PostalReporter.com Blog

NALC, Other Unions Briefed By Postmaster General Potter On USPS Financial Condition

NALC President William H. Young and the leaders of several postal unions and management associations met with Postmaster General John Potter on September 22 to discuss how the deterioration of the U.S. economy is adversely affecting the United States Postal Service.

PMG Potter reported a significant erosion in the financial health of the USPS as mail volume fell sharply and rising fuel prices increased both transportation costs and labor expenses (COLAs). He indicated that a severe recession in several mail-intensive industries — housing,real estate, finance — would likely cause the USPS to lose $2.5 billion in fiscal year 2008.

“There is no doubt that the crisis in the American economy is having a severe impact on the Postal Service,” Young noted after the meeting. “NALC is committed to working with the PostalService to find ways to deal with the difficult circumstances facing us.”

However, he cautioned the Postal Service from launching unilateral initiatives to slash delivery costs outside the parameters set by the National Agreement.

“Our union is deeply engaged in efforts to find win-win solutions for the parties;we will act responsibly, but we will not accept management dictates that violate our rights,” Young said.

“Our goal is to help the Postal Service survive and prosper; if we work together, we will overcome the challenges posed by the poor economy,” he added.

source: NALC

16,000 Postal Employees Lack Years Required for Protection Against Layoffs 

USPS’ Bleak Financial Picture And the Presidential Election

Postmaster General John E. Potter informed the unions and the Postal Regulatory Commission this month that the Postal Service has experienced a 12 percent reduction in mail volume and that in Fiscal Year 2008 (ending Sept. 30), expenses will exceed revenue by approximately $2.3 billion. I do not challenge this assessment, as any casual review of mail processing plants or postal vehicles will reveal dramatic reductions in mail volume.

The 2008 deficit is not the largest the USPS has ever suffered, but for the first time in postal history, the losses cannot be recovered by postage rate increases.

The 2006 Postal Accountability and Enhancement Act, which was hailed by many in the postal community as the savior of the Postal Service, may ultimately be the single most damaging factor in its demise. Under the law, the only means for the USPS to recover the losses are:

• Substantial mail volume increases;
• Significant productivity improvements, or
• Invoking the law’s “exigency” clause.

(The exigency clause offers an exception to the law’s prohibition against increasing postage rates above the rate of inflation; it permits such increases in “extraordinary or exceptional” circumstances.)

Regrettably, there are no prospects for increases in mail volume or for productivity improvements sufficient to offset the current losses. Invoking the exigency clause — in order to increase postage rates more than the rate of inflation — would run the risk of accelerating the transformation from hard-copy communication to electronics. (Industry observers suggest that if postage rates rise too sharply, major mailers would abandon hard-copy communication in favor of e-mail and other technologies.)

To make matters worse, the 2008 deficit of $2.3 billion is expected to be matched in Fiscal Year 2009 with losses of an additional $2 billion. This means it will be necessary for the Postal Service to borrow $5 billion over a two-year period.

Although the Postal Service has the authority to borrow up to $15 billion, far in advance of reaching that limit, the Postal Regulatory Commission, Congress and the next president will be under tremendous pressure to privatize the Postal Service.

In response to the financial crisis, the Postal Service has announced a hiring freeze. And, in a meeting with union leaders and management association presidents, the Postmaster General pointed out that 16,000 USPS employees lack the six years of continuous service required to achieve protection against layoffs.

The PMG’s message was clear: For the first time in our history, postal employees may experience layoffs.

This looming crisis is the reason that the 2008 election for president and Congress is so important to postal employees. When serious discussions occur about the future of the Postal Service — and they will — postal unions must have a Congress and a president who understand our concerns. In the face of mounting federal deficits, the nation will decide the future role of the government in providing postal services.

As postal employees cast their votes in the 2008 election, protecting our employment must be a decisive factor in the choices we make. This time the decision cannot be based on abortion, guns, terrorism, or experience. This time it’s about your job.

And simply put, John McCain favors privatization; Barack Obama believes in public services.

The candidates haven’t had an opportunity to vote on postal privatization — yet — but they have voted on the privatization of other federal jobs: Obama voted against the Bush Administration plan to outsource and privatize hundreds of thousands of federal jobs; McCain voted for Bush’s program and voted to privatize federal jobs in 2006, 2004, and 2003.

