There will be no career layoffs as part of this initiative. The Postal Service is a responsible employer and will be working closely with the unions and management associations to work through this initiative. The Postal Service will follow requirements of the collective bargaining agreements where they apply and all applicable postal policies.”

While there may not be any layoffs, a large number of employees will clearly be impacted, and many will be leaving the Postal Service.

The 56 completed MPFRs show that a total of 829 positions would be eliminated — 753 craft and 76 management. Extrapolating to a possible 150 consolidations would bring the total to something on the order of 2,200 positions eliminated.

The numbers for eliminated positions represent the net changes and don’t reflect how many employees would actually be impacted. A total of 2,891 craft positions would be eliminated at the losing facilities, while 2,195 craft positions would be added at the gaining facilities.

Those losing their jobs at a losing facility will have the opportunity to take one of the positions added at a gaining facility, but for many, that will be impossible. The average distance between the gaining and losing facilities is 140 miles. In some cases, it’s over 200 miles. That’s much too far for a daily commute. The alternative is relocating to a new city, which will be impossible for many of those with families, mortgages, and a spouse with another job. Many of the added positions at the gaining facilities will thus be filled by new USPS employees.

Impacts on service

The final determinations say that the consolidations will not impact postal services. Retail and business mail acceptance services currently provided will not change, collection box times will not change, and service standards will not change. Some origin/destination pairs (SCF to SCF) will receive service performance upgrades, and there will be no service standard downgrades.

The MPFR notices do not specifically address the widespread concern that local mail that has been processed in a losing P&DC will be need to be transported to a gaining facility (soon to be an RPDC) for processing, then returned to the losing facility (soon to be an LPC) for delivery to local ZIP codes. In many cases, that would seem to add a day to delivery times.

The service standard for local First Class Mail is two days, yet the service standard for mail sent between the ZIPs of many of the losing and gaining facilities is three days. Of the 56 consolidations with a decision to proceed, there are 23 for which there’s a 3-day standard for mail sent from the ZIP of a losing facility to the ZIP of a gaining facility. (See the far-right column in the employee impact table above for the list.) Here are a few examples:

  • Grand Junction CO 81505 to Denver CO 80266 (253 miles)
  • Missoula MT 59801 to Spokane WA 99224 (204 miles)
  • Yakima WA 98903 to Seattle WA 98168 (153 miles)
  • McAllen TX 78501 to San Antonio TX 78284 (244 miles)
  • Casper WY 82609 to Billings, MT 59101 (280 miles)

If it takes three days to send a letter from Grand Junction to Denver — a one-way trip — how will the Postal Service meet a two-day standard for mail sent within the Grand Junction service area if it has to travel to Denver and then back to Grand Junction?

Implementation costs

The MPFR final determinations include a section on “one-time costs.” These includes Mail Processing Equipment (MPE) Relocation Costs, Building Modifications, Prep on Workroom Floor, and Employee Relocation. For four of the consolidations, the MPFRs show one-time costs for equipment relocations: Augusta, $220,000; Medford, $390,000; Greenville, $84,000; and Raleigh, $84,000. For all the other MPFRs, the line for “one-time costs” shows $0.

These one-time costs do not appear to be the “level of investment” in the consolidation that DeJoy refers to in his letter to Senator Peters. These costs could be substantial. They include costs for new high-speed sorting equipment and workplace amenities, such as new lighting, renovated bathrooms, and breakrooms.

The Postal Service has previously shared a list showing the capital investments for about 100 Sorting & Delivery Centers.  Some of these facilities are the losing P&DCs in the MPFRs, so apparently the costs for repurposing them as S&DCs is not included in the one-time costs for the consolidations.

The total capital investments for 100 S&DCs was over $460 million. Consolidating 56 processing facilities could cost even more.

In fact, the creation of the new RPDCs in Atlanta, Richmond, and Indianapolis was extremely costly. According to a report on cost reduction initiatives shared with Congress and the PRC, the Postal Service committed a total of $125.8 million to build the Atlanta RPDC, $86.7 million for the Charlotte RPDC, and $149.9 million for the  Indianapolis RPDC.

[UPDATE, 5/21/24: The Postmaster General’s letter to Sen. Peters includes the levels of investment for most of the MPFR facilities. The total for 52 facilities ranges from $430 to $550 million. See the main table, tab “levels of investment.”]

The public is heard

The fact that only a couple of the MPFRs led to a decision not to implement the consolidation suggests that the process has been mostly pro forma. The decision to proceed was made before the public phase of the process began, as those who attended the public meetings could infer from the way the meetings were held — a brief slide presentation by postal officials, with very little actual information being shared and no responses from postal officials to questions (“We’re just hear to listen”). It didn’t seem as if the Postal Service was listening at all.

The public comments made at the meetings and in writing (usually via an online survey form) do not appear to have had much impact on the final determinations. The summaries of the comments included in the MPRF final decisions list categories of comment — employee, facility review concept, post office operations, union, safety, service, and other — along with the number of comments in each category. But the content of the comments is not shared or even discussed.

