Steve Hutkins giving an replace of Louis DeJoy’s plan to make the USPS extra environment friendly and worthwhile.
PRC finds Delivering for America has vital issues, urges USPS to rethink its plan
Steve Hutkins “Save the Put up Workplace“
Yesterday the Postal Regulatory Fee issued its Advisory Opinion on the Postal Service’s Delivering for America plan. The Fee discovered that the DFA has vital issues, particularly in rural areas, and it urges the Postal Service to rethink the DFA.
Beneath are the PRC Press Launch, its listing of suggestions, a FAQ web page issued by the Fee, and a listing of hyperlinks to among the most important paperwork within the N2024-1 docket. There’s extra concerning the docket on our N2024-1 dashboard and DFA dashboard.
Press Launch
Washington, DC – The Postal Regulatory Fee (Fee) issued an in-depth evaluation of the Postal Service’s Delivering for America (DFA) initiatives proposing nationwide adjustments to mail service. Whereas the Fee acknowledges the challenges the Postal Service faces are vital, and alter is important, the Fee finds the Postal Service is irreversibly altering its community with out laying a basis for achievement.
- First, the Postal Service’s plan is dependent upon faulty modeling and doesn’t look like prepared for implementation.
- Second, the Postal Service depends on overly optimistic and unsubstantiated monetary projections for price financial savings that aren’t doubtless to enhance the monetary well being of the Postal Service.
- Third, the Postal Service’s proposal has vital destructive impacts on rural communities all through america.
The Fee urges the Postal Service to rethink whether or not the speculative, meager positive aspects from this proposal outweigh the sure downgrade in service for a good portion of the nation.
Because the begin of the DFA initiatives in 2021, the Postal Service and Fee have acquired service complaints from across the nation. Lots of these service complaints proceed at present. The Fee strongly encourages the Postal Service to think about the considerations and proposals outlined within the Advisory Opinion because it continues to develop and implement the proposed adjustments. Additional, the Fee advises the Postal Service to intently monitor the influence of its adjustments on mail merchandise and rural communities.
The Fee’s findings are summarized under, and within the Advisory Opinion’s govt abstract. The Fee additionally compiled a listing of all its suggestions in an appendix to the report.
Vital Detrimental Impression on Service
The proposal is more likely to have vital destructive impacts on sure mail merchandise and rural communities. The Postal Service’s plan focuses on the potential service enhancements beneath the proposed service requirements and downplays the numerous antagonistic results that its proposal may have on sure mail classes, mail lessons, and rural communities.
- Rural communities will expertise disproportionate downgrading of service requirements when analyzed by ZIP Code pairs (mail despatched from one ZIP Code to a different).
- For Single-Piece First-Class Mail (reminiscent of particular person letters and postcards, the kind of mail most probably for use by a family), 49.5 p.c of ZIP Code pairs will expertise downgraded service.
- Periodicals and Bundle Providers will expertise vital downgrades.
- Appreciable decline in service efficiency has already been demonstrated in areas reminiscent of Richmond, Virginia, and Atlanta, Georgia, the place the proposed community adjustments have already been applied.
- The Postal Service at the moment lacks a system to precisely, reliably, and representatively measure service efficiency on the 5-digit stage.
Price-Financial savings Are Speculative and Possible Overstated
The proposal is unlikely to considerably enhance the monetary well being of the Postal Service for a number of causes.
- Considerations with the Postal Service’s methodology for estimating price financial savings as a result of an absence of historic or empirical basis.
- An unclear timeline for financial savings to be realized, and an absence of readability relating to the general impact on the Postal Service’s monetary well being.
- Whole projected price financial savings, even when totally realized, symbolize roughly 4 p.c of the Postal Service’s FY 2024 working bills of $81.8 billion.
Faulty Modeling and Is Unwell-Ready for Implementation
- The Postal Service used a faulty modeling methodology which didn’t deal with variations within the postal community, for instance the day by day adjustments within the quantity and kind of mail that enters the community.
- The Postal Service worsened the influence of its faulty modeling methodology by failing to combine transportation and processing. This prevented the Postal Service from optimizing the effectivity and efficiency of the complete community.
- Given the shortage of convincing proof, the Fee finds it’s unlikely that the Postal Service will create a extra environment friendly community in comparison with the legacy community.
