Postal Service to end evening collection at thousands of post offices

Steve HutkinsBlog, Featured

Imagine if the Postal Service announced that it would continue providing 6-day delivery to urban areas but could no longer afford to do the same for rural communities because their relatively low mail volumes don’t justify the costs.

People living in these communities would undoubtedly complain that the plan was unfair, and elected officials who represent states and districts that are largely rural would be certain to object.

Yet the Postal Service has begun implementing a plan that discriminates against rural areas in much the same way, and it’s all happening under the radar.

The plan, Optimized Collections, aka Local Transportation Optimization (LTO), eliminates the evening pickup of mail at post offices for transportation to a processing center. Mail and packages sent at these offices, as well as the mail collected by carriers on their routes, will need to wait until the next morning for collection, when the truck from the processing center drops off the day’s mail for carrier delivery and PO boxes.

The LTO initiative was implemented in Virginia in October (as discussed here) and in Wisconsin in January (as discussed here). Earlier this week, the Postal Service notified unions and management associations that the LTO initiative will be implemented at 180 more P&DCs over the coming months.

The Postal Service hasn’t provided a number, but in all likelihood, the LTO initiative will end evening collections at something on the order of 10,000 to 12,000 post offices nationwide, perhaps more, depending on how many P&DCs eventually serve as truck hubs. (The list of 180 P&DCs probably represents only the first phase.)

Here’s the list along with a map. The list is sorted on the left by name and on the right by implementation date. The list is on Google Docs here. The original list in the notification is here.

The list includes about 110 P&DCs that are being downgraded to Local Processing Centers (LPCs), which handle only incoming mail; 30 Regional Processing and Delivery Centers (RPDCs), which handle incoming and outgoing mail, and, in these cases, also house an LPC; and about 40 P&DCs that haven’t yet been identified as a RPDC, LPC or S&DC.

A key part of the initiative is to insource the transportation between P&DCs and post offices from private Highway Contract Route drivers to USPS Postal Vehicle Operators (more on that here). The notification indicates that during February the Postal Service will hire and train more PVOs, as well as update or cancel the HCR contracts, in the Atlanta and Portland OR regions.

According to a letter to the President and Congress from Postmaster General DeJoy (Jan. 10, 2024), the Postal Service believes it will save $1 billion a year “by optimizing routes and decreasing thousands of underutized local trips a day.” The letter doesn’t explain, however, what the LTO plan will actually do.

The plan’s distance-and-volume criteria ensure that the impacted post offices will be almost exclusively small and rural offices. Post offices that are in or near cities will not be “optimized,” and those that are relatively far from cities won’t be impacted either if they have a relatively large mail volume — that is, if they serve a densely populated area.

The Postal Regulatory Commission has been asking about the LTO plan as part of its Public Inquiry into Delivering for America. In early December, the Postal Service responded to an information request about the plan, and later in the month, it responded to a follow-up request.

The Postal Service says that it did not request a PRC advisory opinion before implementation, which is required when a plan will change service on a nationwide basis, because there will be no “material impact to service performance.” The Postal Service also suggested that the implementation in Virginia and Wisconsin was just a pilot, so an advisory opinion would be premature.

But the notification list makes it clear that LTO is not a pilot at all. In fact, in its comments to the PRC, the Postal Service emphasized the “critical importance” of the initiative, and said it must be implemented at “a rapid pace.” And that’s exactly what’s happening — all without any opportunity for public comment or regulatory review.

Don’t tell unless asked

The Postal Service is apparently not even informing impacted customers that their mail will be held at the post office until the next day.

A USPS presentation about the optimization initiative from a couple of months ago contained a copy of a customer communication that informed customers about the changes. The Commission asked how the communication was being shared with customers.

One expected the Postal Service to say that it was placing notices in PO boxes and mailing them to residences and businesses. At the least, one expected to learn that the communication was posted in the post office lobby.

As it turns out, however, the notice to customers was intended to be used “as a means of responding to customer inquiries at a retail facility or the customer call center.” In other words, the customer had to ask a clerk, postmaster, or call center about it. Yet how were customers even to know to ask?