Buffalo rally (photo credit Mitch Nowakowski)

It’s noteworthy that the one case where the final determination was not to proceed with the consolidation was the Buffalo P&DC, which was to be consolidated into the Rochester RPDC. The Buffalo decision was apparently the result of lobbying by Senator Chuck Schumer, who himself took credit and declared victory when the Postal Service announced it wouldn’t proceed with the consolidation.

Now that the Postal Service has put the consolidations on hold, the many elected officials who stood up for their P&DC are similarly claiming credit.

Senators and Representatives clearly deserve thanks for the Postmaster General’s decision to pause the consolidations, but they themselves were under pressure from elected officials in the impacted communities, the PRC, the OIG, industry stakeholders, postal management associations, postal unions and workers, and the public.

The last straw was probably the disastrous drop in service performance in those districts where consolidations have taken place — notably Virginia and Georgia.

On Friday of this week, DeJoy responded to a letter from Georgia’s Senator Jon Ossoff demanding an update on the situation in his state by May 17. DeJoy outlined the numerous steps being taken to address “the significant drop in performance.” Based on recent service performance scores in Georgia, it looks like will be a while before the problems are fixed.

In any case, the national scope of the mail delays has made it clear that DeJoy’s network transformation isn’t quite ready for prime time.

— Steve Hutkins

(Featured photo: Indianapolis RPDC at the Indianapolis Central Logistics Park)

An update on USPS service performance in Georgia

Steve HutkinsBlog, Featured

Mail delays continue to be a problem in Georgia. Service performance scores have improved since bottoming out in March, but they are still very poor, and they’re the lowest in the nation by far.

At a contentious Senate hearing on April 16, Senator Jon Ossoff of Georgia questioned Postmaster General DeJoy about the persistent delays that followed the opening of the new regional processing center in Palmetto, outside of Atlanta. DeJoy said it would take about 60 days for scores to return to normal. Ossoff told DeJoy that if the problem weren’t fixed in weeks, not months, “I don’t think you’re fit for this job.”

A few days before the Senate hearing, Ossoff had sent a letter to the Postmaster General, signed by six other elected officials in Georgia, including Senator Raphael Warlock, demanding answers about the mail delays. The letter set a deadline of Friday, May 10, for DeJoy to respond. Senator Warnock’s representatives confirmed to The Atlanta Journal-Constitution that as of late Friday they had not received a formal response.

On May 9, Ossoff wrote a second letter to the Postmaster General, this one requesting an update on service performance in the Georgia District.  “At the hearing,” he wrote, “you told me that my constituents should start seeing service improve ‘now’ and that ‘we will get to where we need to be in about 60 days. Please provide me an update on the current on-time delivery statistics in the metro Atlanta area within one week.

DeJoy’s response is due tomorrow. Here’s a preview of what the Postal Service may report. It’s based on data on the USPS Service Performance Dashboard.  (The most recent data is for the week of April 27 – May 3. The Postmaster General may be able to provide data for last week as well.)

Here’s a graph showing on-time performance for First Class mail (composite).

Performance scores dropped precipitously in mid-February, the same week the Palmetto facility opened, and then a couple of weeks later they started to improve. The scores for both inbound and outbound mail are still well below where they were before the Palmetto facility opened, but they were headed in the right direction — until the week of April 20, when they took another downturn.

These composite scores include both presort and single-piece. Presort, which accounts for about 75 percent of First Class mail, always scores higher, which buoys the composite scores. Here’s a chart separating presort and single-piece mail for inbound mail:

In mid-March, the score for single-piece mail inbound dropped to 25 percent. As of the week of April 27-May 3, only 40 percent of this mail was on-time.

If one digs still deeper into the single-piece mail, the delivery problems become even more apparent.  Here are the charts for single-piece with service standards of 2, 3, 4 and 5 days.

The scores for 2-day mail, both inbound and outbound, are the lowest of all service standard categories. Also called turnaround mail, this is essentially mail that originates and destinates in the Georgia district, so it doesn’t have far to go. It’s not clear why this mail scores so low, but there are a couple of possibilities.

One is that Local Processing Centers in Macon and Augusta are sending all their outgoing mail to the Palmetto RPDC. The local 2-day mail then goes back to Macon and Augusta for delivery. That could add a day to delivery times and make it very difficult to achieve a 2-day service standard.

Another possibility is that the Local Transportation Optimization plan was implemented in Georgia at the same time the plants were consolidated to the Palmetto facility. Under LTO, mail sits overnight at post offices, waiting to be collected in the morning when the day’s mail is dropped off. For the 2-day mail, the first day is thus spent at the post office, so it would not be surprising if much of it failed to meet a 2-day standard.

It’s noteworthy that there’s a significant difference between inbound and outbound scores for all service standards, particularly 4-day and 5-day mail. Inbound and outbound scores are usually about the same, but in Georgia the outbound scores have been significantly lower. It’s not clear why that this has been happening.

