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.

That a variety of factors have impacted the USPS and its performance is well-known, but the service degradation that’s occurred over the past several weeks has been more severe than any such decline in recent memory.  Everyone from citizens still looking for holiday packages, to commercial mailers and their clients asking when time-sensitive mail will be delivered, to logistics companies dealing with expensive delays in getting shipments unloaded at postal facilities, all are asking what’s behind this worsening operational collapse.

The obvious sources

In the case of the current condition of USPS service, there are many contributors to the situation – some readily acknowledged, others not so much.

Absenteeism.  Perhaps the most obvious and often cited is “employee availability.”  Beginning early last spring, the spreading pandemic drove employee absenteeism in all industries, including the USPS, as workers became infected, stayed home to quarantine, to care for others who were sickened, or simply to avoid being infected.

Not surprisingly, neither infection nor absenteeism occurred uniformly; some areas, like metropolitan New York initially, and later other cities like Detroit and Philadelphia, and then Los Angeles, had exceptional levels of infection while other areas suffered relatively less.

Moreover, losing ten workers more than usual in a facility with five hundred on staff is less disruptive than losing ten workers at a post office or delivery unit with only fifty.  And who is absent also matters; a dock unloading operation may slow if only 75% of its normal complement is available, but it’s another matter if a delivery route’s only carrier is absent.

Hiring additional workers to compensate poses its own challenges.  Aside from the tedious process involved – including ensuring hires are trustworthy with mail – the USPS is competing with the private sector for desirable workers.  Especially in high-cost areas, postal jobs are seen as more challenging and lower-paying than alternatives.  Of course, once hired, a new distribution clerk or letter carrier needs training and experience to become familiar with routines and prepared to work independently and efficiently.

(Converting temporary workers to career employees, as the USPS is now doing, may solve a short-term need but results in long-term obligations and less staffing flexibility.)

Transportation.  As business slowed when the pandemic took hold, the aviation infrastructure used to move goods, people, and the mail shrank accordingly.  Though there’s now a slow recovery, the world’s airlines parked up to 70% of their aircraft and canceled thousands of routes as the demand for air travel shrank, in turn sharply decreasing the available capacity to move freight and mail by air.

The USPS relies heavily on the FedEx network and other carriers besides commercial airlines, but the loss of “lift” impacted more than just the Postal Service, and shipments normally moving by air were forced to use slower ground transportation.  Even when air capacity was available, it cost more, often wasn’t along the most direct route, and the additional legs and handlings added to transit times even for “expedited” mail.

So long as air service is less available for mail usually moved by that mode, like First-Class and Priority Mail, it will be difficult if not infeasible to maintain service levels – but even that should not cause the delays now being reported.

Parcels.  People spending more time at home found that ordering goods online was preferable to going to stores – if any were even open.  Existing online retailers and others that quickly pivoted from brick-and-mortar experienced a sharp increase in online orders that, in turn, rapidly increased the volume of items being shipped to purchasers.

Facing an increase of twenty or forty percent or more may be a manageable challenge for a company like UPS, whose business is moving packages and that has the flexibility to quickly adapt to demand, but it became a serious problem for the Postal Service.

Though the added revenue was welcomed, the agency’s infrastructure – designed mostly to move letters and flats – was ill-equipped to handle a surge of bulkier parcels.  Packages quickly consumed floor space, overwhelmed sorting equipment capacity, and jammed delivery vehicles.  Parcels and bundles of flats competed for time on sorters that handled both.  And moving and delivering the new volume of parcels required more workhours per piece than letters and flats, adding to the demands on an already pandemic-impacted workforce and increasing the related costs.

The frosting to this cake was the practice of major postal competitors, notably UPS, of limiting holiday volume from their customers, leaving them to enter it instead into the already saturated postal parcel stream.  As noted, the additional revenue from parcels is good, but USPS operations is now drowning in the added volume, resulting in service poor enough to end the parcel surge all on its own.

The less obvious

Challenges related to absenteeism, transportation, and parcel volume have been well-reported, but underlying issues have received less or very different coverage.

Planning.  If the typical pattern held, the USPS began planning for the 2020 mailing and holiday seasons right after the 2019 seasons ended.  Based on experience and trends, the agency developed its plans for what it likely foresaw as less volume in 2020, albeit it skewed by an uptick caused by election-related mail in the fall.

Plans for working with election officials were implemented, reflecting the Postal Service’s pre-existing encouragement for using the mail for balloting, primarily to build mail volume, not because it foresaw the role vote-by-mail would play in an election during a pandemic.

As was seen, the spring and summer of 2020 quickly put the USPS off balance.  Though it activated its pandemic contingency plan, the normally slow to respond agency still struggled to react to circumstances.  (Whether it’s been adapting its plan as it goes, based on recent experience, is unknown.)

Politics I.  In the 2016 elections, the postal unions not only supported the losing candidate but faced a new president with a private sector orientation who wasn’t considered a friend of organized labor.  This was reinforced by his 2018 plan to reshape the federal government – that discussed readying the Postal Service for possible privatization – and a contemporary task force specifically focused on the USPS.