The Commission asked the Postal Service to provide a list of the impacted post offices in the Virginia implementation, along with the collection times at each office, but the Postal Service would only provide the list as a nonpublic filing. Apparently letting the public know when their mail will be picked up is considered commercially sensitive information.

Levels of optimization

The Postal Service explains that there are three levels of “optimization.”

One level is no optimization at all — evening pickups continue as usual. This applies to post offices located within 50 miles of the facility that will serve as the hub for the box trucks that move mail back and forth between processing facilities and post offices. (In its first iteration in Richmond VA, the radius was 25 miles; it expanded to 50 for Wisconsin.) Offices that are more than 50 miles but that average more than eight containers of mail daily are also excluded from optimization.

The second level is called Hybrid Optimization. As usual, a truck drops off the mail at the post office in the early morning, but then, on the return leg to the LPC or S&DC, it circles back to some post offices and picks up whatever mail has been sent by the pickup time. Everything mailed after this pickup, which will probably take place late morning or mid-day, would wait for collection until the next day. The hybrid model applies to post offices more than 50 miles from the LPC but that have at least one container of mail daily.

Under Full Optimization, there’s no evening collection at all. The mail sits at the post office until the next morning, waiting for the truck to arrive with the day’s mail. This applies to post offices that are more than 50 miles from the LPC and that don’t have at least one container of mail — in other words, small, rural post offices.

Because the Postal Service is not notifying patrons of the new collection times, customers at hybrid post offices probably won’t know there’s a period during the morning when they can mail something and still have it picked up the same day. That would obviously help mitigate the impacts of the initiative. But if the policy is “don’t tell unless asked,” many customers will never learn about the same-day pickup option.

The disparate impacts of the initiative on urban and rural areas were examined in previous posts on Richmond and Wisconsin. To see how this disparity plays out elsewhere, let’s take a look at Georgia and Oregon, where the plan is being implemented in February.

Optimizing Georgia

Here’s a map of Georgia’s 733 post offices. A list is on Google Docs here.

The post offices are color-coded as follows:

  • 111 post offices, marked in red, are less than 20 miles of the LPC, which will probably be co-located with an S&DC, so the carriers themselves can do the morning drop-offs and evening collections;
  • 223 post offices, marked in orange, are more than 20 but less than 50 miles from the LPC. They would continue to get an evening collection;
  • 14 offices, marked in yellow, are more than 50 miles from the LPC, but based on their population (more than 30,000), they probably have a large enough volume to be excluded from optimization;
  • 110 offices, marked in green, are more than 50 miles from the LPC, but with populations of 6,000 to 30,000, they probably have enough volume to merit hybrid optimization;
  • 275 offices, marked in blue, are beyond 50 miles and have fewer than 6,000 people, probably not enough to generate one container, so they would be subject to full optimization.

Overall, then, under the LTO plan, about 385 post offices in Georgia — more than half the state’s post offices — would no longer get an evening collection.

Another way to look at the initiative is with reference to the configuration of the Postal Service’s new network under the Delivering for America plan. In this realignment, the country is divided into sixty regions, each with its own Regional Processing & Distribution Center (RPDC). Each region is divided into several LPC service areas consisting of the 3-digit ZIP prefixes served by the LPC. (For more on the configuration, see this previous post.)

Most of Georgia falls within the Atlanta region, with its RPDC in the new mega-facility in Palmetto, southwest of Atlanta. This region has are four LPCs: Atlanta, North Metro, Augusta and Macon. A part of northwest Georgia is in the Nashville region, served by an LPC in Chattanooga (mail sent from this area would go to the Nashville RPDC for processing). The southern part of the state is in the Jacksonville region, served by LPCs in Jacksonville and Tallahassee; mail sent from these areas goes to Jacksonville RPDC for processing.

Here’s a map showing these LPC service areas. (Hover and click on the map to show popup.)

 

Here’s another map of Georgia, this one applying the optimization categories to ZIP codes. The red, orange and yellow ZIPs would be excluded from optimization; the blue and green would lose the evening pickup.