In any case, as these scores show, the Postal Service continues to have serious problems in Georgia, ten weeks after the Palmetto RPDC opened. Given the downturns in most of the scores over the last two weeks reported on the dashboard, it appears that it will take some time before on-time scores are back to anything like normal in Georgia.

— Steve Hutkins

Related posts:

 

Missing mail, delayed packages: How USPS woes could impact Georgia election

Steve HutkinsBlog, News

Savannah Now: Systemic issues at the new U.S. Postal Service center in Palmetto, Georgia have left customers frustrated, with some waiting for weeks for their mail to be processed.

The USPS center, which opened Feb. 24, has experienced problems from the start, from lost mail to packages that get rerouted right before arriving to their destination. Only 36% of its inbound mail is delivered on time.

But the problem extends far beyond receiving packages on time. The delays have gotten so bad that officials are now worried they could impact people’s ability to vote by mail-in absentee ballots during Georgia’s primary election this month.

Absentee ballots have taken on a greater role since the 2020 election, when many voters opted to cast their ballot by mail during the height of the pandemic. The practice continued in 2022 – over 6% of all Georgians who voted in the 2022 general election did so using absentee ballots.

That chunk of the electorate could go underrepresented in Georgia’s primary election if USPS does not resolve its issues soon. But how did things get this bad?

Read more: USPS Delays Could Impact Absentee Voting in Georgia’s Primary Election

Take on Wall Street leader takes on Louis DeJoy and the Crisis at USPS

Steve HutkinsNews

Corporate Crime Reporter: Postmaster Louis DeJoy’s ten year plan for United States Postal Service (USPS) has resulted in slower mail, higher prices, and fewer hours at rural post offices.

To help us understand what’s happening at the post office, we dialed up Porter McConnell of the Save the Post Office Coalition, which is hosted by Take on Wall Street.

The Save the Post Office Coalition includes about 300 organizations that run the gamut from unions, faith groups, to retired postal workers, Indivisible chapters, MoveOn, Color of Change –  pretty much every group that cares about the post office and wants to see it protected and expanded.

Did DeJoy come in with an explicit privatization campaign?

“He was smart to not mention the p word,” McConnell told Corporate Crime Reporter in an interview last month. “But the Trump administration’s Office of Management and Budget (OMB) put out a report about the broader state of government in which they explicitly called for the privatization of the postal service. That was a year and some change before DeJoy was appointed in 2020. Steven Mnuchin headed a task force. There was so much push back to the call for privatization in that prior report that the task force didn’t use the p word when they came down with their recommendations for the postal service.”

“However, if you have the same policies that lead to a market exodus and you get a smaller, weaker postal service, then it becomes ripe for selling off. You can make the case that the private sector would do a better job. And then you contract it out. It was everything but the punch line.”

How specifically was DeJoy paving the road to privatization?

“Fast forward to when he came. If you are not a postal insider, it wouldn’t necessarily raise the alarm except that the results were immediate. He came in in June 2020. By July 2020, he had a policy stating that the postal trucks were going to leave on time no matter how full they were. The previous mandate was that the letters were the most important thing. And you would wait around until the truck was full and then you would go. It was a thing where they were sending half empty trucks and mail wasn’t getting on the trucks. It was a false efficiency. And the result was that the mail was delayed for a long time.”

“There were also ill conceived cost saving measures like no more overtime. Overtime had become integral to the USPS. It was part of the work culture that delivering the mail was the thing. If you needed to pay over time you paid overtime to meet the performance standards.”

“He had those kinds of policies that slowed down the mail. They were false efficiencies. If you build unreliability into the system, people are going to exit the system — especially consumers of more lucrative mail. Packages will start exiting the system.”

“By making delivery times worse and by charging higher prices, you create this death spiral. And the most aggressive and fastest price hikes have occurred since DeJoy came on. Much of that is incredibly poorly timed. You lower the quality of the product and you raise the price, there will predictably be an exit from the market.”

“And DeJoy recognizes this and says it publicly. He says – we are just speeding up the inevitable. Snail mail is dead. And that’s not the transition that you want as a leader of public service. And try telling that to places that are not being served by private carriers. Or people like seniors and veterans and people living with disabilities who rely on the mail for their medicines – obviously we are headed to a new future and you are not part of it.”

He’s also consolidating sorting facilities to the detriment of on time delivery.

“In two cities where it has been most implemented – around Atlanta, Georgia and around Richmond, Virginia – the mail standards have dropped off a cliff. During one week this March in Georgia, just 25% of first class mail was on time. That’s unheard of for the postal service.”

“It’s akin to the decline in service if there is a natural disaster. The immediate impact of this restructuring has been catastrophic which is why members of Congress really gave it to him last week.”

“The idea is that if you make sorting a regional function and take it away from individual post offices, you are going to get efficiency somehow. But what it has resulted in is mail will go from Nevada to a sorting facility in California and then back to Nevada.”

