Yesterday the Postal Service released its service performance reports for the second quarter of FY 2016 (January – March). Overall, the reports show that on-time delivery has been improving — after dropping precipitously in January 2015, when phase 2 of Network Rationalization began — but the numbers continue to fall short of the Postal Service’s targets.
For example, in Q2 2016, 93.9 percent of 2-day Single-Piece First Class (SPFC) mail was delivered on time, compared to 90.4 percent during the same period last year. About 80 percent of 3-to-5 day SPFC mail was delivered on time, compared to 63 percent during the same period last year. Despite this improvement, the results are still below the annual targets for SPFC — 96.5 percent for 2-day mail and 95 percent for 3-5 day.
The same holds true for the other classes of mail. There’s been some improvement, but the Postal Service is still not meeting its targets, especially for 3-5 day mail and periodicals.
The issues surrounding service standards and performance for delivery times have been a subject of controversy and concern for several years, going back to September 2011, when the Postal Service first announced that it intended to lower the standards as part of its Network Rationalization plan to consolidate about 250 mail processing plants.
In June 2015, the American Postal Workers Union took the Postal Regulatory Commission to court over its decision to dismiss the union’s complaint that the Postal Service was failing to meet even the new slower service standards. At issue is the question of whether the service standards are legally enforceable requirements or simply expectations or goals, like the Postal Service’s targets. The case is still in court. (More on that here.)
In August 2015, the USPS Office of Inspector General issued a management alert recommending that further changes in operations and plant consolidations should be put on hold until service performance stabilizes at a satisfactory level. (More on that here.)
Just a few days ago, the Postal Regulatory Commission issued its annual report about the Postal Service’s performance on several measures, including on-time delivery. Despite signs of improvement, the Commission found much to criticize.
The Commission observed that in FY 2015 the Postal Service did not meet any of its service performance targets for on-time delivery. In most cases, performance was at its lowest levels for many years.
The Postal Service provided three explanations — bad winter weather, the growth of package shipping, and the implementation of phase 2 of the Network Rationalization plan.
In response, the Commission observed that “severe winter weather is an annual occurrence,” so the Postal Service needs to prepare in order to avoid adverse impacts to service performance.
The growth in package shipping — particularly Parcel Select, the type of mail used by UPS and FedEx for “last mile” delivery and some Amazon mail as well — led to problems because volumes exceeded what the Postal Service’s air network partners could carry. Some mail had to be shifted from air to ground, which contributed to slowing down the mail.
The implementation of phase 2 of Network Rationalization was probably the biggest factor in the drop in service performances. While many of the plant consolidations have been deferred, employee work shifts were changed in January 2015 to take advantage of the slower service standards that went into effect at the time. Many plants were partially or completely consolidated as well. These operational changes slowed down a lot of mail.
While acknowledging these problems, the Postal Service told the Commission that it “does not anticipate any service performance degradation or negative customer impacts resulting from the remaining Phase 2 consolidations.” In fact, once Network Rationalization is completed, says the Postal Service, service performance will improve.
The Commission responded with skepticism, stating that “it seems unlikely that the eventual completion of the second phase of Network Rationalization will be sufficient to improve nationwide performance to the degree needed for all FY 2016 targets to be met.”
The Postal Service posts its quarterly service performance reports here. The Postal Regulatory Commission posts more detailed version of the reports here. We’ve uploaded the PRC versions to Google Drive here. Previous posts about service standards and performance can be found here.
Below are a couple of tables showing the service performance for Single Piece First Class mail and Standard mail.
Single-Piece First Class Mail: Percent On Time
|Overnight||2 Day||3-5 Day|
|FY2015 Q2 (SPLY)||90.6||90.4||63.1|
|FY2016 Annual Target||96.8||96.5||95.25|
Standard Mail: Percent On Time
|FY2015 Q2 (SPLY)||85.7||54.5|
|FY2016 Annual Target||91.0||91.0|
(Photo: Washington Post)