The Postal Service is in the process of creating sixty large, multi-functional mega-plants called Regional Processing & Distribution Centers. The first of them may go live as early as this summer.
It’s been known for several months that three of the first RPDCs would be located in newly leased facilities in Charlotte, Indianapolis, and Atlanta. More recently, the Postal Service revealed that two USPS-owned facilities – the Chicago Network Distribution Center (NDC) and the North Houston P&DC — are being repurposed as RPDCs (as discussed in this previous post).
We’re now learning about the locations of several more RPDCs. A list showing the “wave 1 RPDCs” was shared with the postal unions and posted on the NPMHU Local 300’s newsletter for Winter 2023. The list was also reported in the current issue of the union’s quarterly publication, The Mail Handler.
It’s not clear when the union received the list, and it may be somewhat out-of-date already, but the project dates on the list suggest it’s fairly recent.
This list shows the locations of eleven RPDCs — the five that had been previously reported plus six that hadn’t been: the currently operating facilities in Santa Clarita, CA; Portland, OR; Jersey City, NJ; Richmond, VA, and Bethpage, NY, plus a new leased facility in Greensboro, NC.
A similar list showing eight new RPDCs expected to “go live” in 2023 appeared a few weeks ago on the website of GrayHair, a provider of postal data tools. This list also had Jacksonville, FL, but it’s not on the first-wave list.
It’s noteworthy that two of the four new leased facilities will be in North Carolina, the Postmaster General’s adopted home state. DeJoy built his fortune as CEO of New Breed Logistics, based in High Point; he has a home in nearby Greensboro; and his chief logistics officer and executive VP is also a former New Breed executive. They have a lot of experience doing logistics projects in North Carolina, but why develop two new leased RPDCs in the same state, just 110 miles apart?
The first wave
The first-wave list shows the project type for seven of the new RPDCs as “restack” — presumably meaning that creating the RPDC will involve relocating equipment and operations within the current space (and perhaps from nearby facilities). These include two NDCs (Forest Park and Jersey City) and five P&DCs (Santa Clarita, Portland, Jersey City, Bethpage, and Richmond). Four of the projects are labeled “new” — the leased facilities in Atlanta, Indianapolis, Charlotte, and Greensboro.
More leased space, at what cost?
The network transformation now underway will ultimately involve leasing many facilities with several hundred thousand square feet. This is unprecedented. In the past, when the Postal Service needed large facilities, it bought them. It now has nearly 50 owned facilities with more than 500,000 square feet. The Postal Service leases about 23,000 facilities, most of them small or mid-size post offices, and only a half dozen of them (not counting the new ones) have more than 500,000 square feet. Five of these have been leased for over fifty years, so the current rents are probably well below the market rates the Postal Service is paying for the new facilities.
These new mega-plants are obviously very expensive. The Postal Service invested a total of $125.8 million to build out the new facility in Atlanta and $86.7 million on the Charlotte facility (as reported in a cost reduction report shared with the PRC for the annual compliance review). Annual lease costs on these facilities must be at least $5 million, perhaps closer to $10 million.
Why, one might ask, is the Postal Service spending so much on new facilities like these? It’s not as if it needs to expand the network’s infrastructure in order to keep up with rising volumes. Mail volumes have been steadily declining for many years, and parcel volumes, which surged during the pandemic, are leveling off. (Volumes on shipping and package services were down 4 percent for the first five months of fiscal year 2023.)
There’s also lots of excess space available in hundreds of existing facilities, as the Postal Service determined when it surveyed facilities looking for potential locations for S&DCs.
Whatever the motivation for leasing them, filling up the new spaces will involve relocating some operations from other processing facilities. Excess space in these facilities will then be used for Sorting & Delivery Centers, which will take carriers away from post offices and create excess space in those offices — usually more than half the building.
One million square feet is about how much space 2,700 carriers occupy in post offices for casing the mail and other activities (366 square feet per route). Post offices average about 16 carrier routes, so all those carriers work out of about 170 post offices.
In a very real sense, then, a newly leased mega-plant ends up creating a significant amount of excess space in about 170 post offices — just about all the post offices within a fifty-mile radius of Greensboro.
This excess space and the absence of carriers will lead to reducing the customer service staff, cutting window hours, relocating to smaller spaces, and closing some post offices completely.
While these big new leased spaces may expedite the delivery of Amazon’s parcels, they’ll facilitate the downsizing of our network of post offices and diminish customer access to postal services.
How little we know
An article in Eagle magazine (July 2022) previewing the network transformation says most current postal facilities “are not considered state of the art — or even modern — in the logistics world.” Many are “relics of a bygone era.” In contrast, the Postal Service is “launching a new, flexible construction program that will ultimately create a modern, streamlined and effective network of new, clean, spacious and bright processing facilities that will be the hallmark of a modern, forward-looking logistics network.”
