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What if Google Ran the Post Office?
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From the Roanoke Times, an independent look at the issues facing USPS.

 

North Carolina wins again.

First, Roanoke lost out to Raleigh when Advance Auto announced last month it was moving some jobs to North Carolina as part of its takeover of General Parts Incorporated and a subsequent reorganization.

Then, the U.S. Postal Service announced last week it will close its mail processing plant in Roanoke and move the operation – and some of its 400 jobs – to Greensboro.

The move is part of a nationwide restructuring that will see 82 mail processing centers around the country close. Norfolk is also losing its center; merged into one in Richmond. North Carolina winds up with three centers – in Greensboro, Raleigh and Charlotte. The postal service estimates the consolidations will save $750 million a year.

Some have blamed the moves on a 2006 law that requires the postal service to pre-pay retirement health benefits for employees 75 years into the future – in other words, the postal service has to set aside money for benefits for employees it hasn’t even hired yet. Without that requirement, the postal service would be making money, not losing money. The postal unions, in particular, see this Bush administration requirement as nothing more than an attempt to create a financial crisis, and break a public sector union.

Independent observers take a longer, and somewhat different, view, especially in light of rising health care costs. “The prefunding requirement was the wrong solution at the wrong time to a very real problem (not limited to the Postal Service), and is draining the postal service just when it most needs to invest in new plant and equipment,” says Kent Smith, a former postal service executive who is now research director for Postal Vision 2020, a private group looking at ways to reform the postal system. “There are better ways to fund this liability, which is not going away.”

However, that’s not the real problem, they say. Take away the prefunding requirement, “and that might buy you a little time, but it doesn’t change the basic dynamics,” says Jeff Jarvis, who has studied the postal service as part of his work as director of the interactive journalism program at the City University of New York. Those basic dynamics, he explains, are that world is changing, and the volume of first class mail is falling. “If it can be digital, it will be digital,” he says. “If it can be consolidated, it will be consolidated.”

The odds are, Smith says, there might be even more consolidations in the future. The postal service faces the same financial pressures as everyone else, except with an obligation that the private sector wouldn’t tolerate – delivering the mail six days a week to everyone’s home, no matter where they live. The postal service is supposed to be self-supporting. However, Jarvis can see a day where that will change, too. “If you want to deliver to Sarah Palin’s grandmother in One Tree, Alaska, there’s a scenario in which universal service is a government subsidy.” That might also mean higher postal rates; something big mailers naturally object to (small mailers, too).

What would the private sector do if it ran things, other than do away with that universal service? You don’t have to wonder; just look at Fed Ex and the United Parcel Service. They have only a half dozen hubs apiece for the whole country, so most of your packages get shipped in and out of Memphis or Louisville. And they’re handled by lots of part-time, lower-wage workers, Smith says. Put another way, those full-time Roanoke postal jobs may be going to Greensboro, but someday may they go away altogether. In that light, the post office is going through the same, painful changes that other industries have already gone through.

Jarvis once wrote a book called “What Would Google Do?” How would Silicon Valley run the postal service if given a chance? “Google,” Jarvis says, “would just give everyone a computer and a printer.”


 
The Fate of Rural Post Offices
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From KHAS-TV in Nebraska, a report on Post Office closings and the effects they are having on customers....

 

What's the future of rural postal services? Locations across the country have closed their doors or cut their hours due to financial struggles for the United States Postal Service.


What's causing the change? With new technology like social media and text messaging, the need for the postal service isn't what it used to be. But in many small towns here in Nebraska, people still depend on it.

Three years ago, the US Postal Service announced a plan to close nearly 3,700 Post Offices across the country to cut costs. But, after receiving backlash from small towns, they amended their decision. Instead, they decided to cut hours.

Over the past few months, 9 area post offices have had community meetings to determine the fate of their locations. One of those was a meeting held in June for the Giltner Post Office. Residents say they depend on their local service.


"A lot of us are here and we don't like to drive for 30 miles or 40 miles to someplace else to mail our mail," said Giltner resident Karen Alder.

Giltner had to decide whether to shut their doors or cut hours. They decided to cut down to a four-hour day. They were open from 7:30 to 4:25, but soon they will be open from noon to 4. Residents say they are relieved that their Post Office will stay put.

