“We Deliver for Amazon”: The Postal Service’s New Priority

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A former postal worker in Greensboro, North Carolina, named Paul Barbot has written two excellent articles for Alternet about his experiences dealing with Amazon deliveries as a City Carrier Assistant (CCA).  The first of them — “The Horrific New Marriage Between Your Post Office and Amazon Sunday” — was published in February, when Barbot still worked for the Postal Service.  The second, “The Real Cost of ‘Amazon Sunday,’” came out a few days ago, not long after Barbot left the post office.

Barbot describes what it’s like serving as an overworked, underpaid non-career employee and how the deal to deliver Amazon packages on Sundays is causing all sorts of problems.  The problems got so bad, in fact, that Barbot had to quit.

Apparently, the high turnover of CCAs is becoming a serious issue.

In its 2014 Annual Report to Congress, the Postal Service noted that while the target for Deliveries per Hour in in FY2014 was 42.9, the actual result was 42.0. The Postal Service offered several explanations for why the target was not met, including the overrun of an aggressive work hour plan and additional hours used to avoid delaying mail during the Christmas season.

The Postal Service also pointed to three other explanations, all of which have to do with delivering for Amazon: the additional workload from Sunday package delivery, the hiring and training of many new non-career employees, and a high turnover rate — in excess of 40 percent — for CCAs.

As part of the Annual Compliance review being conducted by the Postal Regulatory Commission, the Postal Service was asked about the turnover rate in a Chairman’s Information Request.

The PRC noted that in FY 2014 the Postal Service extended the Voice of the Employee Survey to all employees. “Based on the Voice of the Employee Survey results,” asked the Chairman, “what insights were gained about the high turnover rate for city carrier assistants?”

In its response, the Postal Service observed that the FY 2014 VOE index score for non-career employees was actually thirteen points higher than for career employees.  The Postal Service then went on to say the following:

“A review of the FY 2014 exit data indicates ‘Personal Reasons’ as the top cause of CCA resignation. Comments associated with the ‘Personal Reasons’ selection cited life situations that could not be accommodated with the job requirements, for example, dependent care, a desire to finish school, and work schedules.”

The Postal Service thus makes it seem as if CCAs are resigning simply for “personal reasons” that have nothing to do with how they are being treated or how the Amazon deal is causing problems.  Barbot’s Alternet pieces tell a much different story.

 

Walmarting the post office

While the details of the Negotiated Service Agreement with Amazon remain secret, it’s become clear that the Postal Service’s deal to deliver on Sunday involves postal rates that would not be profitable were it not for CCAs, who earn far less than regular career employees.  CCAs are the foundation upon which the NSA with Amazon is based.

In Greensboro, as in many other communities, CCAs are required to work seven days a week so they can deliver Amazon parcels on Sundays.  After “Amazon Sunday” came to Greensboro in November 2014, some CCAs simply could not keep up the pace of working everyday.  They got sick, missed days, and were threatened with being fired.

Barbot, who had been praised as an exemplary CCA during his two previous years, could not do Sundays because his wife works as a nurse on Sundays and he has to stay home to take care of their five children, ages 10 to 2.  Explaining all this to his supervisors did no good.  After he missed several Sundays and was threatened with being released from the Postal Service, Barbot resigned.

According to the Postal Service, then, Barbot chose to resign for “personal reasons,” and the only problem worth worrying about is missing the target for Deliveries per Hour.

But the real problem is that the Postal Service has made a deal with a large private retailer that would not be possible without exploiting non-career workers.  As Barbot says, it’s all about the “Walmartization” of the Postal Service.

 

Amazon gets priority

In his earlier article for Alternet, Barbot observed how Amazon packages are being treated as “gold” and trumping other mail, including Priority.

As an example, he told a story about one day when he couldn’t deliver all his mail and returned with some of his deliveries.  His supervisor came over, obviously annoyed, and said, ““There better not be any Amazon packages in there!”

The supervisor then pulled out two very small Amazon packages and exclaimed, “Great!  Now I’m going to have to take these back out!”

What was especially odd and disturbing to Barbot is that the supervisor wasn’t concerned about the undelivered Priority packages he had returned with.

As Barbot points out, shippers pay top dollar for Priority parcels and expect them to be delivered as expeditiously as possible.  Amazon’s contract uses Parcel Select, which costs significantly less than Priority and normally takes several days for delivery.

Barbot’s story thus raises several questions about the Amazon deal.  Has postal management issued a directive of some sort telling supervisors to give Amazon the gold standard?  Is Amazon receiving premium service on its Parcel Select offerings on other days of the week besides Sunday?  To what extent are policies about Amazon unfair to other mailers and interfering with the overall mission of the Postal Service?

 

About Parcel Select

Since details about NSAs are typically kept secret, one can only speculate about the Amazon deal.  But thanks to retired postmaster Mark Jamison, who went sleuthing through the dockets of the Postal Regulatory Commission back in late 2013, when the Amazon NSA was being reviewed, some information about the deal has come to light.