I know that I cannot tell a member who to vote for. However, it is my responsibility to share with our members what I believe is in their interest as postal employees.

I strongly advise you against jumping from a five-story building without a parachute, but if you chose to do so, that is your right. You also have the right to vote for John McCain, but that decision is no different than the decision to jump.

This election is about your future as a postal employee. It’s about your job.

William Burrus
President

Post Office: Milton, Pennsylvania 17847 

 In an article posted by “The Consumerist” on September 21, 2008, it stated in part :

Postal employees have been ordered to upsell pricey express or priority mail services to anyone sending anything more than a letter, according to an anonymous tipster. The directive comes straight from Washington to help combat the Post Office’s $1.1 billion operating deficit. To avoid the upsell, specifically ask if there is a cheaper way to ship your package.

Here is some additional information on the issue submitted by a PostalReporter.com reader:

Mystery Shop Offices,

Attached is a 5 page comparison chart that shows the current mystery shop questions compared to the FY 09 requirements that will take effect October 1st, 2008.

Realistically there are very few changes to the program that we have not already been coaching, teaching, training, and should have been enforcing for the last 3 years.

I’ve outlined below some of the most noticeable evaluation changes, please print a copy of this message and the attached report and use this for the next 3 weeks mandatory Retail Standup Talks.  Keep in mind many of the requirements aren’t changing such as the associate needing to offer Express & Priority and explain features of both, suggesting Insurance and Delcon and explaining both, etc.  the below highlights are in addition to the current practices.

Mystery Shopper FY 09 Highlights/Enhancements:

*   Express MUST be offered & explained first, pause and then recommend Priority Mail (you’ll loose 10 points if Express is not offered 1st)

*   You MUST say Express comes with Insurance and Tracking

*   You MUST NOT suggest Parcel Post (if the associate suggests PP you will loose 7 points)

*   You can NO LONGER offer to explain the Special Services, every Special Service that is offered must be explained

*   Now you must explain features of EVERY additional item you offer for purchase: example

(“do you need any stamps today, we have a new Classic Car series that just came out this week”, “would you like a book of the Forever stamps they are valued at a 1 oz letter rate no matter what the price maybe”  “do you need any shipping supplies for the upcoming holidays”, “would you be interesting in learning about our PO Box rentals, they provide added protection and security for your mail”etc.)

That’s it……these are the biggest differences…..the only thing we haven’t previously required the associates to do was explain the additional item for purchase; the rest of the changes are minor tweaking of what we’ve already been doing.

The upcoming year is going to be lean and mean, we no longer can be complacent with our requirements your associates performance and productivity are being measured like never before and ultimately it’s up to the local management to ensure compliance.

We’ve got to mentally change our/their perception of what we are being paid to do. If employees feel these position requirements are too difficult for them to perform they need to consider a change in their career path, the window position requirements are going to continue to get more demanding just like the rest of the organization.

Mystery Shopper Evaluation Changes FY-09(PDF)

 Press Release from U.S. Postal Service

Board of Governors Told Customer Service Remains Top Priority

WASHINGTON, DC — As the current economic climate continues to contribute to a decrease in mail volume, and with no reversal in the trend in sight, the Postal Service reported today it expects to end the current fiscal year with a volume decline of nine billion pieces. The end-of-year financial results will be released in November.

At today’s Board of Governors meeting, Postmaster General John Potter said the magnitude of the loss in mail requires the Postal Service to take steps now to shore up its business, which it is doing by reducing work hours. “While we deal with the economic challenges, customers and service to our customers will always be number one on our agenda, it is why we exist, it is our franchise,” said Potter.

In other financial news, the Board approved a preliminary Fiscal Year 2010 appropriation request totaling $144.6 million. This annual request to Congress includes $115.6 million in reimbursement for free services the Postal Service is required to provide, including free mail for blind persons and for overseas voting. The request also includes reconciliation adjustments for previous years based upon final audited mail volumes. In addition, the request includes $29 million for the latest annual installment from the Revenue Forgone Reform Act of 1993. This act requires the Postal Service to be reimbursed for services it performed in 1991 through 1993 and for shortfalls in the reimbursement of costs the Postal Service incurred processing and delivering certain nonprofit mail from 1994 through 1998.

