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Slower Mail Has Become A Fact of Life

Summary:
People keep asking about when will Biden fire trump appointee Louis DeJoy? President Biden can not fire Dejoy. Federal law prevents the president from terminating the postmaster general under any circumstances. The nine-member board of governors nominated by the president and confirmed by the Senate has the power to do so. Only five members of the board may belong to the same political party. In turn the board selects the postmaster general. The PG is not subject to Senate approval. Once appointed, the postmaster general can only be removed by the board and it need no justification for doing so. With the appointment to three vaccines, Biden can flip the Board. “How slower mail has become a fact of life: USPS Service Performance and Postal Reform,”

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People keep asking about when will Biden fire trump appointee Louis DeJoy? President Biden can not fire Dejoy. Federal law prevents the president from terminating the postmaster general under any circumstances. The nine-member board of governors nominated by the president and confirmed by the Senate has the power to do so. Only five members of the board may belong to the same political party. In turn the board selects the postmaster general. The PG is not subject to Senate approval. Once appointed, the postmaster general can only be removed by the board and it need no justification for doing so. With the appointment to three vaccines, Biden can flip the Board.

How slower mail has become a fact of life: USPS Service Performance and Postal Reform,” Save The Post Office, Steve Hutkins

Slower Mail Has Become A Fact of Life

Last week the Postal Service published its service performance reports for the first quarter of fiscal year 2022 (Oct-Dec 2021). This is our first opportunity to see any details about how on-time delivery has been going since Oct. 1, 2021, when the USPS introduced lower service standards for First Class mail and began a historic shift from using planes to trucks for transporting mail long distances.

The on-time scores are much improved over the first quarter of last year — one of the worst in modern postal history — but they are well below the targets promised by the Postal Service last summer when the changes in standards were reviewed by the Postal Regulatory Commission for an Advisory Opinion.

Under a provision in the postal reform bill that just passed the House and that’s now heading to the Senate, we may not have to wait for quarterly on-time data in the future. Section 201 of the bill requires the Postal Service to maintain a website dashboard with data on a weekly rather than quarterly basis.  (The USPS already has a dashboard with quarterly data, as does the USPS OIG; the PRC is inviting comments about its beta dashboard. There’s been a dashboard with weekly reports on the STPO website for nearly a year.)

A new dashboard like this will make USPS on-time delivery data more transparent and accessible, so mailers and the public will have a better idea of how the Postal Service is performing. Unfortunately, whatever good the dashboard may provide in the way of transparency will be undermined by what the postal reform bill does with regard to delivery speed itself. Another section of the bill essentially ratifies the slowdown that DeJoy implemented in October as part of his 10-year plan.

Revising the transportation clause of “Postal Policy”

Title 39, which created the Postal Service in 1970, begins with a section entitled “Postal Policy” — 39 U.S. Code § 101. It’s only 400 words or so, but it’s like the Preamble to the Constitution, and it’s probably the most frequently quoted passage in the history of postal legislation:

The United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people. The Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people.

Section 101 proceeds to say (in part f) that when selecting modes of transportation, the Postal Service “shall give the highest consideration to the prompt and economical delivery of all mail.” That means using planes when appropriate.

Since 1970, the Postal Policy section has been revised only once — in 2008, a minor modification was made regarding how the Postal Service made contracts with airlines. Section 208 of the reform bill will change the language of the transportation passage in Section 101 in a much more significant way. The revised version would read as follows, with the new phrases in italics:

In selecting modes of transportation, the Postal Service shall give highest consideration to the prompt, economical, consistent, and reliable delivery of all mail in a manner that increases operational efficiency and reduces complexity. Modern methods of transporting mail by containerization and programs designed to achieve cost-effective overnight transportation to the destination of important letter mail to all parts of the Nation shall also be a primary goal of postal operations.

As discussed in this previous post, these phrases — “consistent,” “reliable,” “operational efficiency” and “cost effective” — were all key words repeatedly invoked by the Postal Service in its testimonies for the Advisory Opinion on changing service standards. And that phrase “reduces complexity” refers specifically to the Postal Service’s argument that “surface transportation is generally less operationally complex than air transportation: the former requires fewer ‘touches’” (Advisory Opinion, p. 67).

It’s interesting to note that a report by the Congressional Research Service offers a different interpretation of Section 208. CRS suggests that it refers to the acquisition of the next-gen delivery fleet, which will be more economical and reliable than the current fleet of aging trucks.

But that interpretation doesn’t hold up. The report about the legislation from the House Oversight Committee explains that Section 208 “would make minor adjustments to the considerations the Postal Service must make when deciding which modes of transportation should be used to deliver mail. Specifically, the section would add the requirement that transportation not only be prompt and economical but also consistent and reliable.” In other words, the issue is not old trucks versus new but the mode of transportation — ground or air.

Section 101 of Title 39, and particularly the transportation passage, came up frequently during the PRC’s Advisory Opinion process. Intervenors in the docket, including the APWU and postal advocate Douglas Carlson, argued that slowing the mail by shifting to trucks constituted a violation of Section 101. The Postal Service disagreed. The Commission found merit and flaws in both sides of the argument and did not come to a clear conclusion on the matter.

The issue may become moot. Section 208 of the reform bill will make it much easier for the Postal Service to justify using trucks instead of planes. Having bent the law when it slowed down the mail, the Postal Service will be able to say that the new law has codified its new transportation policy.

Making the mail more “reliable”

When the Postal Service presented the PRC with its plan for relaxing service standards for First Class mail and shifting to ground transportation, it gave two justifications.  One was that using trucks would save money, about $170 million a year (after factoring in over $100 million in lost revenue caused by slower delivery times).

After reviewing the plan in detail, the Commission said it was “not able to confirm the cost benefits in future years of implementation,” and the projected cost savings weren’t very significant anyway — just “3.4 percent of total transportation costs for FY 2020 and less than a quarter of one percent of the total FY 2020 operating expenses of $82 billion” (Advisory Opinion, p. 109).

The PRC may review the actual cost savings when it does its annual compliance review in January 2023. The USPS Inspector General may do an audit before then. It’s possible a full accounting may never take place.

The second justification for slowing First Class mail was that lower service standards and the more predictable behavior of ground transportation would make it possible for the Postal Service to make delivery more “reliable.” The metric for reliability was on-time service performance — the percent of mail volume that meets the service standards.

In recent years the Postal Service has achieved about 92 percent on-time for First Class mail, with the exception of single-piece mail traveling long distances, which typically scores around 80 percent. DeJoy’s plan was going to fix all that. The Postal Service said it would achieve or surpass on-time scores of 95 percent in all categories of First Class. Mail delivery would be more “reliable.”

In his testimony and cross-examination of USPS witnesses, Mr. Carlson examined how the speed of delivery was impacted by various factors (the “root causes” for delays), not just the mode of transportation. He argued that shifting to trucks would not improve performance to the extent the Postal Service claimed. The Commission did its own analysis and came to the same conclusion: The Postal Service “should consider a 95 percent on-time target as aspirational, due to the highly dynamic factors involved in the postal mail network” (Advisory Opinion, p. 5).

For the rest of this year, the 95 percent target will not even be “aspirational.” In its FY 2021 Annual Report to Congress, the Postal Service states that its target for First Class composite is 91 percent. It now says that it will meet or exceed 95 percent “once all elements of the plan are implemented.”

The Postal Service did not mention any such caveats during the Advisory Opinion process. Vice President Robert Cintron testified to the PRC that “we expect to set service performance targets at 95 percent once the new service standards are in place, and we expect to meet or exceed them consistently upon implementation of our proposed service standard changes during all times of the year.”  It’s not clear what elements of the 10-year plan have yet to be implemented before the USPS will be able to reach 95 percent.

(Update: In a footnote to a filing today with the PRC, submitted after this post was published, the Postal Service says it never said that changes in service standards would alone be enough to reach 95 percent. As evidence it points to a Federal Register notice on August 11, 2021, in which it denies ever claiming that it would reach this target “instantaneously with the service standard change.” But this Notice came out three weeks after the Advisory Opinion was completed. The Postal Service also explains what else it will need to do to reach 95 percent: “For example, the Postal Service will aim to meet operating plans, will seek better utilization rates for its surface transportation network, will aggregate and consolidate loads at origin locations, will pair certain dispatches with package volumes, and will more optimally route and transfer via hubs and surface transportation centers.” The Postal Service did not offer this explanation during the Advisory Opinion process.)

Service Performance for Q1 FY2022

The service performance reports published last week provide district-by-district data for each of the categories of First Class mail — single-piece and presort, with delivery standards of 1, 2, 3, 4 and 5 days. Note that before the changes in standards, the categories were 1, 2 and 3-5 days (with 99 percent of 3-5 day mail being 3-day), so the reports have a composite figure to make comparisons with the past possible. Here’s a summary of the scores on the national level. (The single-piece report is here; the presort is here.)

Last week the Postal Service published its service performance reports for the first quarter of fiscal year 2022 (Oct-Dec 2021). This is our first opportunity to see any details about how on-time delivery has been going since Oct. 1, 2021, when the USPS introduced lower service standards for First Class mail and began a historic shift from using planes to trucks for transporting mail long distances.

The on-time scores are much improved over the first quarter of last year — one of the worst in modern postal history — but they are well below the targets promised by the Postal Service last summer when the changes in standards were reviewed by the Postal Regulatory Commission for an Advisory Opinion.

Under a provision in the postal reform bill that just passed the House and that’s now heading to the Senate, we may not have to wait for quarterly on-time data in the future. Section 201 of the bill requires the Postal Service to maintain a website dashboard with data on a weekly rather than quarterly basis.  (The USPS already has a dashboard with quarterly data, as does the USPS OIG; the PRC is inviting comments about its beta dashboard. There’s been a dashboard with weekly reports on the STPO website for nearly a year.)

A new dashboard like this will make USPS on-time delivery data more transparent and accessible, so mailers and the public will have a better idea of how the Postal Service is performing. Unfortunately, whatever good the dashboard may provide in the way of transparency will be undermined by what the postal reform bill does with regard to delivery speed itself. Another section of the bill essentially ratifies the slowdown that DeJoy implemented in October as part of his 10-year plan.

Revising the transportation clause of “Postal Policy”

Title 39, which created the Postal Service in 1970, begins with a section entitled “Postal Policy” — 39 U.S. Code § 101. It’s only 400 words or so, but it’s like the Preamble to the Constitution, and it’s probably the most frequently quoted passage in the history of postal legislation:

The United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people. The Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people.

Section 101 proceeds to say (in part f) that when selecting modes of transportation, the Postal Service “shall give the highest consideration to the prompt and economical delivery of all mail.” That means using planes when appropriate.

Since 1970, the Postal Policy section has been revised only once — in 2008, a minor modification was made regarding how the Postal Service made contracts with airlines. Section 208 of the reform bill will change the language of the transportation passage in Section 101 in a much more significant way. The revised version would read as follows, with the new phrases in italics:

In selecting modes of transportation, the Postal Service shall give highest consideration to the prompt, economical, consistent, and reliable delivery of all mail in a manner that increases operational efficiency and reduces complexity. Modern methods of transporting mail by containerization and programs designed to achieve cost-effective overnight transportation to the destination of important letter mail to all parts of the Nation shall also be a primary goal of postal operations.

As discussed in this previous post, these phrases — “consistent,” “reliable,” “operational efficiency” and “cost effective” — were all key words repeatedly invoked by the Postal Service in its testimonies for the Advisory Opinion on changing service standards. And that phrase “reduces complexity” refers specifically to the Postal Service’s argument that “surface transportation is generally less operationally complex than air transportation: the former requires fewer ‘touches’” (Advisory Opinion, p. 67).

It’s interesting to note that a report by the Congressional Research Service offers a different interpretation of Section 208. CRS suggests that it refers to the acquisition of the next-gen delivery fleet, which will be more economical and reliable than the current fleet of aging trucks.

But that interpretation doesn’t hold up. The report about the legislation from the House Oversight Committee explains that Section 208 “would make minor adjustments to the considerations the Postal Service must make when deciding which modes of transportation should be used to deliver mail. Specifically, the section would add the requirement that transportation not only be prompt and economical but also consistent and reliable.” In other words, the issue is not old trucks versus new but the mode of transportation — ground or air.

Section 101 of Title 39, and particularly the transportation passage, came up frequently during the PRC’s Advisory Opinion process. Intervenors in the docket, including the APWU and postal advocate Douglas Carlson, argued that slowing the mail by shifting to trucks constituted a violation of Section 101. The Postal Service disagreed. The Commission found merit and flaws in both sides of the argument and did not come to a clear conclusion on the matter.

The issue may become moot. Section 208 of the reform bill will make it much easier for the Postal Service to justify using trucks instead of planes. Having bent the law when it slowed down the mail, the Postal Service will be able to say that the new law has codified its new transportation policy.

Making the mail more “reliable”

When the Postal Service presented the PRC with its plan for relaxing service standards for First Class mail and shifting to ground transportation, it gave two justifications.  One was that using trucks would save money, about $170 million a year (after factoring in over $100 million in lost revenue caused by slower delivery times).

After reviewing the plan in detail, the Commission said it was “not able to confirm the cost benefits in future years of implementation,” and the projected cost savings weren’t very significant anyway — just “3.4 percent of total transportation costs for FY 2020 and less than a quarter of one percent of the total FY 2020 operating expenses of $82 billion” (Advisory Opinion, p. 109).

The PRC may review the actual cost savings when it does its annual compliance review in January 2023. The USPS Inspector General may do an audit before then. It’s possible a full accounting may never take place.

The second justification for slowing First Class mail was that lower service standards and the more predictable behavior of ground transportation would make it possible for the Postal Service to make delivery more “reliable.” The metric for reliability was on-time service performance — the percent of mail volume that meets the service standards.

In recent years the Postal Service has achieved about 92 percent on-time for First Class mail, with the exception of single-piece mail traveling long distances, which typically scores around 80 percent. DeJoy’s plan was going to fix all that. The Postal Service said it would achieve or surpass on-time scores of 95 percent in all categories of First Class. Mail delivery would be more “reliable.”

In his testimony and cross-examination of USPS witnesses, Mr. Carlson examined how the speed of delivery was impacted by various factors (the “root causes” for delays), not just the mode of transportation. He argued that shifting to trucks would not improve performance to the extent the Postal Service claimed. The Commission did its own analysis and came to the same conclusion: The Postal Service “should consider a 95 percent on-time target as aspirational, due to the highly dynamic factors involved in the postal mail network” (Advisory Opinion, p. 5).

For the rest of this year, the 95 percent target will not even be “aspirational.” In its FY 2021 Annual Report to Congress, the Postal Service states that its target for First Class composite is 91 percent. It now says that it will meet or exceed 95 percent “once all elements of the plan are implemented.”

The Postal Service did not mention any such caveats during the Advisory Opinion process. Vice President Robert Cintron testified to the PRC that “we expect to set service performance targets at 95 percent once the new service standards are in place, and we expect to meet or exceed them consistently upon implementation of our proposed service standard changes during all times of the year.”  It’s not clear what elements of the 10-year plan have yet to be implemented before the USPS will be able to reach 95 percent.

(Update: In a footnote to a filing today with the PRC, submitted after this post was published, the Postal Service says it never said that changes in service standards would alone be enough to reach 95 percent. As evidence it points to a Federal Register notice on August 11, 2021, in which it denies ever claiming that it would reach this target “instantaneously with the service standard change.” But this Notice came out three weeks after the Advisory Opinion was completed. The Postal Service also explains what else it will need to do to reach 95 percent: “For example, the Postal Service will aim to meet operating plans, will seek better utilization rates for its surface transportation network, will aggregate and consolidate loads at origin locations, will pair certain dispatches with package volumes, and will more optimally route and transfer via hubs and surface transportation centers.” The Postal Service did not offer this explanation during the Advisory Opinion process.)

Service Performance for Q1 FY2022

The service performance reports published last week provide district-by-district data for each of the categories of First Class mail — single-piece and presort, with delivery standards of 1, 2, 3, 4 and 5 days. Note that before the changes in standards, the categories were 1, 2 and 3-5 days (with 99 percent of 3-5 day mail being 3-day), so the reports have a composite figure to make comparisons with the past possible. Here’s a summary of the scores on the national level. (The single-piece report is here; the presort is here.)

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