The Postal Service’s Biggest Blunders

Cliff Guffey
APWU Executive Vice President

In the 1970s, the Postal Service established bulk mail centers. The concept was to create centralized locations for sorting sacks and parcels, using huge machines that featured hundreds of separations that made it possible to sort and dispatch mail directly to hundreds of destinations. This was intended to save days of delivery time, as well as save labor costs because there would be no need to re-handle parcels so many times — a larger proportion of packages would go directly to the delivery city.

Dock Clerks, however, were needed to direct the mail to the machines, and “non-machineable mail” still had to be worked in a manual operation with fewer separations, which generally meant a dispatch to at least one more city. In yet another “cost-cutting” measure, management reduced the complement of Dock Clerks.

Despite the lofty goals — and a substantial investment — management inexplicably began to allow a significant number of machineable parcels to be sorted manually. Once again machineable parcels began passing through several offices, slowing down delivery. Meanwhile, the huge sorting machines were busy processing smaller and standard-sized packages: books, boxes of checks, etc. As a result, the Postal Service has lost a dramatic share of its parcel business. I wonder who got the bonuses…

Anything But ‘Special’

Postal management determined in the early 1970s that it was a good idea to get in the “overnight delivery” business. But instead of upgrading its well established system, Special Delivery (a term so recognizable that it has been adopted as a synonym for everything from giving birth to basketball dunks), postal management’s solution was to get rid of Special Delivery and create “Express Mail.”

Then, in April 1973, the Board of Governors excluded “urgent letters” from USPS monopoly on letters, giving Federal Express (and others) the opportunity to enter the market.

What today is known as FedEx quickly began to dominate the market with a name so similar to Express Mail that most people didn’t know Federal Express was not part of the Postal Service, or that Express Mail was.

In another cost-savings move, the Postal Service decided not to expend sufficient funding to ensure that Express Mail would get the special attention it needed, such as being delivered on time. Instead, management gave Express Mail to the regular carriers, who often-times had not even left their stations before the “guaranteed time of delivery” for Express Mail.

I’m sure the Postal Service thought it would be worth it, even if delivered late, because the vast majority of recipients wouldn’t bother come back to their local post office for a refund. They were correct about one thing: Most “Express” Mail customers didn’t come back — they switched to FedEx.

In some cases, however, we were able to get our Express Mail to recipients faster than the private delivery service. But these successes were negated when we contracted to fly our mail on FedEx planes — which slowed us down to their schedule. So we lost Special Delivery and today have only a miniscule amount of expedited mail business. I wonder who got the bonuses....

Bar-Coding ‘Efficiency’

In the 1990s, postal management announced plans to invest in an automation system that would process virtually 100 percent of the mail very efficiently.

This $18 billion investment was in machinery that could bar-code, sort, and distribute mail. But while it was making the transition to automation, the Postal Service decided it could generate more business and save money by providing temporary discounts for companies that applied bar codes themselves and pre-sorted their mail. USPS customer-service reps traveled around, showing companies how to reduce their costs, which at the same time reduced Postal Service revenue.

More than a decade later the discounts remain in effect and the private companies are still applying bar codes and pre-sorting approximately 80 percent of the mail. By my calculations, that means the Postal Service bought 80 percent too much capacity and overspent by $14.4 billion. I wonder who got the bonuses….

Still At It

Customer-service reps are still out there working to reduce Postal Service revenues.

A company that might have spent $500,000 on its first-class mail years ago would spend less today if it pre-sorted the mail.

Worse still, many business mailers are deserting first-class mail in favor of Standard A (what we used to call Bulk Mail), which is significantly cheaper.

I’m all for helping USPS customers save money, but why is it that the Postal Service bends over backward to teach big businesses how to save millions while telling retail clerks they must “upsell” to Grandma. It will take a whole lot of grandmothers to make up the difference.

One more time: Who got the bonuses?

(source: The American Postal Worker Magazine- May/June 2005 pg 8-9)