"I think we're all glad it's not closing. It's a good thing to keep it open because we need it. I think it's a real good thing to have the post office even for the 4 hours that it's gonna be open," said Joan Eastman.

The changes for the Giltner Post Office go into effect on July 26th. Nationwide, more than 9,000 offices have adjusted their hours based on customer use. 4,900 locations have also switched to four hour days.


 
NALC Blasts Donahoe's Endorsement of Highway Deal
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From the Postal Employee Network...

 

NALC blasts PMG for endorsing highway budget scam, misleading Congress

June 14, 2014—Earlier this week, Postmaster General Patrick Donahoe recklessly endorsed the House of Representative’ leadership’s outrageous ploy to use massive job and service cuts in the Postal Service to “pay for” a short-term extension of the Highway Trust Fund, which will run out of money in August if Congress fails to raise the gas tax that normally funds it or to come up with an alternative source of revenue.3-NALC News Small

The proposal, the brainchild of the outgoing House Majority Leader Eric Cantor (R-VA), would use the alleged savings of eliminating Saturday mail delivery to offset the cost of a temporary injection of taxpayer funds into the trust fund to keep highway maintenance and construction projects going for a few more months.

The plan, which appears to have failed to gain enough support to advance in the House, was widely panned in Washington as a transparent gimmick that relied on averting a hypothetical taxpayer bailout of the Postal Service in the future.  It was also a massive failure of leadership. Our nation deserves a serious long-term solution to our highway infrastructure crisis, but the House of Representatives refuses to govern.

The criticism did not stop the PMG from lending his support to the scheme.

NALC President Fredric Rolando denounced the PMG’s move and issued the following statement:

“Mr. Donahoe’s action may be the most irresponsible thing any Postmaster General has done since the creation of the Postal Service in 1970. If allowed to succeed, this budget gimmick would have set a terrible precedent for the Postal Service. Why raise taxes or reduce spending at taxpayer-funded agencies, when you can pay for pet projects with legislated service cuts at the Postal Service? Need a new aircraft carrier? Slash post office hours. Want a new fleet of planes to fight forest fires? Raise postage rates. The PMG recklessly risked undoing all the hard work we did in the late 1980s to get the Postal Service off-budget, to shield the Postal Service and ratepayers from scheming politicians like Rep. Cantor. The PMG owes every postal employee and every postage rate-payer an apology.”

The Postal Service did not just offer rhetorical support for the House GOP plan. It spent the week distributing grossly misleading “fact sheets” to Congress about the effects of eliminating Saturday delivery.

The NALC and our allies in the other unions and in both parties in Congress fought back with fact sheets and communications of our own.

There was never any support in the Senate for the Cantor highway trust fund proposal, and according to a story by Congressional Quarterly, opposition in the House now seems to have killed the idea altogether.

But President Rolando warned NALC members to remain vigilant:

“We may have defeated this gimmick, but we must also ensure that the six-day mandate is renewed in next year’s House appropriations bill. The next few weeks will be decisive on this front as well; we will need every member to fight to save the Postal Service from politicians who want to dismantle it. It’s a shame that the postmaster general has made common cause with the dismantlers instead of working with us and other stakeholders to advance consensus reforms that will strengthen the Postal Service, not weaken it.”


 
An Economic Case For Keeping 6-Day Delivery at USPS
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From Businessweek, an interview with Jim Sauber, chief of staff of the NALC on why 6-Day delivery should be preserved despite a global trend in reduced mail volume...

 

The Obama Administration and House Republicans don’t agree about much, but both say the U.S. Postal Service, which reported a $5 billion loss last year—largely because it is expected to prefund its future retiree health-care benefits—should do away with Saturday letter delivery to save money. That probably makes sense at a time when postal operations around the world are rolling back service as mail volume dwindles. Jim Sauber, chief of staff of the National Association of Letter Carriers, doesn’t agree. He argues that it would be disastrous for the USPS to do this. Bloomberg Businessweek recently spoke to him about the economic case for preserving Saturday delivery. (This interview has been edited and condensed.)

