USPS Wants To Eliminate First Class Mail

https://www.whec.com/national/nbc-u...ail/6011277/



*** Moved by Staff to a more appropriate forum. ***

The title of the thread is misleading. This is the proposed change:

Local letters, bills and the like that now are designated for delivery within a two-day span would instead be lumped in with mail set for delivery within a three- to five-day window.

Won't change a thing - it is been like this for quite a while now


Peter

For whatever reason(s), some folks and most certainly the media, seem to forget even recent history. The USPS downsizing has been underway for several decades tracking with the sharp decline in First-Class mail. This downsizing has spanned several administrations and Postmaster Generals. Current First-Class mail volume is totaling to levels last seen in 1955.

U.S. Postal Service's "First-Class Mail Volume Since 1926," April 2019 report said that


Along with restructuring, removing mailboxes, closing distribution centers, cutting back post office hours, the downsizing included changing First-Class delivery expectations from one day to two days in 2011. Now they are suggesting merging it with the rest of the mail stream increasing it to 3-5 days. It should be noted that delays in delivery times of all mail services has been increasing over the last 15 years.

In 1974 a new postal guideline directed the USPS to remove pubic mailboxes that were averaging fewer than 25 pieces of mail a day to save on fuel and labor. Since then, an average of 3,258 mailboxes per year have been removed.

By 2007, the USPS had lost $69 billion and projections were grim; they were carrying $110 billion in unfunded liabilities for retiree pension and health care, and its workforce is accruing more retirement benefits every year. The Government Accountability Office (GAO) has put the USPS on its "high-risk" list. Without restructuring the USPS was headed for financial disaster. Downsizing was in order and that was exactly what they did.

In December 2011, the USPS announced it would close more than half of its mail processing centers, eliminate 28,000 jobs and reduce overnight delivery of First-Class Mail. This move closed 250 of the existing 461 processing centers. USPS also was seeking to close down smaller and highly unprofitable post offices many of which were rural POs (the USPS found that the bottom 4,500 locations averaged just 4.4 customer visits a day). But a few months later and after the Postal Union applied pressure to Congress, the USPS modified the plan to instead reduce retail hours (some as little as two hours per day).

By 2014, the USPS further announced that they were shuttering additional mail processing facilities. This time they consolidated 82 facilities starting in January 2014 and completing the downsizing by the 2015 holiday season; USPS estimated the saving to $865 million for this downsizing step.

Accompanying the downsizing over the decades has been a decline in productivity. According to the U.S. Postal Service Processing Network Optimization (Report Number NO-AR-19-006) the PO is less been less efficient at processing mail each year since fiscal year (FY) 2014 as mail processing workhours have not decreased at a rate consistent with decreased mail volume.
- First-Class letter processing productivity decreased by 6 percent – letter mail volume declined by about 12 percent, while processing workhours only decreased by about 6 percent and overtime workhours increased by 42 percent.
- Flats processing productivity decreased by about 18 percent – flat mail volume declined by about 22 percent, while workhours only decreased by about 5 percent and overtime workhours increased by 46 percent.
- Manual processing, or pieces processed manually, productivity decreased by 21 percent – mail processed manually declined by about 24 percent while workhours only decreased by about 3 percent and overtime workhours increased by 49 percent

In my opinion some of the decline in productivity is due to the transition to larger parcel handling vs. previously more efficient handling of letter mail. But it should also be noted the USPS pays its employees more than other US delivery services. A U.S. Treasury analysis for 2017 found that employee costs at the USPS was averaging $85,800 and was higher than the averages of $76,200 at UPS and $53,900 at Fed Ex.

And lastly Congress has artificially been holding down First-Class mail rates throughout the downsizing, knowing that the USPS was losing money. They are fully aware that US postal patrons pay far less than other countries AND that the cost of a First-Class letter was lower than the USPS cost to handle it. Here is a comparison of

As is shown, USPS losses 3 cents on every First-Class letter sent. The average cost for a first-class letter for most of the world is double than that of the current US rate.

So the take-away for me is;
- the downsizing is not a current issue
- the delays in First-Class mail have been growing for years
- the downsizing over the last few decades put the USPS infrastructure on very thin ice, the additional weight of COVID broke that ice and the USPS floundered in the ice cold water
- First-Class mail rates need to be doubled
- as long as the USPS has an anchor around its neck (named 'Congress') and is burdened with accounting for future employee benefits the odds that it will be profitable is zero.
Don

Nice piece Don

Yes Don, thank you for putting all of that work and research into a complex topic.

Interesting story.

I find it amazing to look at the cost of mailing letters and parcels in various countries around the world.

Here in the magic land of Oz (Australia) the cost of a basic domestic letter is A$1.10.

International depends on where you are sending it with another price increase coming on 1 March.

A 50 gram letter to the USA will then cost A$3.40 using International Stamps. Using domestic stamps will cost you another 10% for GST (Goods and Services Tax). Don't bother asking why one would pay another 10% in GST to mail a GST exempt letter to an international location using stamps that have already had the GST paid on them...........

And we can not use stamps for International Registered letters either. We have to use the Australia Post provided prepaid envelopes.

As a result of the 'virus' problem here we only have letter delivery every other day to residential areas. Domestic parcel delivery has improved a lot over the past month or so.

