Tuesday, October 9, 2012

Come fly with us. The USPS reorganizes.

If you like the efficiency of the hub-and-spoke system that most US airlines use, you’ll love the new USPS organizational structure.  However, if you’ve ever missed your connection by 30 seconds, maybe you won’t.
In essence, the Post Office has proposed to reduce the number of major mail processing plants from 461 to fewer than 200 over the next two years.  Those closures mean fewer postal LaGuardias, Hartfields, LAXs and OHares, and more traffic coming through each remaining facility.

The question is, of course, can fewer—but larger—postal facilities handle the volume of mail?

recessionThe answer is:  they won’t have to do it all alone.  Each major postal facility would be supported by hundreds of smaller area ‘hub’ facilities.  However, exact details are still TBD, and even the assignment of zip codes is still up in the air. 

But wait a minute!  Three massive storms are approaching.  These storms may be enough to postpone reorganization liftoff. 

#1 is Unions, who have taken their complaints to the Postal Regulatory Commission (PRC).  The proposed plan cuts 35,000 jobs—most of them union—from a total of 151,000 mail processing positions. Cutting 23% of the workforce will obviously affect the Union’s membership—and its pocketbook—in a big way.  The PRC says it will delay any decision until later this year. 

#2 is the political election cycle.  The USPS has already agreed to forego closures during the peak election cycle—September to early November—so that election mail is not jeopardized. 

#3 is the coming holiday season.  Not wishing to repeat its abysmal 2011 holiday delivery performance, the USPS has decided to suspend closures during the peak holiday season of November and December.

Those three factors pretty much preclude closures for 2012. 

2013 is another story.  USPS management hopes to move forward with the new network restructuring as early as possible, citing that it should save about $2.6B a year. 

The second question is, can 23% fewer employees process the same volume of mail?

The answer has to be some combination of more automation or less mail volume.  The Post Office has been ramping up automation for years (Merlin is a perpetual favorite!); reduced mail volume is taking care of itself. 

Postal Plan B is to cut Saturday delivery.  Despite evidence that 5-day-a-week delivery could save the USPS up to $3B a year, Congress is not ready to approve this step yet.

Print publishers especially are concerned that the shortened delivery week could impact their editorial relevance.  The USPS has agreed to continue overnight delivery for periodicals if the printers could deliver mail that has to be sorted to the Post Office by 11:00 a.m. and deliver carrier routed mail by 5 p.m.  Unfortunately, that schedule leaves the publications’ writers working on the red-eye express, writing until the wee hours.

Postal Plan C is to.....   Oops.  Sorry.  There doesn’t appear to be a Plan C.  

So to recap:  The Post Office, which has announced it will be insolvent by Labor Day, can’t take any cost cutting actions this year because of various external forces. 

Please fasten your seat belts.  It’s going to be a bumpy ride.

1 comment:

Sofia Sana said...

Thanks and thank you for featuring it on your spotlight
Thank you. I have braced for impact.

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