Devin Leonard: The White House wants to end Saturday letter delivery. So do the House Republicans and the USPS. How can they all be wrong?

Jim Sauber: We think they’re making a mistake. This network is an asset that makes the Postal Service unique. Nobody else delivers regularly on Saturday. If you talk to the newspaper, the weekly newspapers, or if you talk to direct mailers, you talk to CVS Caremark (CVS), they all want Saturday delivery.

But the Postal Service still wants to deliver packages on Saturday. Are letters still that important in the age of e-mail?

Sure they are. Letter mail revenue accounts for the vast majority of the Postal Service’s revenue. And direct mail is growing. People who use direct mail especially like Saturday delivery, because it’s the time when people do their shopping.

Wouldn’t the Postal Service save money by no longer going to every address on Saturday? That’s expensive.

Yeah, but you have these economies of scale. One of the reasons package delivery through the Postal Service is so inexpensive is they use a shared network. The marginal cost of delivering that extra package is minimal because you’re already going to the house with all sorts of other mail. That gives the Postal Service an advantage in the package business.

You’ve said you don’t think the USPS is correct in saying that ceasing letter delivery on Saturdays would save $2 billion a year. Do you think they’re willfully misleading the public?

I’m not going to question their motives. Maybe they really do believe it. We do know that historically, getting rid of Saturday delivery is something they’ve wanted to do for 50 years.

They’ve been talking about it since the 1960s.

Exactly. It’s like a longtime dream, to get rid of Saturday delivery. It makes managing the Postal Service harder. I guess they just want to make it easier for their managers. I don’t know.

I’ve got to push back a little on that. If they’ve lost more than 25 percent of their volume in five or six years, don’t they have to shrink the network?

And they have. Since 2007, they’ve eliminated 200,000 jobs. That doesn’t mean you have to end Saturday delivery. The rate of decline in volume has stabilized considerably. It’s like this weird conventional wisdom on Capitol Hill that the Postal Service must be right-sized, as if we hadn’t done anything in the past six or seven years. They’ve eliminated a lot of jobs and cut labor costs considerably through the collective bargaining process. So it’s not like we’re sitting around doing nothing.

Some people are going to read this and say, “This is just the National Association of Letter Carriers trying to protect its members’ jobs.” Why is that wrong?

It’s not wrong. We are trying to protect members’ jobs. We don’t apologize for that. That’s our role. Our members count on us for that.

 
Whistleblower Helps Expose Private Contractor Problem at USPS
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From the Postal Employee Network, a report on an Iowa whistleblower who helped expose an $18.4 million mishandling of private contract payments in 2012. Privatization....not always the answer.

 

WASHINGTON – A new report requested by Sen. Chuck Grassley on a tip from an Iowa whistleblower confirms the U.S. Postal Service mishandled $18.4 million in contract payments to maintain and change the locks on Postal Service-owned mailboxes in the Western Area including Iowa.

“The whistleblower came forward with his concerns, I asked for an investigation, and the investigation found the whistleblower was right,” Grassley said.  “This is a good example of why whistleblowers who identify waste, fraud and abuse deserve a Rose Garden ceremony on behalf of the grateful public.  It’s also a good example of why every agency that serves the public needs an independent watchdog to review issues of concern.”Sen. Chuck Grassley

Grassley received information from an Iowa whistleblower and made a request to the Postal Service Office of Inspector General in October 2012.  The whistleblower alleged that the Postal Service’s contract with Diebold, Inc., to repair and change locks in the Postal Service’s Western Area disregarded many Postal Service rules and procedures.

The inspector general found the Postal Service did not award the contract in accordance with Postal Service policies and procedures and did not develop a purchase plan or conduct a price analysis before awarding the contract.

As a result, contracting officials did not assess price reasonableness or obtain higher level review and approval as required, and the Postal Service did not conduct an analysis to establish the contract payments of $18,399,448 provided the best value, although this does not necessarily indicate the Postal Service incurred losses.

Based on inspector general’s calculations, the Postal Service overestimated the annual cost savings by $6,839,456 per year and awarded the contract based on this inflated cost savings assumption.

The report is available here.

 
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