Savings and Service Improvements from New Program

The Board today approved funding for the next phase of a letter recognition improvement program that further automates mail operations, resulting in reduced error rates and manual sorting costs. Phase two of the Distribution Quality Improvement program goes beyond relying solely on the information that is contained on a piece of mail, which is sometimes inaccurate or incomplete. The new program combines information from commercially available name and address databases to match and resolve address conflicts. The system will generate the correct 11-digit barcode, enabling the mail piece to be sorted to the appropriate order of delivery automatically, avoiding several downstream manual handlings that are required using today’s letter recognition systems. Eight letter recognition improvement programs have been implemented since 1996, resulting in improved customer service as more mail is barcoded and processed electronically.

U.S. Postal Inspection Service Helps Reduce Identity Crimes

The Board also learned more about the role the U.S. Postal Inspection Service plays in a new system that is helping the law enforcement community crack down on identity crimes. The National Identity Crimes Law Enforcement network uses programming and other computer services provided by Postal Inspection Service to help law enforcement identify theft patterns, search for long-term trends in identity theft and provide for a central repository of identity crimes-related information. Authorities are now able to learn immediately whether a particular piece of identification has been reported stolen or used in the course of a crime.

The database was designed by local, state and federal criminal investigators participating in a work group, organized and led by the U.S. Attorney’s Office for the Eastern District of Pennsylvania. The Postal Inspection Service utilizes the network to reduce identity crimes committed by mail. A recent Federal Trade Commission study found that only two percent of identity theft victims who knew how their information was compromised said it was obtained through the mail.

In other action, the Board:

Approved Vision 2013, the Postal Service’s new 5-year strategic plan.  The plan focuses primarily on customers — meeting their needs by creating new value through the mail and generating profitable revenue for the Postal Service in an increasingly challenging environment.  Vision 2013 will be available on usps.com on October 1.
Authorized the purchase and renovation of an existing 28,500-square-foot building in San Francisco to serve as the new Townsend Carrier Annex to support present and future delivery requirements.

From ABC News 

The United States Postal Service will announce a $2.5 billion dollar yearly loss tomorrow, ABCNews.com has learned.

But postal officials say it is unlikely to result in any increase in the cost of mailing a first class letter.

The price of a first-class stamp was raised one cent in May of this year, to 42 cents, following an even larger loss last year of $5.1 billion.

Postmaster General John E. Potter has said no further increase in the cost of first class stamps would be considered until May, 2009 at the earliest.

 

 From National Association of Postal Supervisors (NAPS):

Postmaster General, Jack Potter met today with the leadership of the three management associations and craft unions representing all craft employees and EAS employees of the Postal Service.

The meeting was scheduled to brief the leadership of the employee organizations on the current situation in the Postal Service and to request the cooperation from all of the representative organizations in working together to get through this difficult period.

While the members of all our organizations are well aware of the lack of mail in the system, we were briefed on the dynamics of the revenue losses and the impact that it is having on our ability to operate. PMG Potter advised the association and union leadership that the financial condition of the Postal Service was poor with revenue falling considerably short of our objectives due to the overall poor U.S. economy.

Potter added that the Postal Service would need the help of the unions and associations in working with the Congress as the Postal Service attempts to develop solutions to our problems that will involve discussions and Congressional approval. Specific plans were not discussed at the meeting.

Potter advised that there are meetings this week with the Board of Governors of the USPS followed by a meeting with the Postal Service Area Vice Presidents. Potter added that it was his intention to increase the frequency of meetings with the association and union leadership to keep everyone informed of future plans.

NAPS will keep our members updated on information that is received from the Postal Service.

NAPS Headquarters

Summary: In offering the early-out program in 1992 , Postmaster General Marvin Runyon had hoped that 30,000 managers would retire. Instead, approximately 33,000 mail handlers, clerks and letter carriers took the offer .”For fiscal year 1992 the Service’s cost for the restructuring as reported in its audited financial statements totaled $1.01 billion. About $886 million of this represents retirement incentive payments (6 months salary) to employees. In total, about 48,000 employees took advantage of the special option retirement. By February 1993, the Service had in effect reduced the total work force, including career and non-career employees as well as overtime hours, by only about 7,300 employees, compared to a year earlier in February 1992.”

Below are excerpts from GAO Testimony Before the Committee on Post Office and Civil Service U.S. House of Representatives on the Postal Service’s 1992 Early Out
OPERATIONS ISSUES

GAO’s testimony focused partly s on the Postal Service’s (1) restructuring that largely took place from August to November of 1992.
Postal Service data show that the restructuring eliminated about 27,000 overhead positions and resulted in thousands of retirements, many of which were in non-overhead positions, without adversely affecting customer service in the short term.