This stiffened the unions’ political opposition to the president and their commitment to work toward his defeat in the 2020 election.  (Of course, to the president, the unions’ opposition was equated with the USPS institutionally, adding to his dislike for the agency and all that it represented.)

In turn, when Louis DeJoy was selected as postmaster general, the unions readily tagged him as a proxy for the president, sent to do his bidding which, at that time, was assumed to be not only the privatization of the Postal Service but manipulation of mailed ballots to the president’s benefit.  The unions’ target list soon thus expanded to include not only working to support the president’s loss in the election but the dismissal of his agent at the USPS as well.

Bad timing.  When DeJoy took office, he quickly absorbed the findings of two audit reports prepared by the USPS Office of Inspector General, one about managers’ failure to control overtime, and another about the cost of delayed or extra transportation trips, such as from plants to post offices.  Apparently oblivious to how he was perceived or to the concurrent challenges facing postal operations, he ordered that overtime and transportation usage be brought under control.  Whatever were his exact instructions, they were readily interpreted to ban both overtime and extra or delayed trips.

The service consequences of these orders, or of their misinterpretation, soon became clear and were leapt upon by the unions as evidence that DeJoy’s purpose was as they alleged.    Perhaps not accidentally, attention also soon was drawn to the ongoing removal of redundant processing machines and of underutilized collection boxes, and these actions, also attributed to DeJoy, were cited by the unions to support their claims about his intentions.

Politics II.  Though soon there will be a new administration – one that the postal unions backed at the polls and that they expect will support their interests – Louis DeJoy still is at the helm of the USPS.  This, to the unions, is unfinished business.

Perhaps the most stridently adversarial of the postal unions, and certainly the one that demonstrates the most old-school antipathy toward both postal management and commercial mailers, is the American Postal Workers Union.  This was illustrated by its ubiquitous media comments over the summer and election season, where it had a leading role in shaping public perceptions about the USPS, its service performance, and the alleged reasons for a variety of situations.

Its leaders have been heard to express a desire to dethrone DeJoy, so it doesn’t take a keen strategist to realize that an easy way to pressure the governors – who have sole authority to dismiss him – would be to create widespread dissatisfaction with USPS service performance.

No-one in the USPS would dare infer that there’s covert union activism, let alone any aimed at undermining Louis DeJoy, but craft employees do the real work, and their attitudes and performance directly influence service.

Ultimately, DeJoy will be on the hook for USPS performance, but will that be the result of his actions or those of others intent on ousting him?  It’s speculative, of course, whether the union is cueing its members to facilitate criticism of management (and DeJoy), but if it were, no-one in the union leadership would be so careless as to leave fingerprints.

Management control.  In normal times, USPS field operations are supposed to run on schedules.  Managers are equipped with the tools, built on the agency’s pervasive data infrastructure, to monitor workload and plan the staffing needed to process and deliver mail according to those schedules, thus meeting service standards.

How consistently field managers actually use those tools is an open question, and OIG audits have repeatedly found that a variety of shortcomings, from excessive overtime to delays in processing and transportation, are based on field managers’ failure to follow established procedures.  In turn, it’s arguable that the growing operational disruptions in early- and mid-2020 led to more “spontaneous” management than to greater use of available operational tools and processes.

This behavior in field facilities exposed a disconnect between headquarters executives and field managers and, in turn, between what headquarters says is (or is supposed to be) happening in the field and what customers actually are seeing.  The best examples of this are in conference call exchanges between USPS executives and industry representatives, including service providers and several from Mailers Hub, who inform HQ that the situation on the ground isn’t always as executives are being told by the field.

Theoretically, the status of field operations is visible to senior managers and executives based on data gathered electronically, supplemented by reports by field managers.  As has become apparent over the past months, however, what HQ is being told may not be what’s actually the case.  For example, what facilities report about delays in unloading drop shipments often is different from what the companies making those deliveries are hearing from their drivers; and what facilities report as processing delays, or as delays in delivery, is not what’s reflected in actual customer experience.  It’s not uncommon for HQ staff to learn from industry callers about delays – which they then say they will investigate.

That senior operations executives have to hear from customers about what’s going on in the field – as opposed to having that information already in front of them – raises serious questions about the usefulness of internal USPS data systems, as well as the reliability of the information being provided by the field.  In the days of manual reports, underreporting backlogs and burnishing condition reports – “pushing the pencil” – was widely assumed to be a discountable factor in the related data, but such falsity was supposed to be a thing of the past in an era of automated data gathering.

The upshot of the present circumstance is a loss of faith in what customers are being told by HQ operations, not because individuals are deliberately deceptive, but because they apparently are less informed about, and therefore less able to exercise control over, what’s going on in the field that they should be.  Decisions made by well-intentioned people lacking reliable information can lead to ineffective or unwanted results.