“They are consolidating sorting and distribution into regional centers. There is a question of jobs and real estate. DeJoy has said – nobody is losing their jobs. However, if you offer someone a choice of a two hour commute each way, for many it’s not practical. So yes, you might have a job two hours away. But that commute is expensive and impractical – all of the reasons why humans would not want to commute four hours a day to get back and forth to their jobs. It’s inevitable that you will have attrition.”

“The other thing that is going on is that you have freed up all of this space in the back of post offices around the country where sorting used to take place. And then the question becomes – maybe we should close this post office? Maybe it’s less necessary. Already, many post offices have turned from being owned by USPS to being rented in a strip mall. It’s an additional chipping away at the physical plant.”

Read more: Porter McConnell on Louis DeJoy and the Crisis at USPS

PRC chairman Kubayanda says USPS is in a ‘nosedive’

Steve HutkinsNews

Linn’s Stamp News: The productivity of the United States Postal Service is in a “nosedive … that’s stunning … and that cannot continue forever,” Michael Kubayanda, chairman of the Postal Regulatory Commission (PRC), told Linn’s Stamp News May 2 in a wide-ranging interview at the PRC headquarters in Washington, D.C.

A significant deterioration in service performance, even more than the twice-a-year postage rate increases that are being implemented under Postmaster General Louis DeJoy’s Delivering for America plan, is the primary source of complaints to the PRC from members of Congress and the general public, Kubayanda said.

The Postal Service reported in late January that only 84 percent of first-class mail was being delivered on time against the agency’s own reduced standards, a nearly 2 percent decrease from the previous fiscal quarter.

Standstills at sorting centers in Houston, Texas; Atlanta, Ga.; Richmond, Va., and other cities have drawn the ire of congressmen and customers alike.

“I have noticed, and I’ve heard from friends, colleagues and so forth, some of whom work in public policy, that there’s been a spike in really noticeable problems,” Kubayanda said. “You’re expecting something in a reasonable period of time. And then items get lost, or it takes maybe 17 days when you’re anticipating two days.”

“I have a close family member who sent a check from Williamsburg, Va., that got to Raleigh, [N.C.], two months later,” Ashley Poling, a member of the PRC, said during the interview.

“My own Christmas cards, I have to admit, I was a little late sending them this year,” Poling recalled. “I sent them from my family’s house in Virginia and they got to my friends in [Washington, D.C.,] a month later. So, you know I’m not alone.”

“You can’t miss it, it is acute, and it’s a huge problem,” Kubayanda said. “You’ve heard about the issues with medications for veterans, medical tests being late, right?”

“These are all things that we have warned about, and they need to be addressed,” Kubayanda said. “It’s not just numbers on a spreadsheet at this point. It’s actually affecting real people.”

Read more: PRC chairman Kubayanda says USPS is in a ‘nosedive’

Trump-Appointed USPS Postmaster General Draws Republican Rebuke

Steve HutkinsNews

Newsweek: Postmaster General Louis DeJoy, who was appointed by former President Donald Trump during his last year in office, is receiving rare backlash from Republican lawmakers for his handling of the U.S. Postal Service (USPS).

A group of 26 U.S. senators, including 13 Republicans representing states with large rural areas, sent DeJoy a letter this week demanding that he works to “improve service immediately” and “restore status quo operations as much as practicable” in locations where his cost-cutting measures have resulted in significant delivery delays.

The senators argued that areas where USPS service has recently been changed under DeJoy’s “Delivering for America” initiative have suffered “critical delays for mail that requires overnight delivery,” with the possibility of on-time deliveries “for critical mail like medications and laboratory tests” having been “eliminated” in some areas.

Senators expressed skepticism that DeJoy’s plan would improve “efficiency or costs” overall, while warning that “local and rural service could be degraded” by measures like requiring outgoing mail to sometimes be processed at hubs that are out of state.

DeJoy was urged to pause the plan and request a “comprehensive” advisory opinion from the Postal Regulatory Commission before moving forward with any further changes.

Read more: Trump-Appointed USPS Postmaster General Draws Republican Rebuke

The landmark Bronx General Post Office is for sale again

Steve HutkinsNews

Welcome2TheBronx: The Bronx General Post Office is back on the market with hopes to sell the property for well over $70 million.

Back in 2013, Welcome2TheBronx broke the story that the landmark Bronx General Post Office on the Grand Concourse at 149th Street was being sold off by the United States Postal Service.

By the following year, developer Young Woo & Associates purchased the massive property for $19 million and promised the community to turn the landmark into a destination filled with retail shops, offices, and restaurants, much like the borough’s own Chelsea Market—an idea first proposed by Welcome2TheBronx long before Young Woo’s purchase of the property.

But besides the restaurant on the rooftop, Zona de Cuba, the new space for the post office, and the restoration of the Ben Sha murals in the original lobby nothing ever came to fruition and the 172,000 square foot building has sat mostly vacant since and yet another symbol of broken promises in The Bronx—broken promises that have plagued the borough for our beloved landmarks like the Old Bronx Courthouse, and the Kingsbridge Armory.