Postal Service Proposal
The Postal Service’s proposal requires operational adjustments to create a nationwide community of regional processing distribution facilities (RPDCs), and native processing facilities (LPCs) that consolidate and scale back transportation lanes amongst services. It additional plans to implement its regional transportation optimization (RTO) initiative nationally, leading to a delay in processing some outgoing mail quantity. The Postal Service estimates that these two initiatives will enable it to enhance productiveness and effectivity and obtain an annual price financial savings of between $3.6 and $3.7 billion as soon as the initiatives are totally applied. The Postal Service additionally seeks to revise its service requirements to align with these operational initiatives.
Fee Advisory Opinions
When the Postal Service determines there must be a change within the nature of postal companies, which can typically have an effect on service on a nationwide or considerably nationwide foundation, it should submit a request to the Postal Regulatory Fee for an Advisory Opinion.
The Fee’s Advisory Opinion, govt abstract, suggestions, and FAQs can be found right here and at www.prc.gov.
Suggestions
The Fee recommends that the Postal Service higher put together for its introduced adjustments, together with creating RTO-specific plans and fashions, earlier than rolling out the RTO initiative on a nationwide foundation.
The Fee urges the Postal Service to start monitoring metrics, reminiscent of the typical quantity and size of nationwide layovers, earlier than implementing RTO in order that it has a baseline to which it will probably examine the success of the initiative.
The Fee recommends that, at related RTO Put up Workplaces, the Postal Service prolong the time clients should deposit mail by amassing from blue assortment bins, foyer drops, and Self-Service Kiosk parcel receptacles nearer to the morning dispatch time.
The Fee notes that to maximise price financial savings, as an alternative of static thresholds, the Postal Service may leverage its intensive facility-level information to develop and depend on thresholds for particular Regional Processing and Distribution Facilities (RPDCs) and even develop non-threshold strategies for figuring out RTO designations.
Whereas the rollout of RTO requires profitable implementation, the Fee recommends the Postal Service discover methods to categorize RPDC services and apply category-based thresholds to probably improve the advantages of optimization and scale back the scope of downgrades with out complicating implementation.
The Fee recommends that the Postal Service complement its enterprise judgment relating to a 50-mile threshold with extra data-based evaluation to discover totally different strategies for figuring out RTO designations, reminiscent of one primarily based on journey time, and measure the advantages of RTO towards the service impacts.
The Fee recommends that the Postal Service resolve the contradiction of advocating for a regional method whereas nonetheless permitting sure Native Processing Facilities (LPCs) to retain cancellation operations.
The Fee recommends the Postal Service decrease the usage of exceptions in implementing its initiatives by creating and implementing a scientific method to seize the interactions between RTO and the community design.
The Fee agrees with the Nationwide Postal Coverage Council (NPPC) suggestions to tie RTO implementation to the operational launch of the servicing RPDC into operation in a selected area, and never nationwide unexpectedly.
The Fee recommends that the Postal Service be taught from its destructive expertise implementing Dynamic Routing Optimization (DRO) to tell its preparation for implementing RTO.
The Fee encourages the Postal Service to create a radical implementation plan to facilitate the robust execution of its RTO initiative and arrange related timelines.
The Fee recommends a extra measured method to implementation technique primarily based on the Postal Service’s expertise with Native Transportation Optimization (LTO) pilots the place “compressed” timelines created points. This would possibly embrace a testing interval with RTO pilots.
With a view to set up an correct illustration for the potential impacts of RTO, the Fee recommends that the Postal Service provoke an RTO pilot earlier than rolling the initiative out nationwide.
The Fee recommends that the Postal Service deal with considerations relating to outdated and inappropriate supply information and assumptions to enhance the interior validity of the LTO Mannequin going ahead.
The Fee recommends that the Postal Service develop a mannequin that precisely displays the character of transportation beneath RTO because the LTO Mannequin outcomes can’t function an satisfactory proxy. Such a mannequin ought to ideally embrace price and repair influence information from RTO pilots by which RPDC activations and different community adjustments are launched together with RTO.
The Fee recommends the Postal Service conduct additional preparation earlier than starting the RTO initiative to enhance its probability of attaining implementation success, together with finalizing the listing of put up places of work eligible for RTO, creating an in depth mission implementation plan for RTO starting with a RTO pilot, and making a mannequin to estimate RTO transportation price financial savings particularly
