Although everyone knows the Postal Service will implement its plans regardless of what the Postal Regulatory Commission advises, the USPS nonetheless is following the required process and seeking an advisory opinion from the PRC on its latest round of service reductions.
Filed October 4, the request, styled editorially as Operational and Service Standards Changes to Meet Statutory Requirements for Reliable, Efficient, High Quality Service and Financial Sustainability Through an Integrated Mail and Package Network, the 55-page document and accompanying workpapers explained how the USPS is reorganizing its processing network, eliminating afternoon collections at most post offices, and redefining service standard calculations.
Throughout, the USPS spun its proposal, as the filing’s title stated, as enabling service and financial goals, even though many might argue that “high quality service” would not result, and that challenges to “financial sustainability” go well beyond whatever savings may result from the proposal.
Repeating DeJoy’s claims that his predecessors failed to operate an efficient network, the filing explained the proposed revisions:
“The Postal Service’s current network has not been appropriately adjusted to account for volume and mail mix changes, including the substantial decline in Single-Piece First-Class Mail and increase in package volume, leading to significant inefficiencies. These initiatives will comprehensively transform these operations to fix the problems that exist today and create a network that enables the integrated movement of mail and packages in a precise and cost-effective manner far into the future.
“Specifically, we intend to systematically redesign and invest in our outmoded processing facilities to create a network of Regional Processing and Distribution Centers (RPDCs) and Local Processing Centers (LPCs), which deploy standardized and logically sequenced operating plans and schedules for the movement of mail and packages, more sortation equipment, optimized transportation routes, and improved operating tactics to increase throughput, gain productivity, and increase asset utilization across the country. Through this process, we will also eliminate unnecessary annexes and contracted facilities that have been deployed throughout the country in an ad hoc fashion.”
DeJoy’s obsession with filling trucks was shown in the passage about eliminating afternoon collections:
“…we intend to implement on a nationwide basis the Regional Transportation Optimization (RTO) initiative, which rationalizes our regional transportation network (i.e., trips between the retail/delivery network and the processing network) by eliminating routes and increasing truck utilization, and which will also improve the efficiency and velocity of the processing network.”
Later in the document, the Postal Service argues
“Our current local transportation network is dictated by our current service standards and business rules, and by legacy thinking based upon a bygone era of significant single-piece letter mail volumes. Overall, this network constrains the transportation for a regional geography and results in inefficient transportation with limited ability to reduce the number of truck trips or optimize truck capacity. This is due to the fact that transportation is predicated on the principle that originating mail must get to the processing network on the day it is collected from customers, no matter how far away from the processing network it is entered.”
Clearly, DeJoy has upended the view that the USPS must – first – provide service, replacing it with the notion that providing service is conditioned on its being “efficient” (under his criteria). As he’s stated before, reduced service for customers who are at a distance from his processing centers is a “price that has to be paid”; he doesn’t want his operations waiting for their mail, as indicated in the filing:
“… by no longer requiring all mail to wait for the volumes collected from the furthest away Post Offices, we will be able to accelerate the mail that is within the 50-mile radius of a RPDC through processing.”
Another part of the Postal Service’s proposal is revising how service standards are calculated so that there’s no apparent delay for mail impacted by RTO. Simply put, the Postal Service is proposing to “start the clock” differently for mail from an RTO origin compared to other mail.
Another element of its service standard changes would involve the transit time between facilities, specifically adding four hours to the time associated with a service commitment, e.g., a three-day standard would apply to mail with a transit time of 24 hours, not the current 20 hours.
Though this creates the appearance of improved service, it doesn’t factor is the originating and destinating times, i.e., the time to reach and be processed at the origin plant, and the time to be processed, dispatched, and delivered at destination. Though this new way of calculating service might suit the Postal Service’s purposes, it may not be matched by how customers experience and evaluate USPS service.
For “turnaround” mail, the impact of RTO was clear:
“… processing facilities that cancel Single-Piece First-Class Mail on automated equipment will have a 2-day standard for turnaround Single-Piece First-Class Mail originating from 5-digit ZIP Codes 50 miles or less from the cancellation location. If the originating volume is from a 5-digit ZIP Code beyond 50 miles of the cancellation location, the turnaround standard for Single-Piece First-Class mail will be 3 days.”
Almost as an aside, the USPS noted two other changes.
It “will not count Sundays or holidays as transit days for volume entered on a Saturday or the day before a holiday.” The Postal Service asserted that “this approach helps to enable us to improve our operational efficiency while providing customers with reliable service expectations.” Also, it will “change the Service Performance Measurement system to enable measurement at the 5-Digit ZIP Code level, rather than the 3-Digit ZIP Code level.” The agency claimed that “this more granular service performance measurement will be more understandable to our customers and provide them with greater performance visibility.”
The Postal Service devoted seven pages to its argument that the proposal meets statutory requirements “by better balancing adequate service with efficiency and financial sustainability,” though its arguments understandably presented only its own perspective. Clearly, whether the balance is what it should be is subjective.
Overall, the filing was another thinly-veiled promotion for the PMG’s 10-Year Plan, presenting more rosy promises for improvements as more of The Plan’s elements are implemented. As with any promotional material, benefits are defined in the context of the advocate’s perspective, and any negative impacts are explained away. Regardless, the essence of the proposal is clear: reduce service and spin it in a way that makes it sound like a good thing.
Though the PMG has told legislators that changes to the processing network will be deferred until after the election, the filing makes it clear that the service standard changes will be implemented early next year:
“… the Postal Service would not implement the service standard changes within the scope of this Request any sooner than 90 days after the filing of this Request.”
As noted earlier, the Postal Service is requesting an advisory opinion solely to conform with a legal requirement. Though it claims it will consider the opinion, it likely will repeat past practice and do exactly what it plans to do, so ratepayers should expect the planned reductions in service and related changes to take effect the first weekend in January 2025.
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