Then in 2018, Welcome2TheBronx once again broke the story that Young Woo & Associates had decided to unload the property and by the following year it was in contract to be purchased by MHP and Banyan Street Capital for $70 million but the deal eventually fell through.

Five years later, the area is far different from what it was with thousands of units of luxury housing having been completed along the South Bronx Harlem River waterfront, 425 Grand Concourse at the site of the former PS 31 aka ‘Castle on the Concourse’, Bronx Point just three blocks away which will be the future home of the first Hip-Hop museum, and the Bronx Children’s Museum.

Perhaps the current owners hope to capitalize on all this recent activity in the area since its purchase for $19 million ten years ago and get the $70 million+ they’re hoping for.

Whatever the outcome, the space needs to be activated and put to good use for the local community.

Read more: The landmark Bronx General Post Office is for sale again; Developer asking for over $70 million – Welcome2TheBronx™

Postal supervisors tell postal leadership, Don’t blame us for DFA failures

Steve HutkinsBlog, Featured

Resistance to the Postal Service’s implementation of the Delivering for America plan appears to be intensifying.

On Wednesday, twenty-six Senators wrote a letter to the Postmaster General calling on the Postal Service to pause network changes until the Postal Regulatory Commission does a comprehensive Advisory Opinion on the potential impacts.

“While USPS claims these changes overall will improve service while reducing costs,” says the letter, “there is evidence to the contrary in locations where USPS has implemented changes so far. USPS must stop implementation, restore service in those areas where changes were implemented, and fully understand the nationwide effects of its plan on service and communities.”

At yesterday’s meeting of the Board of Governors, Governor Ron Stroman said that the network design being implemented by the Postal Service, while beneficial in many regards, “poses some risks,” including additional opportunities for delays.

“To better manage these risks,” said Stroman, “I believe we need to slow down new network changes until service has gotten close to our service targets for 2024. We should then more gradually phase in changes over time.”

(The video of the BOG meeting is here; Stroman’s remarks begin at 18:00. His comments are discussed today in this article on Federal News Network.)

The National Association of Postal Supervisors (NAPS) has now added its voice to the growing resistance to the network transformation, or at least to the way it’s being implemented.

Yesterday NAPS filed comments with the PRC concerning the Postal Service’s responses to an Information Request about the causes of the poor service performance in the Georgia District (discussed in this post). The NAPS comments include a letter from Robert M. Levi, NAPS’ Director of Legislative and Polical Affairs, along with statements by NAPS executives in hearings before Congress in 2022 and 2024. (The NAPS filing can be downloaded from the PRC website here, and accessed directly here.)

Levi’s letter observes that the Postal Service told the PRC that one of the causes of the “woeful performance” in Georgia was “Supervisory Competency.” The USPS cited “a standing management competency gap, with many managers and supervisors providing insufficient supervision and accountability.”

NAPS did not like that explanation at all, calling it an “inaccurate, incomplete, and unsubstantiated claim.”

The Postal Service, said NAPS, “should not attempt to shift responsibility and deflect blame for its unsuccessful implementation of certain aspects of its DFA plan. The implementation failures have very little to do with intrinsic supervisory and managerial competency, but more to do with the resistance of the USPS executive leadership to the constructive input and appropriate training of its frontline supervisors, managers, and postmasters.”

NAPS goes on to say that its recommendations concerning complement and training issues have been, in most instances, “summarily dismissed.” In particular, NAPS points to its long-standing criticism of the ratio of managers and craft employees in Processing & Delivery Centers (i.e., there should be more managers). NAPS also says the USPS has “misused under-trained employees” and there should be “much more robust and comprehensive new supervisor training.”

Finally, NAPS says it has warned postal leaderships that “logistics realignments and consolidations associated with the DFA are moving too quickly and broadly, absent the opportunity to review performance and operational data.”

Included in the NAPS comments are statements by NAPS President Ivan D. Butts at a Sept. 7, 2022, hearing of the House Oversight and Reform Subcommittee on Government Operations on Postal Performance, Safety and Theft. In that statement, Butts encouraged Congress to monitor postal delivery performance, noting that while on-time scores appeared to have improved over the past two years, that may actually be the result of the change in service standards in 2021.

Butts went on to express his concern about the potential effects of the DFA plan to consolidate and realign mail processing operations throughout the country. “We believe, consistent with the law, the Postal Service should be transparent with regard to the reasons it decided to initiate this plan. What are the specific goals of the plan? Are there costs savings? If so, how much will be saved? And, how will success be measured?”

Butts went on to say that the Postal Service should not proceed with the consolidations until it has provided the required transparency, including a PRC Advisory Opinion, to address these questions.

Yesterday’s comments also include Butts’ statement to the Senate Committee on Homeland Security and Governmental Affairs on April 16, 2024. Butts reminded the Senate that back in 2022 he had pointed to the Postal Service’s “lack of transparency, stakeholder engagement, regulatory review, and beta-testing regarding plant realignment and consolidations. NAPS anticipated the current performance challenges. At the House hearing, and subsequently, NAPS urged Postal Service leadership to take its foot off the gas pedal to consider the feasibility of the plans more carefully, and to evaluate how each consolidation would impact performance and expenses.”

