You can’t call this a game-changer, but the U.S. Postal Service’s inspector general is offering some indirect support for the mail carrier’s plans to close more than half of its mail processing plants.
In a newly released round-up, the IG’s office pulled together audits of 32 previous area mail processing consolidations and found that 31 had a valid business case. Those business cases “were supported by adequate capacity, increased efficiency, reduced work hours and mail processing costs, and improved service standards,” the roundup says. The IG’s office did note, however, that four of the 31 consolidations were poorly executed and recommended that the Postal Service improve communications with stakeholders.
For USPS executives, the findings nonetheless offer evidence that they know what they’re doing in pushing to close up to 252 of about 461 remaining processing facilities. That plan, which would erase some 28,000 jobs, has sparked a torrent of opposition from postal workers and politicians. Last week, Sen. Olympia Snowe, R-Maine, became one of the latest members of Congress to go on record against the proposed downsizing.
“This plan has profoundly negative implications for timely and reliable mail service in northern, western and eastern Maine, a geographically vast and rural area of our state,” Snowe said in a news release after visiting an eastern Maine processing and distribution facility that employs 183 people and is slated for consolidation with another plant.
According to Snowe, the consolidation is supposed to save $7.6 million. But in the release, she declared herself “unpersuaded.” She is convinced, however, that it would “disproportionately slow down mail delivery to rural areas of Maine.”
Sentiments like that prompted the Postal Service last month to freeze closings of all processing plants and post offices until mid-May, although studies will proceed. As part of the downsizing, the mail carrier is also pursuing a change in service standards that will drop overnight delivery of some first-class mail.
At the end of a dismal year for the U.S. Postal Service, let’s end on an upbeat note: For all its problems, the nation’s mail carrier is the best-performing among those of major industrialized countries.
That’s the judgment of Oxford Strategic Consulting, a British firm that recently took a look at the operations of 19 national posts, including those of Great Britain, China, India and Japan. When it came to delivering letters and other mail, the U.S. Postal Service averaged almost 269,000 pieces per delivery employee last year, far ahead of runner-up Australia Post, where the average was about 167,000 pieces, the Oxford study found.
The Postal Service didn’t fare as well on package delivery, placing only sixth in the number of parcels per delivery employee among the 19 nations. Overall, however, it was ranked as the top performer, based on a matrix of three broad yardsticks: Provision of access to vital services, operational resource efficiency, and performance and public trust.
USPS officials are “pleased,” Giselle Valera, the agency’s vice president for global business, said in a statement. “Our employees take great pride in working hard every day on goals that lead to operational efficiencies and garnering the faith of the American people in the United States Postal Service.”
The full study is not yet available online, although Oxford provided the executive summary to Federal Times. Here, however, is a link to the press release summarizing some of the findings.
So, how big a deal is the U.S. Postal Service’s freeze on closings of post offices and mail processing plants?
Less than you might think, perhaps.
No doubt, today’s abruptly announced moratorium was made under mounting political pressure from Capitol Hill Democrats. “Cave-in” was how Reps. Darrell Issa, R-Calif., and Dennis Ross, R-Fla., described it in a news release.
But the long-term consequences for the Postal Service’s downsizing plans won’t necessarily be that pronounced. Last week, for example, a USPS spokeswoman told Federal Times that processing plant closings would start in April at the earliest. The five-month freeze would push that timeframe back only until May. As American Postal Workers Union President Cliff Guffey stressed on the union’s web site, the freeze “is a temporary reprieve.”
And by getting in the way of the Postal Service’s cost-cutting agenda, members of Congress have put themselves on the line with an implied promise to come up with a better alternative. Or, to quote from a letter signed by 20 senators last week: “We believe it is very important to give Congress the opportunity to reform the Postal Service in a way that protects universal service while ensuring its financial viability for decades to come.”
But to state the obvious (a favorite pastime here in the nation’s capital), lawmakers have already had that opportunity and thus far failed to deliver. Don’t be too hard on them: Fixing an organization that’s losing almost $100 million per week would tax the savviest turnaround artist.
For the APWU and other postal unions, the answer is to let the Postal Service tap into as much as $75 billion in purported pension fund overpayments. Even when you discount the fact that the Government Accountability Office recently dismissed the idea that any erroneous overpayments occurred, a refund is not in the cards as long as Republicans control the House, which they will for at least another year. Short of some miraculously lucrative new business lines or Americans’ mass rediscovery of the continuing relevance of snail mail, it’s hard to imagine postal revenues rebounding any time soon.
Lawmakers may have thus put themselves in a box. If they can’t find out a way by May, they could have to concede that the Postal Service’s route—however distasteful for thousands of communities and USPS employees—is basically the only one they have.
