How the Postal Service foundered: Parceling out the responsibility

November 1, 2012


Over the last several months the situation surrounding the fate of the Postal Service has become increasingly clear.

How can that possibly be the case, when Congress has utterly failed in its efforts to pass postal reform legislation, when mail volumes continue to drop, when troubling news about financial losses continue to appear, and when the agency has now reached its borrowing limit with the Treasury?  How can such an unsettled and unsettling situation seem so clear?

The situation is clear because no matter what Congress eventually does, Postmaster General Patrick Donahoe and the Board of Governors have already won.  Their views of what the Postal Service should be, whom it should serve, and how it should serve them have prevailed.  The reality is that as the Postal Service has moved forward with initiatives like POST Plan and the “rationalization” of the mail processing system, the PMG and the BOG have degraded the network and its potential in such a way as to make a change in course not just expensive but impossible.

The initiatives to degrade and dismantle the network have worked in conjunction with a business plan focused almost entirely on advertising mail.  The leaders of the Postal Service have set the course in a direction that cannot be easily changed. The Postal Service has always been an example of inertia; like a massive oil tanker, it changes direction neither quickly nor easily.  The PMG and the BOG have displayed outright disregard for the advice of their regulator and total contempt for providing service to the American public.  They have put the postal ship on a course that will inevitably result in fewer jobs, decreased service, and ultimately privatization.


Ignoring the public interest

The politicians both in Congress and in the Administration have essentially abandoned the American people in their handling of the Postal Service.  They have allowed the stilted vision of the BOG — a vision born of the same views that have fostered the growth of inequality throughout our economy — to take precedence over the needs and welfare of the American public.  They have sanctioned a continued attack on American labor through policies that destroy good middle-class jobs and replace them with temporary and part-time jobs with no benefits.  They have set the stage for millions of Americans to lose essential services and an essential infrastructure, while creating the potential for abuse by a predatory financial services industry.

It should come as no surprise that most of those in Congress are willing to sacrifice the Postal Service to limited business interests.  These are the same folks that have almost universally perpetuated the myth that “entitlements” — a term that insidiously demeans what ought to be basic social responsibilities of a civilized nation — are the source of our economic policies.  These are the folks that insult and assault public workers as if a job in the public sector — one that provides useful and necessary public goods — is somehow less valuable or less important than a job in the private sector.

Politicians of both parties have embraced macroeconomic policies that result in the decline of incomes for the vast majority of Americans while ensuring that the benefits of society are unequally reserved for the few at the top.  They degrade the quality of life and economic opportunities for the vast majority of Americans with policies designed primarily to satisfy the financiers.

Ignorance, incompetence, favoritism, bullying, and obsession: Just another day at the Post Office

October 6, 2012


On September 30, 2001, the management of the Postal Service published a document entitled Outline for Discussion: Concepts for Postal Transformation.  As the title suggests, this document described the terms of future discussions about what the Postal Service was and what it should become.  In April of 2002, the Postal Service issued another document, this one entitled simply Transformation Plan 2002.

In light of the current problems facing the service and particularly the problems raised by the recent advisory opinion issued by the PRC regarding Mail Processing Network Rationalization (MPNR), looking back at these two reports is instructive.  Both documents question the very basis of universal service, and they are laser focused on a future model of the United States Postal Service as a privatized entity.

What becomes apparent from the 2002 plan, as well as subsequent documents that address the progress of implementing the plan, is that the senior management of the Postal Service saw the future in terms of a greatly reduced network.  From the standpoint of retail, Postmaster Jack Potter and then Patrick Donahoe called for the closure of as many as 15,000 post offices.  For the mail processing network, the vision suggested that the future was in outsourcing much of the mail processing network through worksharing and similar initiatives.


Finding love in all the wrong places

March 25, 1984 — my second night working for the Postal Service.  I’m sent to the basement of the old WPA-era post office for scheme training, the exercise of memorizing the local office’s delivery network so I can sort mail to routes.  The basement of the building is a confusing labyrinth of offices, locker rooms, mechanical rooms and the like.  Having only been down there once, the night before, I get turned around on my way to the designated room.