The Service took steps to minimize adverse effects on postal employees during the restructuring. It offered employees earlyout opportunities and monetary retirement incentives. Assistance was also available for placing employees whose jobs were abolished. Even so, issues remain to be resolved; some employees have challenged Service personnel actions.The Service placed a high priority on maintaining service during the restructuring period, using 26 percent more overtime and about 35,312 (40 percent) more non-career employees than a year earlier. In aggregate, work hours increased by an equivalent of 1,115 employees from September 1992 to February 1993, compared to a year earlier.

Although the restructuring cost the Service slightly over a billion dollars, which was written off in 1992, it expects to save about $800 million in 1993 and $1.4 billion annually beginning in 1994.

GAO noted that savings from the restructuring could be reduced or offset by increased overtime and increased use of non-career employees. While automation can help the Service control labor cost, the ultimate impact is not yet clear. By February 1993, the total work force, including overtime hours, was only about 7,300 employees less than a year earlier in February 1992.

POSTAL SERVICE RESTRUCTURING AND ITS IMPACT

Soon after taking office in July 1992, Postmaster General Runyon announced plans for a top-down restructuring of the Postal Service. This was part of a broader strategy designed to make the Service more competitive, accountable, and credible. The restructuring was largely carried out over a 120-day period between August and November 1992. It was aimed at eliminating 30,000 overhead positions occupied by employees who were not directly involved in the processing and delivery of mail. As the restructuring began, Members of Congress, mailers, and employee groups expressed considerable concern about a possible adverse impact on mail service, particularly during the impending holiday season.

At the Committee’s request, we reviewed the Service’s data pertaining to the effects of the restructuring on (1) customer service, (2) employees, and (3) operating costs. It is important to recognize that a relatively short period of time has elapsed since the restructuring and, as a result, only limited data are available to demonstrate its effects to date.

Further, the Service took several steps to maintain service including using more overtime and hiring more non-career employees. In aggregate, the Service used the equivalent of 1,115 more employees during the period from September 11, 1992, to February 5, 1993, compared to a year earlier.

 In mid-March 1993, the Service was still considering abolishing additional overhead positions. Many employees in non-overhead positions, such as clerks, city carriers, postmasters, and mailhandlers, retired from the Service during this period. The Service extended the retirement incentive to these employees as part of a plan to free up positions that could be filled by (1) employees who occupied positions that were abolished and either were not eligible or chose not to retire or (2) new non-career employees. In total, about 48,000 employees took advantage of the special option retirement.

Some Employee Issues Remain Unresolved

In early March 1993, the Service had about 4,000 employees who had left overhead positions and were yet to be placed. Many of these employees were located in the New York and Chicago areas where relatively few non-union job vacancies existed. Service officials said they would try to place the employees into jobs within their commuting areas before directing employees to relocate to other cities. In some areas, the Service is offering employees union jobs in accordance with applicable pay, seniority, and other provisions of labor contracts.

The Service is also faced with resolving certain employee appeals and litigation surrounding the restructuring. According to a Merit System Protection Board official, that agency had received 66 appeals of personnel decisions relating to the restructuring.

As of March 23, 1993, 15 of the 66 appeals had either been withdrawn or dismissed and the remaining were still under consideration.

In January 1993, the National Association of Postmasters of the United States, which represents approximately 40,000 active and retired postmasters, requested a court injunction to prohibit the Service from filling postmaster positions unless established procedures for competitively filling the positions are followed.

About 5,000 postmasters retired, and the Service filled some of these positions with employees who had occupied abolished overhead positions. As of March 15, 1993, a decision on the case was pending.

Cost Savings Anticipated

For fiscal year 1992 the Service’s cost for the restructuring as reported in its audited financial statements totaled $1.01 billion. This amount was written off in fiscal year 1992 as a one-time, extraordinary expense. About $886 million of this represents retirement incentive payments to employees.

For fiscal year 1993 the Service estimated that the restructuring will save $800 million in operating cost and $1.4 billion management structure and automated data systems.