Better start stocking up on your first-class “Forever” stamps because they will likely cost a penny more in January, under a U.S. Postal Service regulatory filing today. The proposed increase to 45 cents is part of a package that would boost the price of a postcard from 29 cents to 32 cents and also raise the cost of sending international letters, standard mail and periodicals, the agency said in a news release. (For a fuller rundown, check out this fact sheet.)
Under a 2006 law, the Postal Service can raise rates relatively easily as long as the cumulative increase doesn’t exceed the inflation rate as measured by the Consumer Price Index, which in this case is 2.1 percent, according to the Postal Service. The proposed increases were filed today with the Postal Regulatory Commission, a five-member oversight body. The PRC now has 45 days to review them to make sure they don’t violate the inflation cap, USPS spokesman Dave Partenheimer said.
Assuming the commission gives its OK, the increases would take effect Jan. 22 and would be the first for a first-class stamp since May 2009. All told, the rate changes will generate about $888 million in new annual revenue, Partenheimer said.
“The overall average price increase is small and is needed to help address our current financial crisis,” Postmaster General Patrick Donahoe said in a statement. “We continue to take actions within our control to increase revenue in other ways and to aggressively cut costs. To return to sound financial footing, we urgently need enactment of comprehensive, long-term legislation to provide the Postal Service with a more flexible business model.”
If anyone’s wondering, by the way, the Postal Service’s appeal of a PRC smackdown in last year’s “exigent” rate increase case is still technically alive.
In that case–completely separate from what was proposed today–the Postal Service sought to raise rates beyond the inflation cap on the grounds that the recession had dealt an extraordinary blow to mail volumes. After the commission unanimously rejected that argument in September 2010, the Postal Service appealed the decision to the Court of Appeals for the D.C. Circuit, which sent the case back to the PRC this May.
There it remains; earlier this month, however, the Postal Service asked for a stay of all proceedings until Dec. 15. Proposals by the Obama administration and members of Congress could change the ratemaking landscape, USPS lawyers wrote.
“Obviously, it would be grossly premature to attempt to anticipate what, if anything, might come out of these initiatives,” they said. “Yet by the same token, neither would it seem prudent to ignore these developments entirely.”
The National Association of Letter Carriers announced today that it is hiring the Lazard Group investment bank, along with former presidential adviser Ron Bloom, to help develop “a viable long-term, pro-growth business plan for the Postal
Service,” according to a news release.
Bloom, who also comes out of the financial sector, is no stranger to troubled enterprises, having worked as President Obama’s “car czar” during the bailout of the auto industry. He went on to serve as assistant to the president for manufacturing policy, but recently left his White House post for family reasons, according to news reports.
Bloom also has long-standing ties to the United Steelworkers. While Lazard and organized labor might look like an odder fit, NALC President Fredric Rolando said that the union has had some prior dealings with Lazard and liked what it had done.
In a conference call with reporters, Rolando made clear that the overall goal is to come up with a bullish alternative to the cost-cutting agenda–such as eliminating most Saturday delivery–that the Postal Service is pursuing to deal with a plunge in revenue. Not clear, however, is precisely what Lazard and Bloom are supposed to produce (a report, legislative proposals?), how quickly they might produce it and how much it will cost the union.
“I really couldn’t tell you exactly how this is going to unfold yet,” Rolando said. The move was announced during a national NALC conference on the Postal Service’s financial crisis. The mail carrier’s other three unions are not involved.
If only on paper, the U.S. Postal Service’s financial condition has just shown some stunning improvement. That’s because Congress pushed back a $5.5 billion retiree health care payment originally due last Friday (i.e., Sept. 30) until Nov. 18, according to short-term spending legislation approved in the last week.
Sept. 30 was the final day of fiscal 2011, for which the Postal Service had been predicting a total loss of about $10 billion, in part because of that legally required retiree health care obligation. With that payment now delayed until November, the expected 2011 deficit plummets to $4.5 billion.
Of course, the mail carrier has a similar payment due next September, meaning that its 2012 retiree health care obligations just doubled to around $11 billion. Not to worry, though: USPS leaders say they can’t make the installment originally due Sept. 30 and chances are that they won’t be able to make next year’s, either–even though both still count on its books as expenses.
After all, it’s only money.
Tags: U.S. Postal Service
Say this for snail mail: it’s never been victimized by a computer hacker.
That, in essence, is the point of a new U.S. Postal Service television advertising campaign that seeks to make a virtue of the mail’s retro qualities.
“This is how people and business connect,” runs the voiceover in one ad as the video shows a jaunty letter carrier on her rounds. “Feeling safe and secure that important letters and information don’t get lost in thin air or disappear with a click, but are delivered from person to person.”