Using data, or not.  One of the Postal Service’s long-standing requests of the mailing industry has been for data about incoming mail, presumably so that facilities, their staffs, and daily operating plans can be aligned and ready to process it.

Accordingly, mail producers and logistics companies preparing drop shipments are required to use the FAST system, both to schedule those shipments and to provide advance information about what they contain.  Separately, mail producers entering automation mail are required to submit detailed electronic documentation describing the corresponding mail.

Despite the requirements imposed on commercial mailers to generate and present such information, many observers question if the USPS understands what it’s getting, or has (or properly employs) the systems to extract and interpret it, or has managers and supervisors who both can access it and are trained in its use.  Supposedly, all of that would have been essential to fulfill the purpose for requiring it.

However, many instances have been found, or strongly indicated by circumstance, that facilities are unaware of what’s arriving and, accordingly, are not optimizing the unloading of trailers to minimize delays.  Not having available, or not making good use of, data about incoming mail prevents identification of shipments whose contents could be cross-docked or bypass incoming primary distribution.  Similarly, once trailers reach docks for unloading, it appears the steps of scanning pallets and containers as they’re unloaded and sequencing them for processing are being missed.

As a result, some facilities appear to have lost track of what’s in the waiting trailers in their yards and/or of what’s on the workroom floor.  Mailers report tracking data showing newer mail has been processed while older shipments have not.  This reinforces the conclusion that facilities have failed to follow basic steps, like scanning, sequencing, and maintaining inventory awareness, thus inhibiting effective workflow management and impeding “first-in-first-out” processing.

Unloading trailers and processing their contents when facilities are properly staffed is one thing, but trying to process mail as timely as possible while dealing with a pandemic and a flood of parcels is even more challenging if available data is neither accessed nor used effectively.

A corollary consequence of unloading and processing delays that are just being realized is that it’s been more than 45 days since some automation-rate mail was submitted.  As a result,  when it finally is “seen” by processing equipment, the piece records for that mail (in the documentation submitted at the time of mailing) are no longer in the Postal Service’s system, causing all those pieces to be considered “undocumented.”  Should the number of such pieces exceed the permitted threshold, which would be likely if an entire mailing was delayed, a sizeable assessment could result.

The USPS has become aware of this and is evaluating a policy.  However, using data it has, had the agency compared mailings submitted and mailings processed, it could have proactively identified which were likely to be delayed by 45 days or more, and mailers could, in turn, have been assured that any assessments would be waived.

Sorting it all out

Trying to find the causes of the current service collapse is like trying to separate sugar from salt: how much is caused by each contributing factor?  Absenteeism, the lack of air transportation, and the flood of parcels are obvious contributors to current service performance and are beyond the reach of postal management.

However, the question remains about how much other factors are contributing to, or worsening, the current situation.  For example, how much can be attributed to the actions of field management, failures to use data or follow standard procedures for scanning and sequencing mail, unreliable facility condition reports, and decisions by operations executives based on inadequate information?

To be clear, this isn’t meant to suggest that the vast majority of the postal workforce isn’t giving good effort to move and deliver the mail as best that difficult circumstances will allow.  Nor is it meant to suggest that operations managers and executives aren’t honest, dedicated, and trying to enable the best service possible under challenging conditions.  And it certainly isn’t meant to evaluate or defend Louis DeJoy, the governors, or anyone else.

Rather, it’s meant to question why the wheels have fallen off USPS service so quickly and so badly, to look beyond the obvious, and ask whatever else may be going on.  Ultimately, and regardless of whether all the causes of the service slump are ever acknowledged, there will be consequences.

Primary will be the loss of customer confidence in the USPS.  If a piece of mail – whether a Christmas card, a solicitation, a bill, or an important parcel – took weeks to reach its destination, both the sender and the recipient will be disinclined to use the Postal Service again.  Poor service, not the reasons for it, will be remembered.

Another consequence will be doubts among the clients of the commercial mailing community.  If their messages and advertising can be sidetracked for weeks in favor of other, higher-rate mail, or get stuck in queues of trailers or on misplaced pallets in plants, they’ll have doubts about using the mail next time, rather than competing media.

To many in the commercial mailing industry, the past several weeks have raised doubts whether there’s any consistent, effective control over postal operations.  Regardless of organizational structure and line-of-sight management, USPS operations seem to be led by senior officials not receiving accurate information about facility conditions, issuing operating procedures to field managers who don’t follow them, and reliant on data systems that don’t provide an accurate picture of real conditions. 

Industry representatives aren’t supposed to be telling USPS executives about unload times or service delays.  As much as promises of investigation and correction of industry-reported problems may be desirably responsive, it would have been better if the responsive executive knew of problems from the sources who should have reported them, and had the opportunity to correct them earlier.

How much business will be lost by the Postal Service because of the pandemic is unknown, as is how much more will be lost because of the service collapse from which it’s still not recovered.  What is certain is that promises and plans, structural reorganization, or positive media stories about the USPS or postal workers aren’t what’s needed.  Restoring and maintaining consistent, quality service is, and nothing more.

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