Of course, nearly all the facilities in the new network will be the same as those in the current network, just repurposed, but the Eagle’s focus is on the new shiny objects. The Eagle explains the RPDCs this way:
“The Postal Service will be investing significantly in creating strategically important multi-functional distribution centers for all network originating and destination volume, package processing, cross-docking, and other functionality as required in the specific region — effectively centralizing all metro-area processing operations in a single building. These million-square-foot-plus purpose-built facilities will employ new, effective workflows that simplify the movement of all classes of mail and packages from the point of entry to the exit bay. Plans include new or modified regional centers connected to newly specified local operations in existing facilities.”
This doesn’t really tell us much other than RPDCs will handle all classes of mail and parcels (as opposed to processing facilities that only do some), use “new, effective workflows” (apparently not possible in current facilities), and connect with local P&DCs (which they already do).
Beyond general descriptions like this, the Postal Service has had little to say, even to the postal unions.
The NMPHU’s The Mail Handler (Winter 2023) had this to say about the network changes: “The information that we have received from the Postal Service is high on concept but extremely low on details. The Postal Service is refusing to share with the Unions exactly which installations will be affected. It is extremely frustrating to say the least. The plans are fluid and constantly changing.”
The NMPHU Local 300 newsletter said this about the first-wave list it received: “We have been told that the RPDCs will be comprised of individual processing and distribution centers that are consolidated into one central mega location. The only information that we have been provided on the RPDCs is only one piece of paper of “Wave 1” for RPDC Sites… This is the only official information we have. We do not know the full extent of impacts to our members at this time, nor have we been told how it will affect plans within the region.”
The last time the Postal Service consolidated processing operations on a large scale like this was in 2012. That process was examined thoroughly by the Postal Regulatory Commission in an advisory opinion and by dozens of Area Mail Processing studies. The Postal Service hasn’t requested an advisory opinion, and it hasn’t done any AMP studies on the process now underway, so there’s been very little transparency and no opportunities for public comment.
The redesigned distribution network
Based on the available information, it appears that RPDCs will consolidate some processing operations from other processing centers in their area. Most of these other facilities won’t close, however, since they’ll be needed as S&DCs, and they’ll probably continue doing some processing and distribution as well.
Being multi-functional, some or all RPDCs will also serve as Sorting & Delivery Centers for the delivery units (post offices) within a 30-minute drive. That’s been confirmed for the Atlanta and Indianapolis facilities — they appear on S&DC maps in an internal July 29, 2022, presentation — so it’s probably true of other RPDCs as well.
But what else does an RPDC do?
A graphic in the Delivering for America plan illustrates the role of the RPDCs in the new network. (They’re called RDCs in this document.)
As you can see, the redesign eliminates NDCs (as discussed here) and introduces the RPDCs as key nodes in the network.
Apparently the sixty RPDCs will receive mail and parcels from P&DCs or directly from commercial mailers, and then forward everything to other RPDCs, P&DCs, S&DCs, and delivery units at post offices.
Generally speaking, this would be similar to the hub-and-spoke system of the new delivery network, in which S&DCs serve as hubs and the post offices losing their carriers are called “spokes.” In the distribution network, RPDCs would serve as hubs while the surrounding processing centers — renamed Local Distribution Centers (LDCs) in some USPS documents — and some delivery units would serve as the spokes. Local and regional mail would be transported between RPDCs and delivery units or between RPDCs and P&DCs, while anything going longer distances would be transported between the sixty RPDCs — rather than between almost 300 P&DCs, NDCs, and other processing facilities.
This would greatly simplify transportation routes, much as the Postmaster General explained in his presentation to the Postal Forum, which contrasted these two images of the old and new networks
RPDC hubs & LDC spokes
If a hub-and-spoke plan, or something like it, is in fact what’s happening, it’s worth considering which processing facilities are near enough to the first wave of RPDCs to become “spoke” LDCs. In order to connect with about 250 P&DCs, each of the sixty RPDCs would need to connect with four or five of them. Some might be in the same metro area, but others might be as far away as 200 miles.
Here’s a rundown of the eleven RPDCs in the first wave, starting with the six facilities we hadn’t heard about before. The information about the other five mostly repeats discussions in this previous post.
Santa Clarita, CA: This is the facility that stars in the Postal Service’s new TV commercials, where we see a fleet of shiny new delivery trucks departing in the predawn twilight. The ad spot is intended to show how well “orchestrated” the new delivery network will be (as discussed in this previous post and this one too)
The Postal Service has owned the Santa Clarita P&DC on Franklin Parkway in northwestern Los Angeles County since 1994. It has 650,000 square feet, it includes the Castaic Branch post office, and employs something on the order of a thousand employees. You can see more of the operations at the Santa Clarita P&DC in this virtual tour. The P&DC serves 300 delivery units at post offices in southern California. Perhaps it will also serve as the regional hub for nearby LDCs in Pasadena, Van Nuys, Goleta, and Bakersfield. Work on converting the Santa Clarita S&DC may have begun in February, and the RPDC is expected to go live in September 2023.
Greensboro, NC: This RPDC will be housed in a new, leased facility. Work may have begun in January 2023, and the facility is expected to go live in October. The Postal Service hasn’t said anything about where it will be, but there are several new logistics parks in the area. One possibility is the Reedy Fork Logistics Center. It’s big enough to handle a RPDC, and it’s managed by JLL, the Postal Service’s real estate agent. The Greensboro RPDC could consolidate from two existing facilities in Greensboro — the P&DC on Pleasant Ridge Road and the NDC on West Wendover Avenue. Aside from these, the nearest facilities in the region are in Florence (150 miles), Columbia (195 miles), and Greenville (190 miles).
