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Other Voices Heard About Proposed Service Standard Changes

 By late June, the Postal Regulatory Commission likely had received more comments than it had expected about the Postal Service’s proposal to change the service standards for First-Class Mail and some Periodicals.

Aside from the briefs and statements of position from the eleven intervenors in the case, plus the commission’s “public representative,” the PRC also got comments from other groups and interested parties, including from 478 individuals from all over the country.  (Whether there was a coordinated campaign behind those isn’t clear; many of the comments didn’t follow a pattern.)

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Mailers Hub Submits Statement of Position to PRC

On June 22, 2021 Mailers Hub submitted its Statement of Position, regarding First-Class Mail and Periodicals Service Standards Changes, before the Postal Regulatory Commission. 

In the two-page statement, the author - Leo Raymond, Managing Director of Mailers Hub - candidly and emphatically summarized the failings in the proposed changes, as well as the rationale behind them. Citing the "appalling abandonment of the customers that they should be striving to retain", the subordination of the role of the Postal Service as a service, and the clear connection between more costly, slower service and a loss in mail volume, he urges the PRC to advise the USPS against these changes. 

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Mailers Warn the USPS: Service Cuts, Price Increase Will Cost Business

Postmaster General Louis DeJoy may have just celebrated his first year in office but he remains resistant to customer input that differs from his perspective about the Postal Service.

Nonetheless, another group of commercial mailers has offered its own warning to DeJoy that his ill-advised service reductions, combined with an exceptionally large price increase, will cost the agency volume (and revenue) it can ill-afford to lose.

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Distilling Information from USPS Responses

Part of the Postal Regulatory Commission’s process for considering a Postal Service request for an advisory opinion – like the one now before it regarding changes to USPS service standards – is the opportunity for intervening parties to ask questions of Postal Service witnesses, based on their written testimony.

Last month, as an intervenor in the case, Mailers Hub submitted questions to three USPS witnesses: Logistics VP Robert Cintron; Stephen Hagenstein, Director, Logistics Modeling and Analytics; and Acting Budget Director Curtis Whiteman.  Some were about vehicle utilization and dispatch times, while others focused on the reasons for the changes that were proposed.  After some debate over what constitutes a “question” (the number that can be submitted is limited at 25), the USPS witnesses filed their responses on June 1.

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Pushing Forward, No Matter What

Clearly Louis DeJoy did his reading – reports by the Office of Inspector General, GAO studies, and such – and probably Envisioning America’s Future Postal Service, the 10-year plan developed by the Boston Consulting Group and released by then-PMG Jack Potter in March 2010.  All of that, plus what he’d been told by his circle of selected advisors and his own strong opinions, likely influenced what eventually emerged in his own 10-year Plan, also released in March (2021).

However, unlike Jack Potter or, for that matter, any of the PMGs who’ve led the USPS over the past two decades, Louis DeJoy has no real, first-hand knowledge of the Postal Service or the businesses of its customers.  Holed-up in his office at L’Enfant Plaza, he’s spent scarcely any time learning about the mailing business or the connected industries that take messages from concept to recipients’ mailboxes.

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As Expected, Clerks Union Opposes Plant Closures

If Postmaster General Louis DeJoy had hoped to avoid opposition from postal labor to his 10-year Plan, such as by avoiding any requests for concessions on labor agreements or wages and benefits, he scuttled them by his recent decision to resume the network rationalization process that was halted in 2015.

As would be expected, the American Postal Workers Union, representing the clerk craft employees who staff processing facilities and retail operations, promptly announced its opposition.  In a typically overwrought statement, the union’s president asserted

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USPS Reports Small Net Loss for PQII

In its Form 10-Q released May 7, the Postal Service reported an $82 million net loss for the second quarter of its 2021 fiscal year (January-March).  Adding its $318 million net income for PQI, the USPS is $236 million in the black halfway through FY 2021, nearly $3 billion better than it had planned and over $5 billion ahead of where it was in the middle of FY 2020.

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Operational Issues May Explain Service Standard Failures

A major focus of the Postal Service’s 10-year Plan, issued March 23, is the need to downgrade service standards for First-Class Mail because the current standards, which haven’t been met for several years, are “unattainable.” The Plan recites various reasons for this situation, including failures in air transportation and in compliance with facility operating plans.

The fundamental absence of operating discipline in USPS processing facilities was highlighted in two audits published in mid-April by the Postal Service’s Office of Inspector General: Delayed Mail at the Lehigh Valley, PA Processing and Distribution Center, issued April 12, and Delayed Mail at the North Houston, TX Processing and Distribution Center, released April 13.

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Will Lowering the Bar Enable Success?

On April 21, the USPS filed its Request for an Advisory Opinion on Changes in the Nature of Postal Services, seeking the Postal Regulatory Commission’s input on changes to the service standards for First-Class Mail and time-sensitive Periodicals. The fifteen-page filing was accompanied by direct testimony from five witnesses and eight “library references” containing supporting data.

Proposal

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Exchange of Letters Shows Rift

Letter exchanged this month between a coalition of industry groups and the Postmaster General illustrate the gap between them regarding the Postal Service’s 10-Year Plan, released March 23.  The industry letter presents a series of concerns, to all of which the PMG takes exception.  Readers can form their own conclusions. Links below. 

