The Postal Service mess — and what can be done to fix it

Postmaster General Louis DeJoy has claimed responsibility for one significant operational change since he took over at the massive federal agency in June: directing the U.S. Postal Service to ensure that trucks leave on schedule.

The same order came out of headquarters in April 2019, but apparently was ignored, with the agency logging 591,000 late trips nationwide in the second half of last year, including 13,000 late trips from the Philadelphia processing and distribution center in Southwest Philadelphia, according to a Postal Service report.

What happened?

“When orders come from up top, sometimes they’re not followed because the district manager or the plant manager knows they can’t implement it without having plant failures, mail left behind, mail not processed,” said Nick Casselli, president of the American Postal Workers Union Local 89 in Darby.

“With this new postmaster general, they followed his orders to the T,” Casselli said.

A Postal Service spokesperson declined to provide any information specific to the Philadelphia center, which is among the nation’s largest. The spokesperson denied union reports that, during the last week of August, trucks were leaving the Philadelphia processing center empty to stay on schedule and claims that large quantities of mail were left behind last week.

The Postal Service employs 18,133 in Southeastern Pennsylvania, Southern New Jersey, and Delaware. It employees 630,000 in total, making it one of the nation’s largest employers.

The turmoil caused by DeJoy’s insistence that trucks leave on time is a window into the wide-ranging disarray at the Postal Service, an unwieldy, independent federal agency that has seen its operating losses mount, its efficiency deteriorate as it increasingly fails to meet its own delivery standards, and its business shift from the paper mail it was built for to less-profitable packages.

All of those unfortunate trends — including the accumulation of as much as $119 billion in retirement liabilities — were in place, creating a ticking time bomb for taxpayers if no solution was found, long before DeJoy, a Trump campaign donor, took over in June.

“There’s tremendous dysfunction at the organization,” said Paul Steidler, a senior fellow at the nonprofit Lexington Institute, which advocates for limited government. “A lot of that dysfunction goes back to the fact their core business, their monopoly business for 200 years, the overwhelming proportion of that, which is mail delivery, is under severe stress, and it’s contracting.”

DeJoy, a former trucking company executive, seized on late truck departures as a problem at the agency. “The decision to focus on our transportation discipline was not made in a vacuum,” he told lawmakers last month.

He estimated $1 billion in savings from keeping trucks on time and eliminating extra trips to local post offices. The Postal Service declined to answer questions about that estimate, which is significantly more than the $410 million spent last year on extra trips, late trips, and associated overtime.

Consumers have been irate at mail delays.

“I’m getting letters that are six weeks old,” including bills that are already past due, said Edward Riley, who lives in Abington Township. “That doesn’t sit well with me,” said Riley, who started noticing mail not showing up in early June.

While complaints about mail delivery have grown into a firestorm this summer, fanned by unions, elected officials, and worries about the expected volume of mail-in ballots for the November election, they are not new.

Northern Liberties resident Sharon Richman said she has endured poor mail service ever since moving to the neighborhood in 2010 and despite many efforts to get it fixed. “My route has not had a dedicated carrier in 10 years,” she said.

In 2018, 6ABC news aired a report about missing and delayed mail in neighborhoods scattered throughout Philadelphia. Billy Penn a year ago documented rising complaints about missing mail and other delivery problems in the city.

DeJoy’s critics on Capitol Hill, in state government, and in unions fear that the push to keep trucks on schedule and other changes at the post office are part of a plan, encouraged by Trump, to undermine November’s election.

During an Aug. 12 news conference, Trump riffed on the House of Representatives’ desire to give the Postal Service $25 billion, “so the post office can handle this vast amount of ballots that are being sent at random all over the place,” suggesting universal mail-in voting would be “one of the greatest frauds in history.”

At least two federal lawsuits have been filed by nine states, including Pennsylvania and New Jersey, and several cities, asking courts to restore Postal Service operations to the pre-DeJoy days. Along with the resumption of late trips, the lawsuits demand that the Postal Service restore overtime pay and return sorting equipment to processing centers.

