USPS stands by 5 day savings claim, criticizes PRC opinion - postalnews blog
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USPS stands by 5 day savings claim, criticizes PRC opinion

In a report delivered to Congress, USPS asserts that the Postal Regulatory Commission (PRC) based a recent advisory opinion on a “questionable” analysis of the potential cost savings that could be achieved by implementing a five-day delivery schedule to street addresses.

The Postal Service has estimated that making the move to a five-day schedule would yield a net annual cost reduction of $3.1 billion, based on extensive market research and financial estimates provided to the PRC last year. The PRC’s advisory opinion concluded a five-day street delivery schedule would only achieve $1.7 billion in net annual savings.

In its report to Congress, USPS said the $1.4 billion discrepancy results from:

  • The PRC’s unwillingness to recognize about $760 million in savings from increased letter carrier productivity and efficiency under a five-day schedule.
  • The PRC’s failure to account for more than $260 million in highway transportation and mail processing economies associated with one less day of street delivery.
  • The Commission’s summary dismissal of testimony by market research experts to reach its conclusion that the Postal Service estimate of annual revenue loss resulting from the change was understated by $386 million.

The Postal Service report says the total impact of transitioning to a five-day delivery schedule will significantly improve its financial stability. “No other single action the Postal Service could take operationally will result in such large costs savings,” it says.

The Postal Service report also disputes the PRC claim that the five-day delivery proposal did not sufficiently take into account the needs of customers in rural and remote areas. USPS contends its extensive market research considered the views of rural customers and incorporated them into its implementation plan.

Finally, the report says the PRC hasn’t fulfilled its core function in the nonbinding advisory process, which is to address whether the proposed service changes would be consistent with governing statutory policies.

This entry was posted on Sunday, June 12th, 2011 at 12:15 pm and is filed under 5 Day Delivery.com, postal, PRC. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

  • 4OURCE

    The postmaster general, his 98 appointed vice presidents, the postal board of governors, the prc, the president and all his imps, the congress, the unions, did I miss anyone? No wonder this bloated fiasco is doomed. I don’t believe any two agree on anything at any given time. The end result of wasteful serial spending is finally here.

  • Cliff2

    5 day plus eliminate door to door delivery. Put cluster boxes on the corner that cover several blocks. Carrier can just open up the back of the box and deliver several streets at once. No worries about snow and ice, or dogs or bad steps. Routes could easily be 1,200 stops or more with just cluster box delivery.

  • Jack

    And then you’ll be out of a job.

  • clueless

    Amazing. USPS says their numbers are correct and the PRC is wrong. But just the other day USPS was criticized by the OIG for misreporting how many post offices they actually closed. HQ numbers are ALWAYS wrong.

  • Jim Bob

    If you have less than ten years service, you’d better be worried. 6 year no layoff may become a thing of the past.

  • paul

    I remember reading a quote from pmg Potter when asked about the ability to deliver on Monday all that extra mail from no Saturday delivery. He stated that it takes a carrier the same amount of time to deliver ten pieces of mail to a delivery point as it does to deliver one. That was either an outright lie or undeniable ineptness.

  • Nutzy

    no matter how you look at the USPS is A doomed org. The head is eating what is left of a dying org.

  • cb

    Cliff, we already have routes with 1200 stops. Some of you carries need to get off your you know whats and start working. No wonder we are lossing money. A lot of offices have routes with only 300 stops and they work over time. What a joke.

    Jim, We will get the same contract as the clerks did. No lay off is still in there for the next 5 years.

  • dryMAILman

    Will The PMG stand by his claim that 95% of letters are walk-sequenced?
    Does anyone remember Sarbanes-Oxley and Enron? Will any Senator Google ‘OIG’ ‘postal’ ‘DPS’ ‘audit’?
    0% of my flats are walk-sequenced, I guess he forgot about those.
    If we go to 5-day, will I get the downsized part of my case back?

  • chad

    If the USPS goes to five days we could loss are FDA approval to deliver meds. to your door. It’s the Postal SERVICE why cut back a day how about cut back on that upper management’s pay. They have cut back way too much in the craft fields. How about not making use have to pre-fund so much for future health care.

  • Jack

    Five days would have helped a couple
    of years ago, now it seems to little to
    late.

  • bestcarrier

    Yep, and the same match idiots claiming all these savings are the same ones that failed to note that USPS overpaid $65 Billion to the feds.

    I’d love to try to defend the headshed once in awhile but with the idiots we have counting the beans We definitely need to hire some high school students and fire the overpaid bean counters.

  • mary

    The post office must be experimenting with a new 7 day delivery system. The reason I say that is because I witnessed two (2) postal employee in postal vehicles delivering mail on SUNDAY June 12, 2011, in the city of Richmond, VA! Is this a contractual violation? Or is this the accepted policy for the postal service now.

  • ray

    I believe it is called Express service?