Take that, Internet.
The two commercials, aimed at boosting businesses’ use of the mail, aired for a couple of days last month and then went back up over the weekend for a run on network and cable channels that will last through this Saturday, USPS spokeswoman Patricia Licata said in an email.
The campaign is the first of its kind in almost a dozen years, Licata said, “and we feel that it’s time to promote a channel that is too often overlooked and underestimated.” Calling the information proprietary, she declined to give the campaign’s cost, but said that the Postal Service’s total ad spending in fiscal 2011 was about $147 million, roughly the same as the preceding year.
Once again, there’s so much happening with the U.S. Postal Service that it seems simplest to package (no pun intended) the latest developments together. Here goes:
1) In that rare bit of news that doesn’t revolve around the mail carrier’s cratering finances, the Postal Service today announced that it’s changed a long-standing policy so living people can be depicted on postage stamps. Under the previous guidelines, an individual had to be dead for at least five years to be so honored; starting next year, Americans “will see acclaimed musicians, sports stars, writers, artists and nationally-known figures” on stamps while they’re still with us, according to a USPS news release.
Postal officials are inviting members of the public to submit the top five living individuals they would like to see on stamps via Facebook and Twitter. People can also actually use a stamp to write the Citizens’ Stamp Advisory Committee, c/o Stamp Development, Room 3300, 475 L’Enfant Plaza SW, Washington, DC 20260-3501. And before anyone rushes to nominate their grandkids (or even a favorite mail carrier), keep in mind that the advisory committee is looking for folks “who have made extraordinary contributions to American society and culture,” according to the official guidelines.
2) Back to grim realities: The Postal Service’s four unions are wrapping up preparations for tomorrow’s nationwide “Save America’s Postal Service” day, which will feature rallies in all 435 congressional districts from 4 p.m. to 5:30 p.m. local times. The chief goal is to build public and political support for legislation by Rep. Stephen Lynch, D-Mass., that could open the door for the Postal Service to take advantage of tens of billions of dollars in pension overpayments identified by an outside actuary and the agency’s inspector general. The bill already has 215 co-sponsors, including some Republicans, but has so far gone nowhere in the House, where other GOP lawmakers dispute whether any such overpayments occurred.
3) On Friday, Sen. John McCain, R-Ariz., jumped into the scrum on the other side by introducing a Senate version of a postal overhaul sponsored by Rep. Darrell Issa, R-Calif., that was just approved last week by a House oversight subcommittee. McCain has a history of—at least every now and then—working successfully across party lines, but the debate preceding that subcommittee vote showed just how deep partisan divisions run on postal issues.
4) And, as federal agencies undergo another bout of shutdown jitters, let’s not forget that the Postal Service has a stake in the latest Capitol Hill showdown. Under the continuing resolution that would keep agencies operating past the Oct. 1 start of the new fiscal year, the deadline for the Postal Service to make a $5.5 billion retiree health care prepayment would also be pushed back from Sept. 30 to Nov. 18. If lawmakers don’t pass the CR by Friday, the Postal Service is headed for an embarrassing default, according to repeated warnings from Postmaster General Patrick Donahoe.
A three-member arbitration panel will begin hearings Dec. 5 on a new contract between the U.S. Postal Service and the National Rural Letter Carriers’ Association, according to a posting on the union’s web site.
The panel’s neutral member will be Jack Clarke, a member of the National Academy of Arbitrators and a veteran of the NRLCA-USPS southern area arbitration panel, the posting said. The union has named Joey Johnson, its director of labor relations, to the panel while the Postal Service has appointed Robert Dufek, its manager for labor relations strategies.
The first round of hearings will go through Dec. 8, according to the Postal Service, while additional sessions could continue into April if needed. The hearings will kick off more than a year after an impasse was declared last November in contract negotiations between the two sides. They nonetheless continued to talk for months after that, only deciding this summer to take the plunge to arbitration.
The hearings will alternate between USPS headquarters in Washington and the union’s headquarters in nearby northern Virginia, a Postal Service spokeswoman said.
It’s official: the U.S. Postal Service is out with a Federal Register notice today on proposed changes to mail delivery standards tied to its plans for closing several hundred processing plants with a loss of some 35,000 career jobs.
The notice adds detail to what USPS officials have already revealed; of particular interest to postal workers, the notice (in a footnote) says that the downsizing plans should not affect network distribution centers, air mail centers, remote encoding centers and international service centers, although those facilities are a small minority of the total.
The 30-day public comment period runs through Oct. 21.
Tags: U.S. Postal Service