Both lawsuits claim that the Postal Service should have sought what is called an “advisory opinion” from its regulator, the Postal Regulatory Commission, before making any changes, such as directing trucks to leave on time and removing machines that sort mail.

Such opinions are not regular occurrences. There were six from 2010 through 2014, and none since, according to the commission website. There’s no sign of an advisory opinion last year, when top management previously directed trucks to leave on schedule.

“The political and media conversation around the Postal Service has become intense, politically polarized, and largely divorced from the agency’s actual short-term and long-term problems,” Kevin Kosar, a resident scholar at the American Enterprise Institute, in Washington, said in a paper last week.

Clearly, the president’s musings on Twitter and elsewhere about how mail-in voting could be undermined have set many state and federal politicians on edge, but that doesn’t mean there aren’t serious financial and operational problems at the Postal Service that need to be fixed, experts said.

Like many legacy institutions, the Postal Service, which dates to the Revolutionary era, has struggled to adapt to the digital age.

The volume of first-class mail, where it has a monopoly and which is its most profitable service, is down nearly 50% since its peak in 2001, according to the nonprofit USA Facts. Last year, the agency’s 54.9 billion pieces of first-class mail amounted to 167 per U.S. resident, down from 364 pieces of mail per person in 2001.

Meanwhile, the agency’s parcel deliveries have boomed, more than doubling in volume since 2010. Over the same time period, revenue from packages climbed 124%, to $22.8 billion, not far behind the $24.4 billion in revenue from first-class mail in the year ended Sept. 30, 2019. The agency had a total of $71 billion in revenue last year, up 6% from 2010.

Some, the president included, have suggested that the Postal Service should charge more to deliver packages, where the agency competes with for-profit businesses such as FedEx Corp. and United Parcel Service Inc. But that might not help because shippers can find alternatives, which is not the case with first-class letters delivered to a mailbox.

During a time of sharp growth in package delivery, the Postal Service’s core operating results, what it calls its “controllable” results, have deteriorated from a gain of $610 million in fiscal 2016 to a loss of $3.4 billion last year. Controllable costs do not include such things as the advance payments for retiree health benefits that are required by a 2006 law and have accounted for a large chunk of the Postal Service’s losses since then. Most federal agencies pay retiree health benefits as they incur them.

Some analysts believe that packages may be causing other services to suffer. The percentage of three- to five-day first-class mail delivered on time fell to 81% last year from 92% in 2010. Through June, the on-time delivery rate in the Philadelphia region was slightly better than the national average, at 83%, according to Postal Service data.

Package delivery is a very different type of service, said Steidler, of the Lexington Institute. “Packages don’t go to every address like mail does on a typical day. It requires more trips to the Postal Service. It’s more expensive. It’s just harder to handle and to work with.”

Casselli, the union president whose local represents 1,500 clerks, drivers, maintenance and others in the Philadelphia region, agreed that the Postal Service has not done enough to change its operations for parcels.

“The post office is always the last to adjust,” he said.

Many of the ideas to fix the Postal Service require Congress to take action, which does not often happen.

For example, experts say, Congress could help the Postal Service by giving it more flexibility in setting prices. For most mail, including periodicals, marketing mail, and first-class letters, the Postal Service cannot raise prices more than the increase in the Consumer Price Increase.

DeJoy suggested in his Aug. 21 Senate testimony that the Postal Service could trim its massive health-care costs for 600,000 retirees by integrating the coverage with Medicare. Unions oppose this change because it would cost workers more money. The Postal Service owes $114 billion to its retiree health-care benefit fund.

In a more abstract move, Congress could clearly define what the Postal Service is required to do, what kind of mail is essential to the public and deserves “government protection in the form of price caps and mandated delivery standards,” according to a presidential task force report from December 2018. That report said that six-day delivery should be an option, rather than a requirement.

DeJoy, for his part, told a senator who suggested that mail be delivered five days a week that he thinks delivery to 161 million addresses six days a week is “probably our biggest advantage to capitalize on.”

The trick, he said, is that “we need to get costs out and more pieces into our pouches.”