  • Al Cross, Institute for Rural Journalism and Community Issues, University of Kentucky

    The “rural” people in the service’s focus groups were in Gwinnett County, Georgia, in suburban Atlanta, and Snohomish County, Washington, in suburban Seattle. These are metropolitan areas, not truly rural regions. The exception to that might be lightly populated central and eastern Snohomish County, but what were the chances that someone from there was picked for the Seattle focus group and was willing to drive to the city for it? USPS still doesn’t do right by rural.

  • rca

    sSo if we cut down to 5 day, how many businesses-like Amazon- will drop us?

    • brian

      rca- who will Amazon drop us for? No one else does six day delivery. And six day delivery certainly isn’t the only reason shippers use us. Why would they pay more to ship UPS or FedEx when they don’t have 6 day either?

  • tlk

    Regarding rural and 5 day…how will a regular rural carrier use a sick or annual leave day when the subs are gone?

  • Shorted Customer

    I live in SW Washington & our mail carrier never checks our box for out-going mail & I mean NEVER. He only comes to the door when there is in-coming & he still won’t take the out-going mail; forcing us to take it to a Blue box several blocks away. Calling the local office to complain about it didn’t get us anywhere either.
    One thing I’ve noticed they do around here it park their vehicle at the church on the corner & then deliver to several blocks by foot & then move on down the road & repeat. That seems an efficient way to save some $. What none of us appreciated was them taking the stamp machines out of the local office! You can’t exactly buy individual stamps at the grocery store & can’t always stop by the office during their cut-back hours.

  • debbie

    I FOUND THIS SITE JUST SEARCHING BECAUSE LIKE MANY PEOPLE IM REAL SCARED OF LOSING MY JOB I WAS HIRED IN APRIL 2003 AS A TRC AND THEN I WENT TO A RCA A I ASO DEULED AS A CASUAL CITY CARRIER AND LOVED IT I TOOK THE TEST BUT DIDNT GET HIRED AS A PTF NOW FOR THE LAST 5 YEARS IVE WORKED AS TE CITY CARRIER SO MY NINE YEARS OF SERVICE MEANS NOTHING IVE WATCH PEOPLE GET HIRED TAKE TOTAL ADVANTAGE OF THE POST OFFICE WHILE I BUSTED MY REAR END AND THE ONLY THING I GOT FOR IT WAS MY PAY AND A “YOUR LUCKY YOU HAVE A JOB” NOW HERE COMES FIVE DAY TO SAVE THOSE WHO ARE OVER PAID AND UNDER WORK TO SAVE THIER JOBS AND FOR THAT PERSON THAT SAYS UPS DOSENT DELIVER ON SAT. THEY DO!DO YOUR HOMEWORK FIVE DAY IS GOING TO BRING THE POST OFFICE DOWN AND I GUESS THATS OK FOR SOME BECAUSE THEY THINK WE SUCK!

  • thefactsrhere

    One thing I don’t understand is how someone that has no idea how the postal service operates can even comment on what the postal service needs to do to fix its budget woes? Now with that said take it from someone who knows what they are talking about> why would you want to stop mail delivery for 1 day per week when this is what it will do for the postal service> All of the offices would continue to be open on the days that just the delivery personal will be off> This would mean that most if not all of the substitute carriers would loose their jobs which could add a profit to the budget, but then that means that since the delivery or mail carrier which gets paid by the amount of work he carriers(not an hourly wage base) with the offices remaining open and the mail trucks/plants and such still running , The mail delivery person would be delivering the mail that was supposed to be delivered on the day he or she was forced to be off on the next day along with the mail for that day also, which means he or she will be delivering two days or being forced to do two days of work in the next day he is allowed to work. And I am quite sure he or she will be expected to do this double day of work with the same pay as one. Now with that said if you pay that delivery person by the work he or she is doing (which is how they are suppose to be paid) You will have to pay them for the extra days worth of mail which will wouldn’t be much of a saving at all (maybe a little for equipment allowance would be all you would save). Also lets say that you stop a day of delivery and keep the offices open which is what the postal service is wanting to do and you force the delivery person to do this extra day of work for free> then that would mean the budget for each office would save quite a bit> then as you probably don’t know is that the supervisors/managements pay and bonuses are based on the profit margin for that office so then most of the saved money would go to extra pay for the supervisors/managers and such since the profit for that office would increase. So where is the savings? This proposal just want work unless you put a pay lock on the overhead at the same time you stop mail delivery and also you should close all operations on that day. Now with all that said why should just the delivery personal be the ones to take the majority of the cut in salary for the entire postal service and the rest of the employees pay continue as normal or even at an increase? And might I add that as the mail volume has decreased over the past years the mail delivery personal pay has already been cut with the decrease in mail volume (they get paid by the work they do not an hourly rate) and be rest assured as the mail has decreased so has their pay been adjusted already. And that is probably something else you don’t know the postal service has and is continuing to adjust the pay for their delivery personal as the mail volume changes. So now I ask you this question where or what is the postal service savings going to be by stopping mail/parcel delivery on any day of the week? Also what has the postal service done with the pay they have already taken from the mail delivery personal over the past years as the mail volume has decreased? I know the answer; let’s see if you can figure it out?