NPMHU Submits Comments on USPS Proposal on Reduction of Service Standards
On September 21, 2011, the Postal Service released its “Proposal to Revise Service Standards for First-Class Mail, Periodicals, and Standard Mail.” Although this proposal is at its early stage - the September 21, 2011 document actually was an Advanced Notice of Proposed Rulemaking - the USPS definitely is planning to relax its service standards as part of its overhaul of the existing mail processing network. Along with various other stakeholders and commentators, the NPMHU has submitted its comments in response to this ill-conceived proposal. What follows are brief excerpts from the NPMHU comments. Please click here to view a PDF copy of the entire NPMHU submission.
At the very outset of its Proposal, the Postal Service candidly acknowledges that one of its core missions over the years has been to build up its mail processing and transportation networks to the point where those networks are sufficient “to achieve” the Postal Service’s current service standards for First-Class Mail and Periodicals, “particularly their overnight service standards.” See 76 Fed. Reg. at 58,434 (emphasis added). Yet in what can only be described as a defeatist—and self-defeating—response to “sharp revenue declines associated with falling [mail] volumes,” id., the Postal Service is now proposing effectively to abandon that core mission by: (i) eliminating the expectation of overnight service for First-Class Mail and Periodicals; (ii) substantially narrowing the two-day delivery range and substantially enlarging the three-day delivery range for such mail; and (iii) dismantling to a large degree the robust processing and transportation networks that have enabled the Postal Service “to achieve” its current service standards for such mail, “particularly their overnight service standards.”
…The Postal Service’s Proposal is ill-conceived and should unceremoniously be laid to rest. By increasing the delivery time for most First-Class Mail and Periodicals by one day, and by eliminating the expectation of overnight service for such mail, the Postal Service would effectively be abandoning what it itself acknowledges has been one of its core missions over the years and conceding that it is no longer capable of fulfilling that mission on behalf of the American people.
On its face, this is a defeatist approach to the Postal Service’s current financial difficulties. In an effort to reduce its costs, the Postal Service is proposing to severely downgrade its current service standards and dismantle its current mail processing and transportation networks, in a truly radical fashion that is guaranteed to result in a further precipitous decline in Postal Service revenues. Nothing in the Proposal indicates that the Postal Service has made any kind of careful assessment of these revenue losses; nor has the Postal Service compared those revenue losses against the Proposal’s anticipated cost savings, which are themselves overstated. To put it bluntly, the Postal Service has failed to come to grips with the distinct possibility that adoption of its Proposal would not “bring operating costs in line with revenues,” but instead would exacerbate the Postal Service’s current financial difficulties and beget further downgrades in service standards, in a true “death spiral.”
Before embarking on the untested and dangerous path of severely downgrading its service standards and repositioning itself as a provider of second- or third- tier shipping services, the Postal Service should painstakingly exhaust all alternative means of “bring[ing] operating costs in line with revenues”—including means that are calculated to augment rather than further diminish the Postal Service’s revenue streams.
The USPS is expected to review all comments filed, and to issue a Notice of Proposed Rulemaking in early December. At that point, interested parties will be allowed to file additional comments and reactions.