The Postal Service’s attitude toward the Postal Regulatory Commission became more confrontational and dismissive under the tenure of former postmaster general Louis DeJoy, and apparently continues to be so even now that he’s gone.
Background
Docket SS2022-1, Special Study on Issues Related to Flats Operations, was opened on July 14, 2022, to fulfill a requirement of the Postal Service Reform Act, enacted on April 6, 2022. As the PRC described the mandate in its order opening the docket:
“… the Commission shall conduct the Flats Study to ‘comprehensively identify the causes of inefficiencies in the collection, sorting, transportation, and delivery of Flats.’ In addition, the Flats Study should allow the Commission to ‘quantify the effects of the volume trends, investments decisions, excess capacity, and operational inefficiencies of the Postal Service on the direct and indirect costs of the Postal Service that are attributable to Flats.’ A report on the findings of the Flats Study is due ‘[n]ot later than one year after the date of the enactment of [the PSRA].’”
After a series of questions to and answers from the USPS over the ensuing months, the commission issued its 254-page report (Flat Operations Study Report) on April 6, 2023. The study yielded eleven “principal findings” and eight “suggestions” for the Postal Service to consider. In turn, as noted in the report, the 2022 law
“requires the Postal Service, within 6 months, either to develop and implement a plan to remedy each inefficiency identified in the study or else to provide an explanation as to why remedying such inefficiency is impracticable.”
In compliance, the USPS issued its 29-page plan, Postal Service Flats Plan Pursuant to Section 206 of the Postal Service Reform Act of 2022, on October 6, 2023. Not surprisingly, the USPS cited DeJoy’s 10-Year Plan as containing measures to implement most of the commission’s suggestions.
After accepting comments on the USPS Flats Plan, the PRC issued Order No. 6803 on November 17, 2023. Instead of accepting the Postal Service’s submission and closing the docket, the commission concluded that it was lacking in detail and that more information was needed:
“While the Postal Service explains that there are processes to validate potential net financial benefits of initiatives and methodologies for calculating and tracking the results, it does not provide any quantifiable metrics for potential benefits or cost impact results as it describes the initiatives throughout the Flats Plan.
“Furthermore, the Postal Service does not provide a clear timeline for implementing the initiatives, with some initiatives seemingly already implemented and others in various stages of implementation. Additionally, while some initiatives appear to have been implemented as early as FY 2021, there is no timeline for when quantifiable impacts of these initiatives will be available. …
“… Accordingly, the Commission will seek more information from the Postal Service to enable evaluation of the Flats Plan prior to issuing its approval ….”
More questions by and responses to the commission followed, and on December 27, 2024, the PRC issued its 163-page Order No. 8436 approving the USPS Flats Plan in part, but added:
“… The Commission, however, finds that the Flats Plan does not address or only partially addresses certain inefficiencies identified in the Flats Operations Study Report. Therefore, the Commission concludes that overall, the Flats Plan does not provide an adequate response to the issues identified in the Flats Operations Study Report. The Commission requires the Postal Service to provide, within 180 days, a supplemental plan regarding inefficiencies that were not adequately addressed.”
Still dodging
The pursuit of a final plan continues – it was due by the end of June – and an August 25 response to a PRC question illustrates how the Postal Service seems unenthusiastic about providing meaningful answers to the commission:
[PRC Question] “1. Please refer to Section 3.6 of the Flats Plan, which discusses the decommission of Flats Sequencing System (FSS) processing. The Postal Service explains that the more efficient processing on the remaining Automated Flats Sorting Machines (AFSMs) assisted in service performance and may contribute to a reduction in the cost of processing flats.
“a. Please explain how this claim is reconciled with the continued decline in Service Performance scores for flats post-FSS decommissioning.
“b. Please provide the current assessment as to whether FSS decommissioning contributed to the improvement of flats service performance or had no impact on flats service performance.”
[USPS Response]
“a. Efficiency in processing is just one of the many factors that can contribute to service performance. Others include new employee turnover rates and impacts from major weather events, just to name a few, many of which are outside of Postal Service control.
“b. The Postal Service continues to believe that eliminating separate FSS processing could only have helped service performance. However, due to the variety of factors that contribute to service performance, there is no way to quantify the impact of a single factor.”
Observations
The Postal Service’s answers seem cursory, nonresponsive, and insubstantial, to say the least. The commission’s request that the USPS back-up its claim was reasonable, and for the Postal Service to essentially blow-off the question borders on insubordinate.
Attitude aside, the response to (a) simply doesn’t answer the question and can be read to infer that the USPS has no basis for its claim. On what measurable and verifiable information can the Postal Service demonstrate that flats processing on AFSMs is “more efficient” and, moreover, the extent to which that improved service performance? What are the other contributing factors? What proportion of employees assigned to flats processing are “new” (and so what)? To what extent did “weather” impact flats processing overall?
As for the answer to (b), does the USPS rest its assessment of service on beliefs or on data? What are the factors that affect service performance? How are they measured? Why is there no way (i.e., data) to quantify those factors’ impact? It seems the USPS cannot substantiate what it claims because it has no data, and simply hopes the PRC won’t call it for providing a shoddy and inadequate response.