“NAPS foresaw the unanticipated troubles that likely would occur during the rollout,” and shared it concerns with postal leadership, “but, for the most part, our cautions were dismissed.”

“If the USPS had complied with this provision,” Butts told the Senate, “the PRC would have solicited comments from stakeholders, issued an advisory opinion and made constructive recommendations on the proposal. Clearly, this was an avoided opportunity to solicit consequential advice. The mailing public and business community now are experiencing performance difficulties that could have been anticipated and prevented had the law been followed.”

Butts proceeded to review the service performance data over the past several months in Georgia, Virginia, and elsewhere, where scores have fallen well below their targets.

“I hope the committee can understand the angst shared by your constituents and the mailing community because the USPS is not pausing its DFA implementation in light of the performance issues. NAPS believes a temporary halt is necessary to better evaluate the feasibility of each planned consolidation and realignment.”

“The nature of consolidation plans,” explained Butts, “can and will create major pinch-points if something goes wrong at a particular plant; mail can be delayed for days. This happened at multiple locations. Facility modifications and staff quick fixes elevate implementation costs of the DFA. It would be appropriate to have an accounting of these additional expenditures. In addition, we have heard from our postmasters that rural services could be compromised by shifting postal services out of post offices and into larger facilities, rendering the post offices expendable.”

Butts concluded his remarks to the Senate by recommending that implementation of the network realignment be suspended while postal leadership constructively engages with supervisors, managers, and postmasters rather than “presenting the plan to frontline managers as a fait accompli.”

Butts also discussed the increase in crime mail theft and attacks on postal workers, and he again noted that postal leadership, rather than taking responsibility, has instead blamed others.

Butts concluded his statement by expressing concern that declines in service and security issues are deflating mail volume, as the mailing public and business community are “compelled to seek alternative channels to communicate and conduct business. Our goal must be to restore confidence in our national mail system…. Absent a viable Postal Service,” said Butts, “rural America will suffer, seniors will suffer, our friends and neighbors will suffer, and American businesses will suffer.”

A couple of weeks ago, the PRC directed the Postal Service to request an Advisory Opinion or “to show cause” why it believes an opinion is not warranted. The Postal Service has already indicated it will not request an opinion at this time, so later this month it will provide the PRC with comments explaining its decision.

Even with members of Congress and the Postal Service’s own supervisors calling for more PRC involvement, postal leadership is not likely to change its decision about an advisory opinion. But perhaps the Postal Service, as Governor Stroman recommended, will slow down or pause DFA implementation until service performance improves. That could take several months, so perhaps the Postal Service will proceed cautiously until after the November election and the peak holiday season. Or perhaps not.

— Steve Hutkins

Rural Americans Are Losing Their Mail. You Could Be Next.

Steve HutkinsBlog, News

By Brooke Darrah Shuman, More Perfect Union

Four years in, Postmaster General Louis DeJoy has had one of the most controversial and high-profile tenures in the office’s history.

DeJoy was put in place by a Trump appointee-led Board of Governors in 2020 while under scrutiny for securing lucrative contracts for his former transportation company XPO Logistics, as well as for his investments in 14 companies with financial ties to USPS. During the COVID pandemic in 2020, DeJoy’s cost-cutting slashed the number of mail sorting machines and restricted postal workers’ ability to make extra trips, which a federal judge later found hurt both the Postal Service and states and localities by “impeding their ability to provide safe alternatives to in-person voting.”

But despite calls for his resignation, DeJoy has remained in the position during the Biden administration. “Get used to me,” he told congressional lawmakers during a 2021 hearing.

And now he’s rolling out his 10-year plan, “Delivering for America,” one of the most significant restructurings of the Postal Service in decades—and residents in several states are already feeling the impact.

DeJoy has said his new strategy will make the Postal Service more efficient and profitable, and to that end, the plan involves two major changes to how mail moves in the United States.

First, regional processing centers that handle incoming and outgoing mail will either be downgraded to local centers or consolidated into 60 mega-centers, where mail from different regions will travel and be sorted together.

This will impact rural areas the most, where towns will also face the second big change: the loss of their evening pick-up service, a shift that DeJoy dubbed “Local Transportation Optimization.” Mail that is usually picked up and processed that night will now be dropped off in the evening and sent out the next day, adding an extra day to delivery.

Cheyenne, Wyoming is one of the cities that will lose its processing center in June, and a growing movement of postal workers and residents are pressuring state legislators to stop the changes. In October 2023, USPS announced Cheyenne’s local processing center would close and move 104 miles to Denver, Colorado. Wyoming’s other processing center, in Casper, would move 254 miles to Billings, Montana.

If the plan goes through, Wyoming will be one of a handful of rural states that has no mail processing centers at all.

