Postal regulator directs USPS to request an advisory opinion on DFA or to show cause why it won’t

Steve HutkinsBlog, Featured

Tensions between the Postal Service and the Postal Regulatory Commission are intensifying. On Friday, the Commission issued an order directing the Postal Service to file a request for an advisory opinion on Delivering for America or to show cause as to why an advisory opinion is not warranted. (The order can be found on the PRC website here.)

It’s been clear for well over a year that several of the DFA initiatives met the statutory requirement for an advisory opinion, but the statute (39 U.S. Code § 3661) is crafted in such a way that the Postal Service must begin the process by filing a formal request for an opinion. Absent such a request, the law does not seem to provide a way for the Commission to begin the process itself or to force the Postal Service to do so.

But pressure has been mounting on the Postal Service. Complaints about unprecedented mail delays are occurring across the country. Requests for information and explanations from members of Congress and other elected officials have been met with unsatisfactory responses from postal officials. Mailers and other stakeholders have been similarly frustrated by the lack of transparency.

The Commission’s order is long overdue, but the foul-ups with the recent launch of new RPDCs in Richmond and Atlanta were probably the tipping point, as was made clear at the recent Senate hearing. The pressure was on the Commission to do something, and so it has.

In a press release announcing the order, PRC Chairman Michael Kubayanda stated, “As the Commission issues this show cause order, we don’t have firm proof of what is causing the recent decline in service performance. I think the American public, postal stakeholders, and Congress want to understand the impact of the Postal Service’s network transformation plans. 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. Those are the questions the Commission is looking to answer with this order.”

The Commission’s order identifies several of the DFA initiatives that could have a nationwide impact on postal services — the statutory requirement for initiating the advisory opinion process. These include

  1. Creating new and repurposed facility types, i.e., Regional Processing and Distribution Centers (RPDCs), Local Processing Centers (LPCs), and Sorting and Delivery Centers (S&DCs);
  2. Eliminating evening collections at some post offices (Local Transportation Optimization, or LTO); and
  3. Converting some Highway Contract Route (HCR) transportation performed by contractors to Postal Vehicle Service (PVS) transportation performed by postal employees.

The Postal Service has previously told the PRC that “it evaluated those initiatives and concluded that advisory opinions were not required” because they would not impact service on a nationwide basis. For months now, the Commission has seemed to take this claim at face value. But not anymore.

“To date,” states the order, “the Postal Service has provided limited detailed information concerning its additional planned changes and thus far, has not included any information that address stakeholder and Commission concerns that implementation of these changes will result in nationwide service changes.  Although the Postal Service states that the DFA Plan initiatives will result in efficient operations and improved service once the changes have been implemented, the Postal Service has not provided any analyses, data, or modeling showing that these changes will improve service.  Nor have preliminary results from areas most affected by the DFA Plan initiatives demonstrated improved efficiency or service, as discussed further below. It is hard to see how these initiatives will not involve a change in the nature of services.”

The order proceeds to review some of the service impacts that may occur under the DFA initiatives. For example, “consolidating and repurposing facilities could mean longer routes for long haul transportation and carriers, which could result in mail delays.” Because some originating processing operations may be moved several hours away, it could delay processing and “also result in significant loss of postal employees, which could further lead to mail delays.”

Similarly, “under the LTO initiative, the lack of evening collections may result in delivery being delayed by at least a day because mail would likely sit overnight before being transported for processing.” The insourcing of contracted transportation routes could also cause delays due to a truck driver shortage and an inability to hire sufficient postal vehicle operators, a problem already discussed in an OIG report.

“If implemented together across the nation as planned, these operational changes appear to impact service in significant ways. Indeed, recent service declines and other issues associated with the implementation of the DFA initiatives support the Commission’s and the public’s skepticism.”

The order proceeds to describe the mail delays we’ve seen in Houston, Richmond, and Atlanta, as well as nationwide declines in service performance scores. The Commission also cites a recent OIG report on the LTO initiative, in which the IG “noted that the LTO initiative will affect rural communities and individuals who mail letters and packages more than other users of the Postal Service.”

The Postal Service has claimed that the problems we’ve been seeing are isolated and temporary, but it has provided no evidence that this is the case. In fact, states the Commission, “it has become increasingly apparent that the operational changes to be implemented by the Postal Service nationwide may result in significant service changes over a broad area of the country.”

Accordingly, the Commission directs the Postal Service to do one of two things: File a request for an advisory opinion within 40 days or “show cause within 20 days as to why an advisory opinion is not warranted for these initiatives.”

If the Postal Service does request an advisory opinion, the changes now underway would presumably need to be put on hold until the opinion is completed. According to the regulations, “the Postal Service must file the formal request for an advisory opinion with the Commission at least 90 days before implementing any of the proposed changes.”

That obviously hasn’t happened — some of these changes have been underway for over a year — but it might mean that changes planned for the next few months would be delayed while the Commission works on the opinion, which is supposed to be issued within 90 days following the request.

Given that the Postal Service has previously rejected suggestions that an advisory opinion is necessary, it may very well take the second option. It will then need to submit a detailed discussion of the statutory requirement and the relevant precedents (primarily Buchanan v. U.S. Postal Service) as well as providing “sufficient data and analysis showing how the DFA initiatives, implemented together, do not constitute significant, nationwide service changes.”

Should the Commission find the Postal Service’s response unsatisfactory, it’s not clear what would happen next. But we may soon find out.

In any case, an advisory opinion only provides an opportunity for the Commission to request information and to share its analysis and advice. The opinions are not binding, and the Postal Service can proceed to do whatever it wants. Indeed, it’s ignored the Commission’s advice several times in the past.

Over the past several months, the Commission’s Public Inquiry docket provided some insight into the DFA plan, but the advisory opinion is a much more robust process, and it should lead to a much better understanding of what the Postal Service is really up to.

UPDATE, May 1, 2024: Government Executive reports that David Walton, a spokesman for the Postal Service, said the agency is confident it has met all of its legal obligations. “At this stage we are not required to seek an advisory opinion from the PRC regarding the implementation of the Delivering for America Plan initiatives that we have pursued thus far,” Walton said. “We will respond to the PRC’s order in more detail in this regard, consistent with the schedule that the PRC has established.” He added, however, that USPS could still seek an advisory opinion for forthcoming reforms under the DFA.

(This means the Postal Service will submit a report responding to the “show cause” order later this month and not request an advisory opinion. Presumably the PRC would then need to take the Postal Service to court over the matter, which would take many months to resolve. As an alternative, under the current public inquiry docket on DFA, the Commission could exert its subpoena power to get the information it would otherwise have requested in an advisory opinion docket.)

— Steve Hutkins