walkitout (walkitout) wrote,
walkitout
walkitout

Mumble USPS Mumble

I've posted three or four times on this topic, locked to me only, because I cannot seem to come up with a focus for this. Be Forewarned.

The United States Postal Service is mentioned in the Constitution of the United States. This is called the "Postal Power".

http://en.wikipedia.org/wiki/Postal_power

Obviously, the postal service has evolved over time. This entry gives a better sense of how what we expect from the postal service is the result of a bunch of mid-19th century reforms:

http://en.wikipedia.org/wiki/Universal_service

Mail volume really took off in the 20th century. They started keeping track in 1926:

about.usps.com/who-we-are/postal-history/first-class-mail-1926-2010.pdf

The relentless trend upward in first class mail volume was broken on three occasions: during the Great Depression, it decreased continuously from 1930 to 1933, then began increasing from that lower point, passing its 1929 peak sometime in 1942-3. It dropped for a couple of years following the end of the war, then continued upwards, uninterrupted, until 1972, which I find a little confusing, given the oil crisis wasn't until 1973. Anyway. Growth restarted in 1973 and continued unabated until a peak in 2001, and we've been dropping ever since. Current first class mail volumes are similar to those experienced in 1986.

Why?

For some of those years (2001-2, say, and then 2007 or 2008 on until now) could be explained by recessions. Maybe. But mail volume went up throughout the 20th century, unaffected by at least some of the recessions. Here are some reasons:

Electronic Benefits
Direct Deposit
Electronic Bill Pay
Direct billing of health insurance by health care providers
Electronic invoicing/account management/banking

Some things increase use of first class mail, such as no-questions-asked absentee balloting and Mail Voting as implemented by Oregon and now Washington State, however, the effects of this are dwarfed by the effects of social security ending paper checks. As a for instance.

First class mail is much more profitable for the postal service than "standard mail", which is to say bulk rate, or "junk mail" to complainers and whiners like me. Standard mail did make up for some of the drop in first class volume, in units but not in revenue, for part of the beginning of this century, however, it, too, is now dropping, altho not as precipitously as first class mail.

More things which will decrease use of first class mail: register to vote online without any paper/reduction in mailed paperwork voter registration. Until recently, if you registered to vote using the mechanisms put in place by NVRA, paper was produced somewhere along the line and mailed to someone. _You_ may not have put anything in the mail, but something went into the mail. Increasingly, that is no longer the case. About a dozen states have implemented end-to-end paper free online voter registration (including California) for at least everyone who is in the DMV database; more have reduced the amount of paper, which includes paper that gets mailed from public agencies that do voter registration mandated by NVRA (you think DMV, but you should also think anyone who does benefits).

Obviously, the postal service is trying to deal with the increasing mismatch between the capacity they built-out to during the 1990s, and their present reality, also, the reality of the near future. They are closing plants, improving automation, encouraging workers to retire, reducing hours, etc.

http://www.gao.gov/products/GAO-12-470

This report summarizes at a very high level what USPS has done and intends to do, assuming the are allowed to implement. The regulatory authority for USPS has signed off on the first phase of the plan (what's going to happen in the next couple years) but is not happy about the second phase, in part because the savings will entail reducing the service commitment for first class mail. For most of my life, the USPS has committed to delivering local area first class mail in one day; they are proposing to switch to within 2-3 days. This will allow them to reduce inter-facility trips and to engage in further consolidation and reduction of plant and employees.

http://www.prc.gov/Docs/85/85269/Advisory_Opinion_%20PDF%20_09282012.pdf

The regulatory authority is unhappy with some of USPS' assumptions, including how they model productivity, how they choose facilities to close, their failure to use all their data and, significantly, to account for how many mailers will quit mailing stuff USPS if the delivery commitment is relaxed.

The postal union is, obviously, unhappy. First, change is bad (duh, everyone knows that). Second, if you work for the postal service, you probably know a ton of people who don't work there any more, which is terrifying. Third, consolidation and specialization mean that the hard work of delivering the mail has become a longer day (perhaps 8 hours or more), as specialists increasingly prep ("case") the mail in the comfort of an air conditioned facility. Also, "standard mail" isn't known for being light. This is kinda brutal. Consolidation also means driving further to commute to work and driving further during the course of a day's work.

Republicans have two demands on them: (1) don't close anything in rural areas (which are largely where cuts are targeted, especially retail facilities and hours, due to low volume of business) and (2) the libertarian wing of the party would like to get rid of the USPS entirely.

Democrats are stuck with an even tougher problem: (1) this is a huge union, a big voting bloc they really cannot afford to piss off or piss away and (2) universal service is central to the way Democrats think about things.

In order to implement -- anything -- the postal service needs Congress to act (and part of their problems are due to Congress mandating prefunding of retirement on a massive scale) and we all know how much of that has been happening in Congress over the last few years.

I would argue that everything I have listed above is largely irrelevant to the true trouble facing the postal service. They have changed from being the lifeblood of transactions in the United States to being a way to deliver packages (<-- this is the good news) and inexpensive and not tremendously effective advertising for websites. Worse, because they have a universal service mandate, UPS and FedEx will sometimes "deliver" packages to remote locations by taking them to a post office and sending them through the mail. They are getting cherry picked and profited off of.

We're not _actually_ to that world yet, and it's possible we will never get there. Right now, the health industry's reluctance to automate has meant that most of us still see some amount of medical billing in the mailbox. While the IRS would prefer to direct deposit vs. sending you a refund check, and is happy to take your electronic payment (through their short list of payment providers) and your e-filed return, when they want to communicate with you, they're going to send you paper in the mail. Some other businesses and aspects of government remain firmly offline, and I don't expect birthday cards and seasonal greetings to completely virtualize for a long while yet.

But when I look at the GAO's chart of what USPS is expecting first class mail volume to do over the next few years, I have to wonder. How much first class mail is there going to be in 2020? will it be half of what we have today?

And how much of that will be advertising circulars that decided it was worth it to put in an envelope and mail first class?

ETA: If you dig down into the weeds of the PRC advisory opinion, it eventually becomes clear that PRC is trying to get USPS to close low-productivity plants and not change anything else.

"The table shows that the baseline network would be reduced to the 334 most productive plants in the network.43 Shifting volume from less productive to more productive plants, without changing operating windows or service standards, would increase productivity by 18 percent, and save $1.3 billion in direct mail processing costs." from p 35

It's a plausible thesis, much more plausible than the bigger-plants-are-more-productive thesis that USPS was operating under.
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