Though heavily redacted, as is usual with NSAs, the documents Jamison found in the PRC docket revealed that Amazon’s Sunday deliveries used Parcel Select, not the speedier Priority Mail we one might think would be necessary for Sunday delivery.

Parcel Select is a workshare program that provides the Postal Service’s lowest-cost ground shipping option.  It’s also the means by which FedEx and UPS use the Postal Service for “last mile” delivery of their packages.  The big mailers, consolidators, and private shippers presort the parcels and deliver them to the Destination Delivery Unit (DDU) or another entry unit from where they are often delivered in a surprisingly speedy way.

Parcel Select generally takes two to nine days, but if the shippers get the parcels to the DDU by a certain time — Early Bird DDU — the Postal Service can often provide same-day delivery.  Regular DDU — dropping off the parcels after the carriers have left — usually means next-working-day delivery.

For orders placed on Friday, then, Amazon just has to get the parcel to the DDU on Saturday to be reasonably certain of Sunday delivery.  That’s about as fast as Priority Mail but much less expensive for Amazon, since under the workshare system, Amazon can do the presorting itself in its giant warehouses, where non-union workers are paid far less than USPS employees.  The deal also means that the Postal Service must depend on its lower-paid CCAs, since it couldn’t give Amazon a low price if it had to pay career carriers to work Sundays.

 

What’s fair?

While no one has filed a complaint with the PRC about the Amazon NSA, there may be reason to question whether the deal violates one or more of the statutes in postal law addressing matters of discrimination and equity.

For example, 39 U.S.C. 101(d) says, “Postal rates shall be established to apportion the costs of all postal operations to all users of the mail on a fair and equitable basis.”

Along similar lines, 39 U.S.C. 403(c) states, “In providing services and in establishing classifications, rates, and fees under this title, the Postal Service shall not, except as specifically authorized in this title, make any undue or unreasonable discrimination among users of the mails, nor shall it grant any undue or unreasonable preferences to any such user.”

The PRC addressed the issue of discrimination when it initially approved the Amazon NSA back in October 2013, but that was before the agreement went into effect.  Now that it’s possible to see how implementation is actually affecting the mail, perhaps there’s reason to complain.

GameFly has repeatedly cited these statutes in its fight with the Postal Service over its complaint that Netflix has been getting preferential treatment, and the court has upheld the claim.

In the Amazon case, one could argue that some users of the mail — like those who ship Priority — are being discriminated against because they are paying more and getting less than Amazon.

Another aspect of the legal angle has to do with how costs are apportioned.  Several parties in PRC cases have questioned whether competitive products — which includes the Amazon Parcel Select deal — have been priced to provide sufficient contribution to the Postal Service’s institutional costs.  If not, then market-dominant products may be unfairly subsidizing competitive products.

The incident Barbot relates would seem to indicate that Amazon is receiving something better than Priority mail service on a product that is priced substantially lower.  Under the circumstances, one wonders if the Postal Service is meeting the attributed costs of the Parcel Select product, let alone the institutional costs.

The issue of attributable costs was also addressed when the PRC first reviewed the Amazon NSA.  The PRC’s order on Docket MC2014-1, which approved the deal, indicates that the Commission can follow up on the matter as part of its annual compliance review, now underway, but the only information made public is that the deal is good until October 29, 2018.  The data on costs and revenues are classified as non-public.

 

“We Deliver for You”

Even if it turns out that the Amazon deal is legal, it’s worth questioning whether it makes good business sense.  The Postal Service probably believes that the deal involves large volumes, hence the good price it gives Amazon, but what about all the mail that’s getting short-changed as a result?

FedEx and UPS also use Parcel Select for their huge contracts with the Postal Service for the last mile of their low-price shipping category.  Are these shippers getting second-class treatment compared to Amazon?

And what about the small businesses that pay top dollar to use Priority Mail?  Just because they don’t mail in the volumes that Amazon does, is it really fair for them to pay so much more for slower delivery?

Another issue is how the Postal Service treats its responsibilities with respect to the Universal Service Obligation, which includes treating all areas of the country equally.  The Postal Accountability and Enhancement Act amended Title 39 to allow the Postal Service to treat competitive products differently from market-dominant and permitted special pricing through NSAs, but the law still recognizes that universal service is the guiding principle of American postal services.

Since Sunday delivery for Amazon is limited to certain areas of the country, the question thus arises, is the Postal Service diverting resources in ways that are unfair to rural and suburban areas and violate the USO?

At the same time that mail service nationwide is declining as a result of closing mail processing plants, the Postal Service is building capabilities that seem intended to serve only a limited part of the American public — primarily upscale urban neighborhoods — and it’s giving preferential treatment to a single mailer, Amazon.

And that raises one final question: Who does the Postal Service work for, anyway?

(A tip of the hat to Mark Jamison for his help on this post.  Mark, it should be noted, had some serious objections to Barbot’s reporting, including his statement that the CCA position was created to promote NSAs (not so), as well as Barbot’s anti-union comments.)

(Photo credit: Amazon on USPS truck; Amazon & Priority composite image; Parcel Select label; Amazon on USPS truck)

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