Watch our full investigation into the impact of DeJoy’s reforms on rural America:

Read more: Rural Americans Are Losing Their Mail. You Could Be Next.

A People’s Bank at the Post Office

Steve HutkinsNews

JSTOR Daily: Post offices in the United States used to host the Postal Savings System. It was a form of non-profit savings bank and existed from 1911 to 1966. Historian Christopher W. Shaw tracks the “life and death” of this public bank, which gave “a measure of financial security” to small depositors and allowed for a “reimagining of the basic order of the financial system.”

“Millions of Americans deposited their earnings at the local post office,” Shaw writes, noting that

these savers sought the security that the national government’s guarantee of their deposits afforded. Bankers had lobbied hard against the Postal Savings System’s establishment and opposed subsequent efforts that workers and farmers made to expand the institution.

In fact, the “banking fraternity would maintain its enmity toward the government’s savings bank” for its half-century lifespan. Bankers finally killed it off in 1966, ironically aided by the New Deal’s rescue of their for-profit banking systems and the post-WWII “decline in popular political engagement with economic issues.”

The first postal savings system was set up in Great Britain in 1861. As Shaw details, the demand for postal savings in the US came out of the fierce struggle between workers/farmers and bankers in the late nineteenth century. Such entities as the Knights of Labor, American Federation of Labor, the National Grange, and the People’s Party all championed the idea of an alternative to for-profit banking. In the words of the New York State Knights of Labor, the nation needed a Postal Savings Banks to keep people’s monies “safely from the itching palms of the stock-jobbing bank officials.”

Like many of the compromises in the unending battle of the many versus the elite few, the 1910 Postal Savings Bank Act was modest. The system could operate “only in designated post offices, redeposit its funds in existing banks, and pay a noncompetitive 2 percent interest rate,” Shaw writes. There was also a $500 deposit ceiling. And virtually no money was ever spent on publicizing the service.

Read more: A People’s Bank at the Post Office – JSTOR Daily

Dickinson County (MI) Board of Commissioners starts petition opposing facility consolidation

Steve HutkinsNews

Dickinson County, Michigan. Faced with the consolidation with the Green Bay processing center and reduction in local services in the Upper Peninsula’s only mail processing plant, the Dickinson County Board of Commissioners has begun a local and nationwide online petition campaign. The petition, which is available on change.org, is entitled ”Demand the USPS Board of Governors Abandon the “Delivering for America Plan.”

By proposing a nationwide petition campaign, the board of commissioners hopes to unite with other individuals and communities across the nation who face the same concerns about potentially negative changes to America’s postal delivery system.

Speaking on behalf of Dickinson County, Commissioner Barbara Kramer stated, “The Dickinson County Board of Commissioners believes that our Kingsford, Michigan Post Office Processing Center MUST not only survive, but must expand to serve all of the residents of the Upper Peninsula of Michigan in a timely and efficient way. The proposed USPS DELIVERING FOR AMERICA plan takes away the efficiencies of our local distribution center and has the potential to damage our way and quality of life. Therefore, we strongly support any and all efforts by our congressional leaders to stop the rollout of this plan.”

The Dickinson County Board of Commissioners Petition can be found here. https://chng.it/5VDWFTZZ79

The Board of Commissioners — Henry Wender, Barbara Kramer, John Degenaer, Jr., Joe Stevens and Ann Martin — is the governing body of Dickinson County.

Commissioners oversee county properties and establish budgets, participate in, or chair county committees, boards and commissions, as well as actively participate in a wide range of community events, programs, and committees.
https://www.dickinsoncountymi.gov/government/county_departments/board_of_commissioners/index.php

The pdf of the press release is here.

More Perfect Union: Where Is Your Mail?

Steve HutkinsBlog, Featured

More Perfect Union: Postmaster DeJoy wants to make the USPS more efficient.

So his solution is to take mail from this rural Wyoming town, send it to be sorted in Denver, and then ship it back to Wyoming again.

It’s not just absurd. It’s also disastrous for postal workers and rural residents. It’s all part of DeJoy’s 10 year plan to revitalize the USPS.

In reality, his plan is designed to kill it from the inside out.

Why? So corporations can privatize—and profit off—our mail.

The latest phase of DeJoy’s plan is consolidating USPS processing centers across the country into 60 mega-centers where mail from different regions will travel and be sorted together.

For rural areas, that means mail will be delayed by at least a day.

It also means mail handlers will lose their jobs and other postal workers will be forced to move

In states where the USPS has already rolled out the consolidation phase, service is way down and mail is delayed by days.

In Virginia, only 73% of mail is delivered on time. In Georgia, only 60% is.

Screenshot

DeJoy claims that consolidation will save the USPS money.

But in Richmond, Virginia, the new system cost $8 million in extra trips and overtime hours.

Why would Postmaster Louis DeJoy, who runs the USPS, want to undermine it?

DeJoy used to run XPO logistics, a trucking company his father founded. Before he became postmaster, XPO had a $36 million contract with the USPS. In 2021, it scored a $120 million contract. Even though DeJoy is no longer on the board at XPO, he and his family made between $1.2 to $1.7 million in income from XPO real estate and stocks in 2019.