– Strong employee response to processing and delivery demands of the holiday season. Service-wide, employees worked 26 percent more overtime between September 1992 and February 1993 than during the comparable prior year’s period. In addition, about 3,000 employees, who were to retire by November 20, 1992, delayed their retirement by a month or longer.

– Use of non-career employees to replace career employees who retired during the restructuring. In February 1993, the Service had 35,312 (40 percent) more non-career employees than during February 1992.

In aggregate, work hours increased by an equivalent of 1,115 employees from September 19, 1992, through February 5, 1993, compared to a year earlier.

Steps Taken to Minimize Employee Impact

Our review of postal records as well as discussions with postal and union officials revealed that the Service took several steps designed to both ensure the timely reduction of the work force and minimize the adverse effects on postal employees.

– An early-out option was offered to permit most employees to retire at age 50 with at least 20 years of service or any age with at least 25 years of service.
– A monetary incentive was offered to encourage eligible employees to retire. This incentive was a lump-sum payment equal to 6 months of pay.
– The Postmaster General made a commitment that there would be no layoffs as a result of restructuring.
– A policy was established that provided that employees taking lower-paying, non-union jobs in the Service would retain their current grade and pay indefinitely.
– And, finally, the Service provided training, counseling, and job placement to assist employees in finding jobs within and outside the Service. This assistance is available through a national career management firm working with the Service under contract at 13 transition centers located at headquarters and field installations.
From August 1992 to mid-March 1993, 27,275 overhead positions were abolished. This represents about 3.7 percent of the August labor hour costs. For example, we estimated that work hour savings in 1991 in the functions most directly affected by automation amounted to about $138 million. But the work in those functions cost $627 million more than the year before because of wage and benefit increases. Additionally, the total work hours in the Service increased in 1991 although the volume of mail declined.

Nevertheless, the work in those functions affected by automation cost $583 million more than the previous year because of wage and benefit increases.
During the period September 19, 1992, through February 5, 1993, total work hours remained about the same as last year even though about 27,275 positions were abolished. By February 1993, the Service had in effect reduced the total work force, including career and non-career employees as well as overtime hours, by only about 7,300 employees, compared to a year earlier in February 1992.  As part of the restructuring, the Service did replace some career employees retiring from nonoverhead positions with non-career employees. 

From National Association of Postmasters Hotline

On September 17, 2008 the Postal Service faxed a notice to the NAPUS office from Anthony J. Vegliante, Senior Vice President Labor Relations USPS. It states in part; that due to the current financial situation a more controlled approach in managing the complement is needed. Therefore, a freeze on all organizational structure changes is effective immediately. The freeze includes position upgrades, additions to complement, position neutral exchanges, and requests for new positions and their related position evaluations. President Dale has a meeting with Jack Potter, Postmaster General on Monday, September 22, 2008.

From the National League of Postmasters: 

 Postal Service meeting on POVs and a pilot program that is slated to go nationwide soon - the SSA Revenue Goals System.

Postal Service representatives met yesterday with leaders of Napus and the League. While the stated purpose of the meeting was to discuss the liability of Postmasters and other postal employees while using their privately owned vehicles (POVs) to conduct postal business, part of the meeting was used to discuss a pilot program that will be pushed out to the field soon.

The discussion which centered around the use of POV was lively and touched upon the different scenarios in which Postmasters and others might be in the situation where the use of a POV may be possible and how employees would be covered by insurance in the event of an accident. Part of the discussion dealt with the differences in insurance from state to state and company to company. Though no agreement was reached in the meeting, through the healthy exchange of ideas, a couple of courses of action were decided upon. The League is optimistic that something good will come from this meeting regarding the use of POVs.

Postal Headquarters representatives briefed the Postmaster organizations on a pilot program that is slated to go nationwide soon. Called the SSA Revenue Goals System, the process will track the retail performance of Sales and Service Associates (SSAs) at offices on the POS system. The system will generate a daily report on the retail performance that will be made available to Postmasters and supervisors. In turn, Postmasters and supervisors will be able to share the information with the SSAs during morning huddles to let them know where they stand as far as helping their post office or station reach retail revenue goals. According to Postal Headquarters, the pilot has shown that the SSAs like the system as it engages them in the day-to-day operation of their offices. The APWU apparently has supported the efforts. The greatest concern to the Postmaster organizations was the additional workload to an often already overloaded Postmaster or supervisor. We were assured that the input was minimal, but the return should be large. Time will tell how effective the program will be.