At one time during the lock down Australia Post was sending parcels to Sydney (900 kilometers one way)to be processed even if they were only going to the next suburb here in Melbourne. One parcel mailed to me from 15 kilometers away during the lock down went all the way to Sydney and then back and took 6 weeks to get to me. (During the lock down we had a 5 kilometer travel limit so there was no way to just drive over there and pick up the item.)

International mail is really hit and miss. It looks like the last bunch of international letters I sent took anywhere from 4 to 7 weeks to get to their destinations. Coming the other way, it looks like about 3 to 5 weeks from the USA. (Last letter international letter took 3 weeks from the USA with 8 days of that from Sydney to Melbourne.)

And international parcel costs from Australia? Basically ridiculous.

If the USPS is only losing 3c on every First-Class letter sent, why should the rate be doubled? Double the rate and the volume will fall even faster than it has been.

The rates would need to be doubled to cover the costs of running USPS, including the future benefits. The goal should be to at least make the USPS break even. Of course there are other ways to do this including limiting some of the 'last mile' service requirements. Why send a mail truck (and person) to every single physical address; the need for this service is dropping along with the First-Class mail usage. Instead of increasing the delivery time of first-class mail by throwing it into the third-class mail stream they could move to only requiring 'last mile' visits every other day. This would have less impact on timely delivery and has huge cost and CO2 savings.

Consider just one of the issues at play with the 'last mile'. If you remove the 'incoming' volume and only consider the 'outgoing' (mail being put in mailboxes and the flag being raised for pickup) first class mail then we have dropped below an average of one piece of mail per day per address (using the current 7% letter volume of first-class mail). So why are we sending a mail truck and a person to every address in the country every day? How long will it be before people figure out that they cannot be supporting this kind of 'global warming' activities and huge carbon footprint? Subsidizing a mail service so that the employee's future benefits are covered is one thing, supporting a little used last mile first-class mail service that is driving over 2 billion miles per year is another. And using EVs is not much better since plugging in an EV requires coal fueled power plants. Is encouraging global warming services like the USPS last mile service something that a politician wants get behind right now? . (Insert your own opinion on the odds of bipartisan support here.)

Or they could drop the future employee benefits accounting requirements. (Insert your own opinion on the odds of bipartisan support here.)

With these kinds of political footballs at play, my opinion is that raising the cost of first-class mail close to the international average is the most feasible. But if someone can make the argument that the other red bleeding ink parts of an organization that is currently more than $160 billion in debt can be changed in the existing Washington environment, I am all ears.
Don

Another important factor is that the American Postal Workers Union (APWU/AFLCIO) which represents 550,000 members reliably votes for one particular party. Even though that Party presents itself as "climate friendly" it will not make any changes that could negatively impact that very large voting block.

A perhaps interesting data point in the on going delivery struggles of the USPS and other services around the world. On November 30 of last year I placed two nearly identical envelopes in the mail to western Australia from here in central New Jersey. One took 38 days to arrive and the other a whopping 71 days.

International and Domestic mail are two different animals. I could readily see issues with International mail because the USPS does not control it's own destiny. Domestic mail is an entirely different story. It is solely on the USPS. I am still having problems with mail coming from PA to MA. First Class letters are still taking up to three weeks.

As Rogdcam notes, the domestic situation is concerning.

Just this morning (a Sunday, w/no mail service in the US) I opened a three-figure bill which arrived in yesterday's mail. Delayed about 2 weeks I judge. This bill is due on Tuesday 16th. With Monday a postal holiday, this is a problem. To avoid substantial penalties, I need to quickly resort to the Web to pay online via ACH or credit card, the latter of which would incur a fee. No telephone option for this utility.

I had two similarly delayed bills arrive last month from two different credit card companies. One of which was a real hassle to get done by ACH at the last minute due to glitches with their online account system that required tech support. The other I had luckily noticed it had not arrived and had taken care of it in timely fashion. That bill actually arrived a week after payment was due. The penalty and interest there would have been over $100.

There are any number of elderly people who could not pivot so quickly and would be socked with financial penalties.
Ditto with folks who lack convenient internet access due to poverty or rural locations. The digital divide is now spawning a financial services divide if the mails are no longer timely.

As a country, we really need to fix this.
Some components of the solution have been mentioned in various posts, many of which would seem to be necessary, but which are not in themselves entirely sufficient. We need to get moving on this problem.

Short of getting Don onto the postal board of governors (I really liked that analysis), is squawking to elected representatives going to help? Feeling powerless today.

I fundamentally disagree with the concept that the postal service, or any other government program, should be required to make a profit or even "break even". They provide a public good, and the service (although declining in usage overall) is essential. My understanding is that the USPS would be doing absolutely fine if it weren't for the prepayment of benefits imposed by Congress.

What would be an acceptable amount to lose?

Of course the issue here is, 'who defines public good' and 'essential' since these definitions place a burden on all tax payers. Acknowledging that that would be some tax paying folks who do not agree with an opinion that the USPS is 'public good' and 'essential' means their opinions carry as much weight as folks do think the opposite. Politicians always want control of these kinds of things, it is how they get personally get rich and powerful.

This is where 'for profit' comes in; those who want to support an organization or company certainly can and those who do not agree with that support have the freedom to make their own choices. The rub comes in when people lose their freedom of choice and things get mandated by those who think they know what is best for everyone else.
Don