 

One of the Census criteria for “rural” is a population less than 5,000. The ZIP code areas of the fully optimized areas in Georgia average about 2,000 people, compared to 14,000 per ZIP for the state overall. In the ZIP areas with fully optimized offices, 86 percent of the population is rural; the areas excluded from optimization average 18 percent rural.

Here’s a map showing the population distribution, which helps illustrate that the impacted areas are primarily rural.

Optimizing Oregon

Here’s a map of Oregon’s 378 post offices. A list is on Google Docs here.

Here’s the breakdown by category:

  • 66 post offices (red) are within 20 miles of the LPC and would continue to get evening collection;
  • 75 post offices (orange) are between 20 and 50 miles of the LPC, so they would be excluded from optimization;
  • 10 offices (yellow) are more than 50 miles from the LPC, but based on their population (more than 30,000), they would be excluded from optimization;
  • 48 offices (green) are more than 50 miles from the LPC, but with populations of 6,000 to 30,000, they will probably be subject to hybrid optimization;
  • 180 offices (blue) are beyond 50 miles, have fewer than 6,000 people, and would be subject to full optimization.

Oregon thus has about 228 post offices that could lose their evening collection. That’s 60 percent of the state’s post offices.

Here’s a map showing the four LPC service areas that cover Oregon.

 

Nearly all of Oregon falls within the Portland region, with LPCs in Portland, Eugene, and Medford. Outgoing mail sent from any of these areas is processed in Portland. The eastern part of the states falls within the Boise, Idaho, region and is served by the LPC in Boise.

This map shows how the distance-and-volume criteria might play out in Oregon.

 

The ZIP codes of the fully optimized areas average about 1,100 people, compared to 8,700 for the state as a whole. In the ZIPs with fully optimized offices, 82 percent of the population is classified as rural, while the excluded areas average 13 percent rural.

Here’s a map one showing population distribution. It illustrates how the densely populated areas are in and around the LPCs, and they would be excluded from optimization. The less densely populated areas coincide, more or less, with the areas that would be subject to full or hybrid optimization.

The Postal Service has rejected the claim that the LTO plan differentiates between customers based on their distance from an LPC or on the population density of where they live. But these maps and the data on which they’re based suggest otherwise.

No material impact

The Postal Service seems to think that informing customers about the collection initiative is not very important. As it states in a response to the Commission’s information request, “From a customer standpoint, the Postal Service does not plan for the initiative to impact the pick-up times on collection boxes, the ‘start-the-clock’ date, or the applicable service standards. The Postal Service also does not anticipate material impact to service performance.”

While it seems clear that the plan could increase the time between customer drop-off and destination delivery, the Postal Service says, “not necessarily.” The Postal Service says that the changes in service standards implemented a couple of years ago now provide a “sufficient cushion” to allow it to meet the standards “even if mail is retrieved from candidate sites the next day.”

The Postal Service also notes that some mail from the candidate sites currently misses the processing window in the evening, so they get to the processing center the next day anyway. The Postal Service adds, “It should also be noted that we were not meeting our service performance goals prior to the initiation of Optimized Local Transportation.”

Overall, says the Postal Service, the “initiative is in its early stages, and thus, it is premature to conclude that the program will result in volumes failing to achieve service standards. By examining the outcome of the initiative and fine-tuning to solve any gaps, the Postal Service expects that achievement of service standards will not be impaired.”

The notification shared with stakeholders this week shows service performance data for the Richmond region since implementation of LTO. For the period Nov. 10, 2023, through Jan. 19, 2024, the performance score for single-piece First Class mail originating in the region was just 76 percent on time. The notification does not provide data differentiating mail sent from areas included in LTO and those excluded, nor does it show data for mail with different service standards (2, 3, 4 and 5 days). It’s likely that the optimized areas had even lower scores, especially for 3-to-5 day mail.

As the Postal Service acknowledges, it hasn’t been meeting service performance goals for some time. Over the past three years, the quarterly scores for single-piece First Class mail with a service standard of 3 to 5 days have averaged about 85 percent. That’s nine percentage points better than Richmond region for the ten weeks ending January 19.

Whether the optimization initiative played a role in the low scores remains an open question, but achieving performance targets will not get any easier when the mail isn’t picked up until the next day.

— Steve Hutkins

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