Industry Response to 10-Year Plan

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How to Make a Plan, USPS Style

There was a commercial for Toyota that aired several years ago that had the tagline “You asked for it, you got it.”  What “it” was hasn’t been remembered as well as the tag line, but the utility of the line persists.

In this case, given that the Postal Service finally issued its 10-year plan last week, the agency can say “you asked for a plan, you got a plan.”  Congress and the mailing community have been waiting for years for The Plan that the agency’s been promising, and now we can all see whether the result has been worth the wait.

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OIG Reports on Cleveland Drop Shipment Unloading Delays

In an audit report released March 10, Excessive Wait Times to Accept Commercial Mail Shipments at the Cleveland Processing & Distribution Center, the Postal Service’s Office of Inspector General examined the circumstances surrounding the challenges encountered by the facility in late 2020.  As the OIG stated at the outset:

“Due to the COVID-19 pandemic and the November 2020 general election, the US Postal Service’s Cleveland Processing and Distribution Center (P&DC) experienced earlier than normal Peak Season mail, including package volume.  This management alert responds to media and mailer concerns indicating that drivers experienced excessive wait times for drop shipments at the Cleveland P&DC.  Our objective was to assess the efficiency of processing drop shipments at the Cleveland P&DC in the Northern Ohio District.”

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More than Geography

It’s practically part of the routine: when a new boss takes over, a reorganization soon follows.  That step accomplishes many purposes, including setting up a functional and management structure that reflects the executive’s vision for the organization’s best configuration; reassigning or replacing members of the executive’s immediate and next level subordinates; redesigning territorial responsibilities; and revising reporting relationships.

A “reorg” happens at the Postal Service usually after a new Postmaster General is installed, if not more often, and typically impacts functional organization, executive team membership, field structure, or complement levels.  So it’s no particular news that Louis DeJoy began his own reorg shortly after being named PMG last summer.

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Kremlin on the Potomac: Postal Service Communications

Readers old enough to remember the Soviet Union also remember how skilled it was at saying nothing – about anything – no matter what.  If something happened, regardless of whether it was visible to the outside world, it simply wasn’t acknowledged.  A natural disaster?  Never happened.  The disappearance of an important figure?  He’s fine.  A bomber crash into a village?  No bomber, nothing happened.

If outsiders posed a question about any event, the basic answer, if there was one, was denial, deflection, or obfuscation.  The Soviets never admitted to anything going wrong, to any internal failures, or to any event or condition that might break the illusion they so ardently projected or that might provide an outsider a peek into what’s really going on.

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Firing the Boss

After annual reports are released, corporations that didn’t do well often dismiss their top executives in the belief that better results would be produced by their successors.  Sometimes that works, sometimes not.

Analogizing this to the Postal Service, the ongoing service crisis is resulting in calls for the dismissal of the postmaster general.  As with a company, such action is assumed to be key to righting the ship or beginning a positive improvement trend; but also as with a company, that assumes the CEO is the primary factor in the company’s performance.

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The Right Audiences Need to Get the Message

Over the past few months, and especially over the recent holiday season, there were many occasions on which a postal customer – a representative of a commercial mailer, a mailer’s client, or just a retail customer – delivered a message of dissatisfaction about service (to put it nicely) to a frontline postal employee.

Whether a retail window clerk, a city or rural carrier, an employee at the local BMEU or DMU, a customer service rep, or a call-taker at the Business Service Network, that person neither had anything to do with the reasons for the customer’s dissatisfaction and likely had little to go on to offer an explanation or information about the reported service problem.

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PMG’s Comments to MTAC Raise Concerns Over Price Increase

On January 26, speaking to the virtual meeting of the Mailers Technical Advisory Committee, Postmaster General Louis DeJoy gave a broad overview of his developing plans to get the Postal Service back on track after months of worsening service that culminated in a historically bad holiday season.  As transcribed from his recorded remarks:

“... Calendar Year 2020 has been a tough year for the nation and a tough year for the United States Postal Service.  The causal circumstances continue to plague us in early 2021.  As a result, the consequences to many Postal Service customers have been significant, and we acknowledge the impacts our service decline has had on your businesses and our responsibility to restore.

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Parsing the Causes for an Historic Service Collapse – Analysis

Usually, after the busy fall mailing season and the holiday rush, things return to normal for the Postal Service and its commercial mailing customers.  As everyone knows, however, the current environment is anything but normal.

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USPS Issues Post-Election Report

In a perhaps unusual move, the Postal Service released a report in late December reviewing the 2020 election and its role in the vote-by-mail process.  Posted on its Link site on December 30, 2020, the 22-page document, Post-Election Analysis: Delivering the Nation’s Election Mail in an Extraordinary Year, summarizes the agency’s actions in support of the election process.

The report detailed its performance at the national level:

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Will Postage Rates Jump in 2021?

In the wake of the Postal Regulatory Commission’s issuance of a final rule amending the rate-setting process, rumors began to circulate that the Postal Service would seek higher rates by mid-2021 and that the increases would be over 7%.

These stories may have some relationship to facts but are not entirely factual or accurate. Just the same, given that rumors travel faster than facts, it’s important that commercial mail producers have the necessary information to convey to their clients – who may already have heard the rumors.

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