Looking to Cut Costs, New USPS Leader Takes Aim at Overtime and Late Trips
Postal Service acknowledges some mail delays are likely, but says ultimately the system will be more efficient.
The U.S. Postal Service is cracking down on late trips in an effort to reduce labor and transportation costs, with the agency’s new top executive looking for ways to redesign its business model.
The cash-strapped USPS, whose poor finances have taken a further hit during the novel coronavirus pandemic, has instructed workers to leave each phase of their deliveries according to a set schedule, meaning some mail will likely be delayed. Louis DeJoy, who became postmaster general last month, directed the changes, which the Postal Service suggested could save $200 million.
“This operational pivot is long overdue and today, we are talking about the first step in a journey we must take together, for the health and stability of the Postal Service,” management wrote in a prepared “stand-up talk” delivered to employees around the country in recent days. “The shifts are simple, but they will be challenging, as we seek to change our culture and move away from past practices previously used.”
In the first phase of changes, network, plant and delivery trips must take place on time. Late trips, which can lead to overtime, are no longer authorized, according to two memoranda, first reported by PostalNews.com. Another document explaining the policy said overtime would be eliminated soon, with “more to come” to explain the shift in the near future. Any mail that cannot be delivered without overtime will be held for the next day.
“The USPS will no longer use excessive cost to get the basic job done,” the document read. “If the plants run late they will keep the mail for the next day."
Letter carriers were instructed to begin, start their routes and return on time. The stand-up talk memo suggested it would “be difficult for employees” to see mail left behind on the workroom floor, but they should ensure the pieces are properly logged and distributed the next day. USPS vowed to address “the root causes” that have led to mail going out too late in the day, suggesting the directives would force new efficiencies in the system.
“As we adjust to the ongoing pivot, which will have a number of phases, we know that operations will begin to run more efficiently and that delayed mail volumes will soon shrink significantly,” USPS wrote. It added the changes would “ensure we can secure our future as a world-class service provider.”
Employees reacted harshly to the news, confirming they received the stand-up talks as outlined in the memos.
“No more waiting for mail,” Amy Horner, a rural letter carrier, wrote on the PostalNews Facebook page. “Too much standing around waiting. The ‘every piece, everyday’ slogan doesn't apply anymore. Get in, get out.”
Several employees commented they have been told by supervisors they would no longer receive overtime, while expressing dismay that mail would be left behind each day. Some speculated the policy would lead to a growing backlog of mail pieces and packages building up at plants and post offices. Others said they were not surprised by the changes and called them overdue.
Dave Partenheimer, a spokesman for the Postal Service, said the plans were part of an effort to reform the agency’s operations.
“The Postal Service is developing a business plan to ensure that we will be financially stable and able to continue to provide reliable, affordable, safe and secure delivery of mail, packages and other communications to all Americans as a vital part of the nation's critical infrastructure,” Partenheimer said. He added the overall plan is not yet finalized, but it will “certainly include new and creative ways for us to fulfill our mission, and we will focus immediately on efficiency and items that we can control, including adherence to the effective operating plans that we have developed.”
DeJoy, the new postmaster general, “is looking at cost” and “making USPS financially solvent, which we are not,” according to the memo described as his “expectations and plans.” The Postal Service previously requested $75 billion in financial assistance from Congress, citing the fallout of the pandemic. While postal management said earlier this year it would likely run out of cash by the end of September, the agency said in a financial document in May that by accessing a $10 billion loan from the U.S. Treasury and prioritizing some payments over others "it expects that it will have sufficient liquidity to continue operating through at least May 2021."
Mail volume and revenue during the pandemic have dropped precipitously in the Postal Service’s regular mail delivery—its most profitable offering—but those declines have been offset somewhat by huge upticks in package business. Still, USPS' expenses are growing faster than its revenue and it lost $651 million in May, not accounting for inflationary changes to workers’ compensation costs.
The USPS board of governors in May named DeJoy as USPS' next postmaster general, selecting an outsider with no direct postal experience for the first time in nearly 20 years. His selection was met with some reservations, as certain stakeholders and lawmakers criticized his ties and donations to President Trump and the Republican Party, as well as his lack of institutional knowledge for the agency. Others, however, praised his private sector experience in logistics and expressed optimism he would provide a fresh, outside perspective to address the agency's long standing problems.
On his first day in office, DeJoy previewed some of the new changes in a video message to employees in which he said USPS has an “expensive and inflexible business model.”
“I did not accept this position in spite of these challenges, I accepted this position because of them—and because I want to work with you in addressing them,” DeJoy said. “I want to put this institution on a trajectory for success.”
Mark Dimondstein, president of the American Postal Workers Union, said the changes were moving in agency in “the wrong direction.” Federal statute governing the Postal Service requires prompt, reliable and efficient service, he said, and the new directives would slow down delivery. He said overtime exists due to staffing shortages and seasonal fluctuations, but his members would not object to overtime reductions so long as the mission was still being fulfilled. He questioned, however, whether the changes would actually lead to more efficiency.
“That whole concept is an insult to postal workers who are a hardworking, dedicated group,” Dimondstein.
The National Association of Letter Carriers, meanwhile, said it has not yet received any formal notification about a change in operations, but stands prepared to "use existing processes to address any service or compliance issues." A USPS official noted there has not yet been an official memo from the postmaster general on the changes.
Mike Plunkett, a former USPS executive and current president of PostCom, an association representing large-scale private sector mailers such as UPS, FedEx and Amazon, said he was surprised by the opposition to the memos.
“The Postal Service’s productivity has been declining for a number of years, so there is an overdue need for the Postal Service to take steps to control its costs. From that perspective, this is necessary,” he said. “To conclude that this is somehow downplaying the importance of service or means the Postal Service is going to sacrifice service, I don’t think is correct.”