He also had investments in 14 other companies with financial ties to the USPS when he first took office, which he later divested from.

We need to save the U.S. Postal Service, and our mail, from Louis DeJoy’s greed.


The X thread above can be found here. The You-Tube video has lots of good comments.

More Perfect Union is a nonprofit media organization with a mission to build power for working people. Learn more here: http://perfectunion.us/

USPS sees mail delays amid network overhaul. Now lawmakers, regulator seek answers

Steve HutkinsNews

Federal News Network: The Postal Service is telling lawmakers in areas hardest hit by recent mail delays that the effects are temporary, and that on-time delivery will soon stabilize in areas where the agency is modernizing its facilities.

Postmaster General Louis DeJoy met with members of the Virginia delegation on Monday — including Sens. Mark Warner (D-Va.) and Tim Kaine (D-Va.), as well as Reps. Jennifer McClellan (D-Va.) and Rob Wittman (R-Va.).

Warner told reporters Tuesday that both lawmakers and DeJoy agree the mail delays in the Richmond area are “totally unacceptable,” after the agency opened a new Regional Processing and Distribution Center (RPDC) there.

“The good news of yesterday’s meeting was the Postal Service and the postmaster general agreed that the rollout in Richmond was a disaster. It was a mess, and it needs to be corrected,” Warner said.

DeJoy recently told members of the Senate Homeland Security and Governmental Affairs Committee that USPS is seeing issues with on-time delivery in regions where USPS is opening massive new facilities meant to streamline local operations.

DeJoy apologized for the decline in service in areas such as Richmond, Atlanta and Houston, but told the committee he’s still “optimistic about the changes,” and expects service to stabilize in impacted regions by this summer.

“I was happy to see I didn’t hear excuses from the postmaster general,” Warner said. “He acknowledged they screwed up, that it was a mess, that consumers weren’t informed, and that the postal workers themselves were not adequately trained. He said that he wants to make this the best distribution center in the country, and we’re going to hold them to that.”

Warner said Virginia lawmakers plan to meet back with DeJoy in 60 days.

“What I have found in the past is this is going to require constant attention from the congressional delegation. It’s obviously bipartisan — we all depend upon the mail, and the folks in the greater Richmond area deserve better,” he said.

Meanwhile, the Postal Service’s regulator is asking for more answers about these regional delays, and whether USPS will see on-time delivery drop in other regions as it rolls out its network modernization plans.

The Postal Regulatory Commission asked USPS last Friday to start the process of obtaining an advisory opinion on its network modernization plans or explain why such a review is unnecessary.

“It is clear that there has been a quantifiable decline in service across several regions during and after the implementation of new facility types,” the commission wrote.

Read more: USPS sees mail delays amid network overhaul. Now lawmakers, regulator seek answers

USPS regulator weighs intervening on DeJoy reforms

Steve HutkinsNews

Government Executive: The U.S. Postal Service is facing pressure from its regulator to justify the major reforms the agency is implementing, with the watchdog suggesting the changes are having a larger impact than leaders had predicted.

The Postal Regulatory Commission order comes as USPS leadership is facing pushback from lawmakers in both parties and a wide array of stakeholders over its overhaul of the mail network and delivery practices. The PRC directive called on the Postal Service to either submit to an advisory opinion from the watchdog or explain why such a review is unnecessary.

Postal management is unlikely to accept that an advisory opinion is required, as doing so would amount to an admission that the changes in Postmaster General Louis DeJoy’s Delivering for America plan amount to a meaningful change in the nature of postal services on a national level. DeJoy and his team have repeatedly argued their reforms are simply realizing efficiencies in the system, but will ultimately not negatively impact mail users.

PRC’s order is focusing on the Postal Service’s consolidation of mail sorting away from individual post offices in favor of centralized centers and the moving processing operations away from hundreds of cities and towns in favor of 60 mega-centers throughout the country. It also relates to USPS’ new “optimized collection plan” that will require mail to sit overnight at post offices instead of being collected each evening for transportation to a processing center.

In its order, PRC said the changes could result in mail delays and a “significant loss” in employees. Postal management has failed to provide evidence or supporting analysis that the reforms will not result in slower mail delivery, the regulator said, noting that on-time delivery has declined this year.

“I think the American public, postal stakeholders and Congress want to understand the impact of the Postal Service’s network transformation plans,” said PRC Chairman Michael Kubayanda. “They want to know what is happening to mail service, how to stop this decline, how to keep it from spreading and how to restore service to targeted levels of performance.”

Postal management has 40 days to request an advisory opinion, or 20 days to submit a response arguing that one is not necessary. PRC expressed skepticism the latter option could prove successful, noting it was “hard to see” how the USPS initiatives would “not involve a change in the nature of services” that would statutorily necessitate a review.

Read more: USPS regulator weighs intervening on DeJoy reforms – Government Executive