Regulator shuts down USPS’ request to implement DeJoy’s overhaul without additional oversight

The U.S. Postal Service will be subjected to additional scrutiny as it implements key aspects of its vision to transform the agency, with the agency’s regulator rejecting management’s bid to deny certain oversight of its business plan. 

USPS petitioned the Postal Regulatory Commission to withdraw its new pathway for stakeholders to learn more about the proposals from Postmaster General Louis DeJoy, but the oversight body last week rebuffed that request. The changes—as laid out in DeJoy’s 10-year Delivering for America plan—could have dramatic impacts on “every aspect of the postal environment” and therefore, PRC said, it must maintain some level of review. 

DeJoy has frequently voiced his distaste for his regulators—calling them an obstacle to progress—but the tension came to a head last month when PRC announced it was launching an ongoing review of the Postal Service’s plans to consolidate and otherwise reorient its processing and delivery network. The postmaster general sees the reforms as a key part of his 10-year business plan and his goal to eliminate USPS’ debts and deficits and has called on all stakeholders to get on board. USPS quickly petitioned PRC to reverse course. Congress never intended to give the regulators “unfettered oversight” in every management action, the Postal Service said, and instead authorized only “discrete areas” for inspection.

For its part, the commission said it was responding to stakeholders who reported they lack a forum to voice concerns about the network changes. PRC added it would boost transparency to learn more about these strategic plan initiatives that may have a significant impact on the postal community. Large-scale mailing groups have implored the commission not to waver from its request, saying PRC was acting well within its authority and the Postal Service should not “shield itself from scrutiny.”

In the past, PRC said in its recent denial of postal management’s request, the commission has frequently opened dockets on a wide range of matters of importance to the postal community. 

“Initiatives related to the DFA Plan, with its emphasis on dramatic change to every aspect of the postal environment, should be no different,” the commission said. 

It suggested the Postal Service misunderstood PRC’s intentions and it was not seeking to delay any USPS initiative, nor a “comprehensive review” of all of DeJoy’s reforms. The new docket would allow stakeholders to seek additional information on upcoming changes, such as the creation of more regional “sorting and delivery centers” and the larger “mega-centers.” Large-scale mailing groups had asked PRC to rule against USPS, citing the potential impacts on costs, service and productivity. Additionally, they said, the Postal Service has stood up some sorting and delivery centers but cost and service impacts “remain mysteries to stakeholders.” 

USPS has opened six S&DCs and is currently evaluating locations for 100 more. It plans to open four of the mega-centers in 2023. 

PRC noted it has the authority to take any action it deems necessary to carry out its obligations. The regulators criticized USPS for not keeping them in the loop, noting it has at times learned of new facility launches in the media. Management’s public comments have occasionally contradicted each other, they said. Such instances “underscore the importance of the commission acting proactively.” 

At a House hearing last month, DeJoy said PRC had overstepped its authority.

“The Postal Regulatory Commission sat over and watched the destruction of the organization over the last 15 years and [was] actively participating in the destruction of the organization the last 15 years,” DeJoy said, adding he, on the other hand, was trying to save the agency. “What goes on and why they do the things they do, I have never figured out. And I'm a pretty smart guy.”

Michale Kubayanda, the PRC chairman, meanwhile, has countered that claim by suggesting the commission requires more staff and resources to keep pace with the changes underway at USPS. Despite DeJoy’s objections, PRC said in its ruling that it may go further in its oversight of the postmaster general’s reforms. 

“These changes may already be impacting the postal community,” the commission wrote. “Further, it is unclear how these changes would impact costs or services, or if they implicate the Postal Service’s compliance with certain statutory provisions such as those relating to service performance or the requirement to seek an advisory opinion.”