Anyone familiar with the Postmaster General’s 10-Year Plan knows that part of the strategy to balance the agency’s books includes not only price increases but cost reductions from improved efficiency in USPS operations. Many readers, particularly noting the changes now underway in the Postal Service’s processing, transportation, and delivery networks, conclude that some of the forecasted efficiency and savings will be derived from fewer facilities and a smaller workforce.
Yet reading comments from various postal sources provides a confusing, and somewhat contradictory, picture of whether such an outcome is really to be expected.
Another example of where there won’t be any cuts was offered in an article in New York’s Altamont Enterprise. The report was following-up on “an unverified rumor that a regional post office executive was visiting [local] post offices to gather information to help with consolidation.” Responding to the newspaper, a postal spokesperson stated that “sites are being evaluated for the creation of the centers, but that these centers will not result in the closure of any offices.”
“As we move forward with this initiative, customers will see no changes to their local post office retail operations. No post offices will be closed and PO Box service will not be changed. … There will be no employee lay-offs as part of this effort.”
In other words, as the USPS establishes thousands of new sort-and-delivery centers (S&DCs) to consolidate and, allegedly, make more efficient its delivery operations, and as there’s the likelihood that the centers will increase drive-time and related costs, in turn requiring more carriers, the USPS is offering no indication that facility costs will be reduced or, for that matter, that vacated space will enable relocation to smaller facilities or use for revenue generation.
Government Executive reported that Rep. Bill Huizenga (MI 4th) “recently questioned the consolidation plan’s impact on his district, saying it lacked transparency and would have negative impacts on mailers.” His letter stated that
“This one-size-fits-all proposal originating from your ‘Delivering for America’ plan is likely to negatively impact the constituents I represent with a decline in the quality of service.”
Earlier, the article noted, Rep. Pat Ryan (NY 8th) “said Postmaster General Louis DeJoy was ‘sadly mistaken’ if he thought he could ‘mess with post offices’” in his district.
“Mail carriers from my district are also particularly concerned about the delays to service, added hours in commute time, and the destabilizing effects this plan will have. Our community knows that the journey can be long and there are additional risks posed by driving mail trucks on the highway or long distances in the snow.”
A Postal Service spokesperson had previously told Government Executive that “The goal of this initiative is to make significant improvements to the delivery network to better serve the American public and our business customers more efficiently and effectively.” The potential for cost reductions or other savings was not mentioned.
Meanwhile, another article in Government Executive reported that the PMG “vowed to double down on and accelerate his proposed reforms.” Among those would be “significantly reducing work hours by closing some facilities and removing other inefficiencies.”
Already, the article noted, the USPS is shuttering “annexes and contract facilities around the country that management has labeled as ‘inefficient.’”
According to a report by Save the Post Office, the USPS has informed labor groups that planned consolidations of operations at the Eugene (OR) and Medford (OR) facilities into the planned Portland (OR) RPDC would enable the elimination of one management position and 53 craft positions, contributing to projected savings of $7.1-to-$12 million.
Similar consolidations of some operations from the Macon (GA) and Augusta (GA) facilities into the new Atlanta RPDC were projected to enable the elimination of nine management positions and 37 craft positions, helping generate cost savings of $4.7-to-$7.8 million.
In trying to reconcile these data with other projections, the article observed that
“Another possibility is simply that the Postal Service has overestimated the cost savings. That’s been an issue with previous cost-reduction initiatives, including the Network Rationalization plan on plant consolidations in 2012 … .”
On the other side of the ledger, Multichannel Merchant reported that the Postal Service is planning to insource long-haul transportation now handled by contractors, noting that some contractors that move mail from plants to delivery units have already been told their contracts are terminated.
“A US Postal Service plan to insource all line hauling of mail and parcels between hubs and local delivery units, which had been handled by contractors, will be completely phased in by 2025, according to a source with knowledge of meetings with USPS officials. … [C]ontractors are being notified that their services are no longer required and will be handled instead by USPS employees and assets. The services included transport of mail and parcels from area hubs to local post offices for morning delivery, then picking up outbound mail in the afternoon for injection into the system.”
A postal spokesperson was quoted as stating that as part of the PMG’s Plan “The Postal Service continues to move forward with its … plan, which includes optimizing the postal network. One aspect of optimization includes finding the best way to transport products from site to site. Some contract carrier companies we have contracted with will be affected.”
That the PMG has been clever with the postal labor unions has been apparent, assuring them that they won’t lose members because of facility closures, converting temporary workers to career (and dues-paying) status, and – now – replacing cost-efficient contracted transportation with fixed-cost career postal drivers. The inconsistency and lack of transparency in the network changes and other related activities raise questions about how costs are supposed to be reduced, but perhaps the PMG prefers we just shouldn’t ask
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