Portland, OR: The RPDC in Portland is probably the P&DC on Cornfoot Road, which opened in 2018. The nearest facilities in the region that might serve as LDCs are the Eugene P&DC in Springfield (120 miles away) and the Bend P&DC (160 miles). Work on the Portland RPDC is supposed to begin in April 2023 and be completed by March 2024.
Sandston, VA: This is the Richmond P&DC on Technology Boulevard in Sandston, VA. The Postal Service has owned the property since 2009, it has 682,000 square feet. If it consolidates nearby facilities, these could include the facilities in Culpeper, Norfolk, and Roanoke. Work on the conversion began last December and should be completed by July of this year.
Bethpage, NY: This is the P&DC in Bethpage, Long Island, New York (previously the L&DC, originally NY Metro PMPC). It has about 400,000 square feet. It was one of the East Coast’s first PMPCs back in 2001; it now processes packages only. The nearest facilities are the Western Nassau in Garden City and the Mid Island P&DC in Melville. Work on this project began this month and is expected to be done by September.
Jersey City, NJ: This RPDC is the New Jersey NDC on 80 County Road. The Postal Service has owned it since 1974, and it’s huge, with 1.4 million square feet. The nearest facilities are in Kearny and Teterboro. Work is supposed to begin this month, and the facility should go live in January 2024.
North Houston, TX: The North Houston P&DC was expanded several years ago to accommodate the consolidation of operations from the Beaumont P&DC (which began in 2011) and from the Houston P&DC (which began in 2013). These consolidations didn’t work out as planned — rather than saving money, they lost $24 million a year — so they were halted midstream. The Postal Service will now use the expansion of the North Houston facility to turn it into a RPDC. Work on the conversion began in January 2023 and will be completed by August. The Postal Service has invested $73 million on this project. If it’s serving as a hub, the potential LDCs include the Beaumont P&DC, the Houston P&DC, and facilities in Austin and Lufkin, as well as the annex in Austin.
Gastonia, NC: The new RPDC in Charlotte is being called the Charlotte/Mid-Carolina Processing and Distribution Center. It will be located in the Northpoint Gateway 85 logistics park in Gastonia, NC. Here’s a streetview of the Gastonia facility. It’s the one on the left; the one on the right is an Amazon warehouse.
The 207 report says the Gastonia/Charlotte RPDC will combine mail processing operations from other facilities, but it remains unclear which. Probably the Mid-Carolina Parcel Support Annex (PSA), and perhaps the Mid Carolina LDC/P&DC (which shares its name with the new RPDC). The Postal Service has approved $86.7 million to build out the new facility, which is expected to be ready in October 2023 (according to the first-wave list) or early 2024 (according to the cost reduction report). Other nearby facilities include those in Raleigh, Fayetteville, and Asheville.
Indianapolis, IN: A new RPDC on the east side of the city — its exact location remains undisclosed — will serve as an S&DC and combine all mail processing operations from four facilities: the P&DC, the High School Road Annex, the Package Sorting Annex (PSA), and the Mail Processing Annex. The P&DC will serve as one of the two S&DCs for Indianapolis, as indicated on the July 2022 presentation, while the other three facilities may be closed. The cost reduction report says that the Postal Service has approved a total of $149.9 million to build out the new RPDC, which is expected to be ready by January 2024 (according to the cost reduction report) or August 2024 (according to the first-wave list).
Palmetto, GA: A new RPDC in Palmetto, Georgia, which is being called the Atlanta South Metro P&DC, will consolidate all the mail processing operations from the Atlanta P&DC, the Peachtree P&DC, the Atlanta Package Support Annex (PSA) in Austell, and the Atlanta Mail Processing Annex (MPA). The two P&DCs will remain active as S&DCs (as shown on the July 2022 presentation). The Postal Service has committed a total of $125.8 million to build out the South Metro facility, which is expected to open in October 2023 (cost reduction report) or March 2024 (first-wave list).
Forest Park, IL: As we learned in the 207 report and ACR filing, the Chicago Network Distribution Center on Roosevelt Road in Forest Park, IL, will be repurposed as the New Chicago DNC and serve as an RPDC. (A second RPDC in Chicago is also in the works.) The Postal Service has allocated $65 million to renovate the facility, remove obsolete equipment, and relocate equipment from other processing plants. The New NDC will combine all mail processing operations from three current processing centers, but it’s not clear which. It will probably include the Parcel Support Annex in Elk Grove, and perhaps the Busse Road processing facility, also in Elk Grove Village. Work on this project began in August 2022 and is expected to be completed by March 2024.
That’s it for the first wave of RPDCs. The second wave will probably include some of the 21 NDCs (a list of them is here), some P&DCs, and perhaps a few more of those massive leased facilities.
— Steve Hutkins
(Featured photo: Interior of the new RPDC in Palmetto, GA. Kendrick Brinson for TIME)