I turn a corner and walk into what appears to be a break room off of a boiler room, and before me I see the Superintendent of Delivery Operations having sex with one of the female clerks.  I back out of the room quickly before anyone sees me and find the room where I’m supposed to be.  Needless to say, my hour-long memorization session isn’t very fruitful.  My concentration is somewhat distracted.

During my nine years at that office, the events of that second night come to seem less and less extraordinary.  I see a number of fellow employees fired for theft of either mail or postage stock.  I see supervisors who appear to be drunk on the job, and more than a few employees have chronic substance abuse and attendance problems.  There isn’t much discipline and there isn’t much organization.  Those who work, whether they be carriers or clerks, are rewarded with more work, while those who slough off seem to escape much if any scrutiny.  Often it seems that promotions to supervisory positions are based on getting the most unproductive employees off the floor.


How Network Rationalization speeds up Standard Mail and hastens the demise of First-Class

April 18, 2012

Sometime over the next few days, the Postal Service is expected to publish the final rule implementing the service standard changes that are the foundation for the Network Rationalization plan to consolidate over 220 mail processing plants.  First-Class Mail that is currently delivered overnight will be delivered in two days, and much of the mail delivered in two days will take three.  Periodical mail will slow down as well.

When it published the proposed changes in service standards in the Federal Register in December, the announcement stated, “The Postal Service is not proposing any revisions to the service standards for Standard Mail and Package Services pieces mailed within the contiguous forty-eight states.”

That’s only partly true.  The service standards for Standard Mail will remain 3 to 10 days for the continguous US, but the plant consolidations will lead to some significant changes in delivery times for most Standard Mail. 

The changes are probably not what you’d expect.  The Postal Service is actually planning to speed up Standard Mail. 

The Postal Service hasn’t said much about this, but the big customers who send a lot of Standard Mail are probably well aware of what’s going on.  The changes, after all, are being made for their benefit.

The reconfiguration of the processing network is not simply about eliminating “excess capacity” — like sorting machines that run eight hours instead of twenty — or about adapting the system to declining volumes of First-Class Mail.  It is also about reconfiguring the network to better serve the big mailers.

The Postal Service’s biggest customers — its National and Premier accounts — have been among the staunchest advocates of downsizing because they see it as key to keeping postal rates low.  At the same time, these customers are concerned about relaxing service standards for First-Class Mail and Periodicals, as we saw in their responses to the marketing survey that showed slowing down the mail would cost the Postal Serive $5 billion worth of business. 

It turns out that the reconfiguration of the processing system may have an effect no one has been talking about: faster delivery for Standard Mail.


Changes in Service Standards for Standard Mail

You can see the changes in the service standards for Standard Mail on the USPS website.  There’s a page on the site called the “National Customer Support Center,” which provides information primarily useful for big mailers and members of the MTAC — the Mailers' Technical Advisory Committee, a group of important industry stakeholders.  The Support Center has a page called “Modern Service Standards,” with links to database tables for the current and future service standards.  You can also see a visualization of the data on a map page.

Looking at the maps for a particular three-digit ZIP code, it’s easy to see how First-Class mail will be affected.  The website provides a map of current standards and a second map for the future standards.  in comparing them, you can see the area for one-day delivery disappears, and the area for two-day gets smaller; the area for three-day takes over most of the map.


Mid-Island, NY (005)

If you look at a pair of maps for Standard Mail, however, something much different happens.  Here, for example, are the maps for Mid-Island, New York.  The first map shows the service standards for Standard Mail under the current system, and the second map shows how things would change with the Network Rationalization plan.

As the first map shows, in the current processing system, there’s a checkerboard pattern with the area nearest the Mid-Island facility getting the mail in five days (light blue); regions in the northeast get delivery in six days (dark blue) or seven (yellow); the Midwest and most of the West, seven or eight days (brownish-red); and the Northwest, eight or nine (dark green). 

Under the new system, as seen in the second map, the checkerboard disappears, and there are basically three homogenous zones, with delivery ranging from six to eight days (for the continental US).  The three-day area close to the facility gets a little bigger as well.

A post office worth preserving

January 18, 2012


[Mr. Jamison serves the town of Webster in the mountains of North Carolina as its postmaster.  He has written extensively on postal issues.  In keeping with the USPS Administrative Support Manual, Mr. Jamison does not "speak for or act on behalf of the Postal Service."  These are his thoughts on where things stand and where we ought to be headed.  Mr. Jamison can be reached at —Ed.]

