U.S. Postal Service Reports Third Quarter Fiscal 2020 Results

  • COVID-19 impacts result in declining mail volumes and increased Shipping and Package volumes
  • Uncertainty persists concerning the medium to long-term impact to the business, and the agreement on additional borrowing merely postpones the liquidity crisis
  • Postal Service employees continue to serve the nation during the pandemic
  • USPS tops The Harris Poll Essential 100 in COVID-19 response

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Lawmakers Warn ‘Onerous’ New USPS Loan Terms Imposed by Mnuchin ‘Could Accelerate Demise of Postal Service’

Leading congressional Democrats are warning that an emergency loan agreement announced Wednesday by Treasury Secretary Steve Mnuchin and new Postmaster General Louis DeJoy—a major donor to President Donald Trump and the GOP—could “accelerate the demise of the Postal Service” by giving the administration unprecedented access to the popular agency’s internal operations. Continue reading

About those slides…

The USPS savings “plan” outlined in the document that’s circulating everywhere recently looks awfully familiar- some thoughts:

The reduction or elimination of overtime was a perennial “strategy” proposed by operations managers when I was a budget analyst for the USPS. The problem is that reducing the OT percentage doesn’t actually save any money in and of itself. While it’s true that an employee working overtime gets paid 50% more, the cost for the USPS is about the same as it is for an hour of straight time work. That’s because straight time pay includes the total cost of employee fringe benefits- and you don’t get any additional benefits for working OT.

For a Full Time City Carrier, the year to date average hourly salary works out to $27.80. But when you include the fringe benefits that go along with the employee’s straight time pay, the total cost to the USPS adds up to $45.81 per straight time hour. Pay for an hour of overtime comes to $43.45. So as counter-intuitive as it may seem, overtime actually costs the USPS less per hour than straight time.

The other problem with eliminating overtime is that you have to come up with a strategy for handling the mail you’re currently working on overtime. Better productivity maybe? Sure- but how? (And “just work faster” is not a strategy) Cheaper hours, i.e. non-career workers with lower pay and fewer benefits might help, but there are limitations on that in the union contracts. So there’s nothing magic about overtime- if you aren’t saving total work hours, you aren’t saving any money. And that requires a concrete strategy, not just saying “No more OT!”

Eliminating detail assignments is another classic “strategy” that gets trotted out in times of crisis. It doesn’t usually save much, if any, actual money. Say a postmaster gets detailed to a special project- (planning those four park points per route maybe?). A line supervisor becomes acting postmaster. A letter carrier becomes an acting supervisor (204-B). Another letter carrier covers the bid of the 204-B. A city carrier associate covers the second carrier’s route.

So what happens when the detail is suddenly terminated? The CCA at the bottom of the heap may lose some hours, but everyone else, as career employees, keeps collecting their salaries. The only “savings” are the cheapest hours you have- the CCA’s!

The new wrinkle in this document is the novel strategy of dealing with delayed mail by delaying it further. It will be interesting to see how that works out! And the missing piece is the strategy for surviving the new delivery marketplace where our old, lucrative product, first class mail, is rapidly being replaced by packages- harder to process and deliver, less profitable, and far more subject to the economy’s mood swings.

Obviously, there must be more to the PMG’s new business plan than the infamous slides- but what we’ve seen so far doesn’t bode well for the future of the USPS.

Postmaster General Warns House Committee of Dire Consequences Without Congressional Action- Trump’s Own Hand Picked Board of Governors Says USPS Needs $75B

Today, Postmaster General Megan J. Brennan provided a video briefing to Members of the Committee on Oversight and Reform and Reform on the devastating impact the coronavirus crisis has had on the finances of the Postal Service and the steps Congress and the President must take to ensure continued delivery of essential information, packages, and services.

“The Postal Service is fighting for its survival, putting in jeopardy the careers and paychecks of its 650,000 employees—as well as the more than $1.7 trillion mailing industry that employs more than 7.5 million people,” Government Operations Subcommittee Chairman Gerald E. Connolly said. “We cannot allow the Postal Service to collapse. To do so would deepen our nation’s economic crisis and eliminate an important lifeline for individuals who rely on the Postal Service’s 1 billion deliveries of lifesaving prescription deliveries and eviscerate the very infrastructure we need to administer the upcoming elections.”

“I want to commend the brave men and women of the Postal Service for all they are doing in the midst of this pandemic,” Chairwoman Carolyn B. Maloney said. “The Postal Service is holding on for dear life, and unless Congress and the White House provide meaningful relief in the next stimulus bill, the Postal Service could cease to exist.”

“Reminiscent of their courageous service in response to 2001 anthrax attacks, the dedicated employees of the U.S. Postal Service are serving a critical role in our nationwide pandemic relief efforts—from delivering essential medical supplies and protective equipment to facilitating voting by mail in preparation for the 2020 election,” National Security Subcommittee Chairman Stephen F. Lynch said. “As we develop additional stimulus legislation, it is imperative that we include robust funding for the Postal Service, our most trusted government institution, to ensure the continuation of vital services for the American people and protect the right of every citizen to vote in 2020.”

“Every day, the dedicated employees of the Postal Service are on the front lines of the COVID-19 pandemic to ensure all Americans receive their mail and packages, as well as critical medical supplies that are being shipped across the country,” Committee Member Brenda L. Lawrence said. “During a Census and election year, it is imperative that we have a fully functional Postal Service to ensure Americans across the country can participate in our democracy.”

Postmaster General Brennan provided the following information during the briefing:

The Postal Service will “run out of cash this fiscal year” without help from Congress and the Administration.

The Postal Service anticipates “a $13 billion revenue loss directly to COVID-19 this fiscal year and a $54.3 billion additional losses over ten years.”

The bipartisan Postal Service Board of Governors—appointed by President Trump—asked Congress to provide the Postal Service with:

  • a $25 billion emergency appropriations to offset coronavirus-related losses;
  • a $25 billion grant to fund “shovel-ready” projects to modernize the Postal Service;
  • access to $25 billion in unrestricted borrowing authority from Treasury.

The Postal Service comprises more than 31,600 retail locations and directly employs more than 650,000 people.  The Postal Service undergirds a more than $1.7 trillion mailing industry that employs more than 7.5 million people.

During the meeting, Members pressed for the Board of Governors’ requests for assistance to be included in the next coronavirus legislation.

Source: Postmaster General Warns Committee of Dire Consequences Without Congressional Action | U.S. House of Representatives