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. 

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.

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.

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

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

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.

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:

As is typical of a meeting of the Postal Service’s Board of Governors, the public session is a series of scripted formalities devoid of the candid remarks and discussion that likely were part of the preceding closed session.  So, during the open session on November 13, the chairman and postal executives read their prepared remarks that, as would be expected, said the right things but offered little of substance.

The closest anyone’s statement came to providing a look at where the agency’s leadership was taking it might be the remarks by Postmaster General Louis DeJoy.

As has become all too apparent in the popular media, the viability of widespread voting by mail, and the Postal Service’s ability to timely process and deliver the associated volume, have become intertwined with other political controversies.

On one side, notably by the White House, vote-by-mail is portrayed as flawed or corrupt, and that regardless of its use, the Postal Service isn’t capable of handling the volume.  Concurrently, for that and other reasons, the administration is continuing its spiteful objection to any funds for the USPS being included in a COVID-related relief bill.

Changes to mail processing and delivery procedures being adopted by the Postal Service have been met with criticism in the general media.  News articles frequently cite customer and labor union concerns over delays in mail delivery and fault the USPS for placing budgets ahead of service.

Many examples

As if to illustrate that running the Postal Service as Postmaster General isn’t like running a corporation as its CEO, Senator Gary Peters (MI), ranking member of the Senate Homeland Security and Governmental Affairs Committee, wrote PMG Louis DeJoy on July 17 asking for “information about operational changes at the US Postal Service that have the potential to affect the quality of service for Americans.”

Peters’ letter was inspired by the reports of plans to modify delivery procedures that were contained in a PowerPoint leaked by a USPS manager in Ohio and other documents. (For more on this, see the July 25 post.)

When the new Postmaster General took office last month, it was widely assumed that he would make significant changes, though the nature of what those changes would be was then no more than speculation.  However, if the information in a leaked PowerPoint presentation that appeared on postalnews.com last week is credible, change may be starting and is focused on cost reduction.

Quick reference links: "The Source", "Document Two", "Publicity", "Another Talk" 

Last Tuesday, June 16, Louis DeJoy was sworn in as the 75^th Postmaster General. Since his May 6 appointment by the Postal Service’s Board of Governors he’d spend weeks working with retiring PMG Megan Brennan, getting briefed on the agency he would be leading. Now the job was his.

Thanks and greetings

As the economic impact of the COVID pandemic came into full force, the consequences for mail volume, and Postal Service revenue, were reflected in the agency’s April financial results. Overlaid on this was the burden of various prefunding obligations and the usual fluctuating valuation of the Postal Service’s workers’ compensation liability.

Volume and revenue

(Continued from April 10, 2020. Full article found in the March 29, 2020 edition of Mailers Hub News.)

House supporters

By voice votes in the Senate on March 26 and the House on March 27, Congress last week passed HR 748, the Middle Class Health Benefits Tax Repeal Act of 2019, a $2.2 trillion program to help the nation’s economy and citizens deal with, and recover from the consequences of the ongoing virus-related crisis. Conspicuously missing was any aid for the Postal Service. Instead, the bill only allowed it to borrow another $10 billion from the Treasury, going even deeper in debt.

A report released early last month by the Postal Service’s Office of Inspector General (A Closer Look at Postal Labor Costs) illustrated the persistence of labor as representing the lion’s share of the agency’s total costs. In turn, it offered ratepayers a glimpse of both the magnitude of the expense and how the elements of the sum have changed over the previous decade.

Despite telling Congress early last year that it was finalizing a ten-year plan, and later explaining the delay in its issuance by the need for its review by oncoming members of the Board of Governors, the document released last week by the USPS, Ready-Now ➔ Future-Ready, The US Postal Service Five-Year Strategic Plan 2020-2024, was somewhat less than what was anticipated.

In a letter sent today to top Postal Service executives, Postmaster General Megan Brennan announced she will be retiring effective January 31, 2020. She's served as PMG since February 1, 2015, succeeding Pat Donahoe. In her announcement, Brennan stated that, when appointed, she committed to serving as PMG for five years, and she will have fulfilled her commitment. More details in the next issue of Mailers Hub News.

A June article in the Alliance of Nonprofit Mailers’ Report dug into the current trend of USPS costs outrunning USPS revenues. The report’s findings revealed that the Postal Service may be doing things that an institution with financial challenges like those facing the USPS shouldn’t do.
The following extracts from the Alliance’s report are provided with their permission.
The Alliance found four areas where costs seem ripe for further examination: