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Regulator Says Slower USPS Mail Would Not Make “Big Improvement” in Its Finances




The Postal Services regulator warns the USPS that its intention to slow down nearly 40% of first-class mail delivery would not significantly improve, if anything, its current financial situation, and would not immediately allow the agency meet their delivery targets on time.

The Postal Regulation Commission, in its advisory opinion published on Tuesday, said the higher costs the USPS expects to handle an increase in the number of plans would actually eliminate any expected cost savings that would flow from the new service standard.

Therefore, it is not clear that the trade-off between financial sustainability and maintaining high-quality service standards is reasonable, the commission wrote.

PRC President Michael Kubayanda said he understood the logic of the USPS leadership to adapt to changes, such as a persistent drop in mail volume and a recent increase in packages, but warned that the agency’s plan “does not meet the needs of the moment and is not supported by the testimony the postal service has presented.

“The postal service is capable of top notch planning and execution; he has to do it to provide his basic service six days a week. This expertise makes this underdeveloped proposal disappointing, ”Kubayanda wrote in a separate opinion from the advisory opinion of the commission.

As part of its 10-year reform plan, the USPS offered to save money by moving more mail through its ground transportation network and less through contracted air delivery services. As part of this plan, however, USPS would need to slow down its first-class mail standard in some cases.

Under this plan, USPS would deliver 21% of its current mail volume in four days and 10% in five days.

But even if USPS goes ahead with plans to slow mail delivery, PRC Commissioner Ashley Poling said the USPS plan would not result in cost savings, processing efficiency. or performance improvement.

“While deficiencies in any of these areas pose a significant problem and undermine public confidence, issues in all of these areas point to the need for the Postal Service to press pause and return to the drawing board. “Poling wrote.

While the USPS expects this new service standard to enable it to deliver 95% of mail on time, the commission warns that this “ambitious” goal is not reliably achievable for all short-lived products. over time, and that the agency is unlikely to see efficiency in its transport network without first addressing underperforming districts and areas, as well as national staffing issues.

The Council agrees that it is possible to increase the efficiency of land transport and the use of capacity. For this initiative to be successful, the postal service will need to reconfigure its surface transportation network to build efficient routes with multiple stops and hubs, ”the commission wrote.

Despite the committee’s concerns, its advisory opinion is not binding, and the USPS is free to implement slower service standards.

“The advisory opinion is the only check on the ability of postal services to unilaterally implement major changes in their services,” Kubayanda wrote. “I will work with my colleagues in the Commission to do whatever is necessary within its authority to ensure that control alone is meaningful and influential.”

The committee’s opinion does not fully reject the merits of the service change, noting that the proposal targets mail that still fails to meet service performance targets and has the most room for improvement.

USPS told the commission that any reduction in mail volume resulting from the change would be modest, but the commissioners said the claim “is based on many unproven assumptions” because USPS did not perform any operational testing or pilot its proposed changes to service standards before proposing them.

The Commission considers this lack of testing to be problematic as mail processing is complex and requires rapid execution to provide reliable service performance, the advisory opinion says.

Specifically, the commission took issue with the market research used by USPS to argue that customer satisfaction would not decline as a result of the new service standards. USPS previously told the committee that customers would appreciate reliable mail delivery over overall speed.

In the application, the supporting market research ignores the difficult task of weighing the loss of service speed due to the proposed changes and the alleged increase in reliability and consistency of service. More importantly, however, these reports and their underlying data do not correspond to the populations likely to be affected by the proposal and therefore cannot be used to infer the impacts of the proposal on said clients, the commission wrote.

The committee recommends that the USPS implement these new service standards so that cost savings are not prioritized over maintaining high-quality service standards, ”and that it closely monitors any impact on its business. transport network and customer satisfaction.

USPS spokeswoman Kim Frum said the agency “is reviewing the recommendations of the Postal Regulatory Commission and will consider them as our plan moves forward.”




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