FOR MANY MONTHS NOW, postal management and a chorus of pundits have delivered one message: Out-of-control deficits are dooming the Postal Service, and it will survive only if management is given the authority to radically downsize the system.  Half the country's post offices and processing plants must close, Saturday delivery must go, service must be reduced, and over two hundred thousand jobs must be cut.  

These steps, however, will not ensure the survival of the Postal Service.  This is not a vision for the future.  It's an invitation to a funeral.  

After Postmaster General Patrick Donahoe spoke at the National Press Club at the end of November, it should have been clear to anyone following the trials and tribulations of the USPS exactly what vision postal senior management had for the future of the institution.  Mr.  Donahoe stated that it was his goal to wring $20 billion of costs out of the system within the next few years.  He essentially demanded free rein from Congress to disassemble the postal network as we know it.

The vision expressed by Mr. Donahoe was one of declining mail volumes, an entity that had outlived its relevancy in a technological age, and the need for a business model which transformed an institution of national infrastructure into simply another player in the mailing and delivery business.  He spoke of a future that consigned the purpose and the past of a national treasure to the dustbin of failed business models, right next to the graveyard of buggy whip makers.

The plans advanced by senior postal management involve shedding much of the current retail network and well over half of the plant facility network.  In addition, the service standards that have made the Postal Service useful and reliable were to be revised downward in what appeared to be a relentless quest for mediocrity.

The plans also involved eliminating tens of thousands of good, middle-class jobs and replacing many more with low-wage casual workers, while also dismantling retirement and health benefit systems that have served generations of workers well.

What Mr. Donahoe offered was a vision that has become popular among a small segment of the American political class.   It is a vision of an impotent public sector, a downsized, out-sourced, minimum-wage work force, and it shows a complete disregard for infrastructure.   It is a view of globalization come full circle, America as a third-world country.

Not long after Mr. Donahoe’s speech, several members of Congress awoke from their slumber and began seeing the future Mr. Donahoe proposed.  As calls from their communities became more alarming, telling of closed post offices and shuttered plant facilities, and as it became apparent that the proposed changes were not merely a matter of rightsizing postal operations but dismantling them and denigrating service, Congress began showing heightened interest, eventually demanding a moratorium on some of the proposed changes.

Yet even after agreeing to a moratorium on plant and post office closings, the Postal Service continued with the procedures and steps needed to close facilities.  Even after the Postal Regulatory Commission (PRC) found in its Advisory Opinion on the Retail Access Optimization Initiative (RAOI) that the Postal Service’s plans to rationalize the network had very little foundation, the Postal Service continued with requests for vendors to take over the hub-and-spoke operations that would be eliminated by plant closings.

The fact is the PRC found, as many of us have been saying all along, that the Postal Service’s plans were less about finding a successful business model than they were about simply carving up the postal network into bite-size chunks.  The RAOI decision returned to many of the same points raised in previous decisions, like the exigent rate case and the five-day delivery case — primarily that the Postal Service’s plans lacked substance. 

The plans espoused by the management of the Postal Service appear less the articulation of a successful outcome, the re-envisioning of a successful business model, than they are the actions a vulture capital firm might undertake when dissolving a business by extracting whatever value might exist and leaving the rest to “creative destruction.”  No one from the Postal Service has yet offered a picture of what a successful outcome might be.  Actually that isn’t terribly astonishing since it would be awfully hard to describe success when your every action is built towards taking the enterprise apart.


AT THIS POINT, the story is clear in terms of what got the Postal Service in these straits.  We know the excessive extraction of funds from the Postal Service by the poorly conceived 2006 Postal Accountability and Enhancement Act (PAEA) has resulted in non-operational deficits.  We know too that various retirement accounts have been over subscribed and that other accounting devices, like accounting for workman’s compensation obligations, have been rigged to transfer funds from the Postal Service to the Treasury.

We know too that volumes have dropped, and while some of that may be due to changing technology, a good bit is due to the ongoing recession and some may even be due to the continual atmosphere of crisis that the postal management has ginned up.

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