Wednesday, June 15, 2011

Dispute on Five-Day delivery savings

The Postal Service thinks that by going to five day delivery, it will save $3.1 billion.

The Postal Regulatory Commission (PRC) thinks differently. In their March 24, 2011 advisory opinion, they estimated there would only be $1.7 billion in net annual savings.

USPS has challenged the findings in these specific areas:

* $760 million in savings from increased city carrier productivity and efficiency under a five-day schedule that the PRC didnt' account for.
*$260 million in highway transportation and mail processing economies associated with one less day of street delivery that the PRC underestimated.
* $386 million in annual revenue loss that the PRC assumed.

What do you think the savings will be if we go to five day delivery? What will the cost be?

Comment here.

The whole USPS report is here.

35 comments:

Anonymous said...

How about if we stop guessing and actually do a 30 day trial in several locations accross the nation. That would give us an actual cost savings, accurate customer feed back, and we would be able to evaluate our actual ability to deliver mail in a timely basis. All of this "guessing" is such a waste of time because if we have learned nothing.....the US Goverment is never able to estimate projects such as this accurately.

Anonymous said...

Both agencies are using "made up" numbers for almost all the cost elements. The cost of rural carrier savings for example, they use a "given" number for the salary rate instead of looking at each and every route (Which each office could give them). They also are assuming that a carrier can delivery 6 days worth of mail in 5 days with little or no extra hours, which is not possible...so one has to wonder what formula they are using to "estimate" that savings.

Anonymous said...

They may be able to realize some savings on the city routes where there are large quantities of businesses that are closed on Saturdays, but in the rural areas it's a different story. In my rural office, Saturday is NOT the lowest volume day, it's the second HIGHEST volume day! Trying to deliver two days' worth of mail on one day will not realize any savings that I can see. We will end up paying our rural carriers overtime every week because of the doubled volume every Monday.

It's very easy for the PMG to sit in his office and look at numbers on a spreadsheet and come to a conclusion that cutting Saturday delivery would be a good idea. Those of us who would have to live with this mandate could give him another opinion, if he would only ask.

Anonymous said...

How is cutting a day of delivery "Growing the Business"? Just asking.

grannybunny said...

We need to cut expenses, and this is the way to make the biggest single cut, so we have to continue to seek Congressional approval to do it. However, over time, it's becoming increasingly apparent that the Postal Regulatory Commission is part of the problem, not part of the solution.

gerardf1957 said...

It will be the beginning of the end of the USPS. Don't cut a day of service!!

Anonymous said...

If they go to five day delivery the retail windows will still be open and the PO Boxes will still get delivery so part of highway transportation will still be running to deliver that mail to the offices. In my (small) office the mail comes all mixed together. the rural and PO Box mail has to be sorted manually. We do not have DPS. So that mail will set until Monday or Tuesday if there is a holiday. The mail taken over the counter will set until Monday evening at 5:30 pm when the dispatch is picked up. Again,unless there is a Monday holiday. They are always on us about the EXFC scores, well that will be down the tube. Prioriy mail is suppose to be delivered within 2-3 days. How can it be delivered if it is sitting in our office's for 2 days before it is even dispatched. They said that EXPRESS Mail we be dispatched on Saturday's buth who is going to take it to the plant since what I have read the will not have dispatches on Saturdays. Will I as Postmaster have to run this mail some where so it can get processed. I have a lot of people come on Saturdays to pick up accountables since the are not at home during the week went the carrier comes. We will also loose a lot of business such as money orders also. My rural customers do Money order applications and that money will be sitting in the office not drawing interest until it is cashed. I think it is a BIG mistake and will result in BIG loses in the long run.

Anonymous said...

To the above post....if you receive mail on Saturday (which you will) you will also have a Saturday dispatch.

Remember that EXFC is a postal created scoring system. If they go to 5 day delivery, they will also adjust the EXFC system.

The largest savings will be in fuel and EMA costs. My office (also small) would save about $5,000 a year in EMA alone.

Anonymous said...

Let's not forget about the RCA's and TRC's who would be out of jobs...they'd get fed up with not getting any hours and quit, then USPS could say those jobs were reduced through attrition.

Anonymous said...

Wouldn't any amount of savings be it 3 billion verus 1.7 billon still be a savings? I am not that crazy about going to 5 days but if we were any other kind of business and they could save that amount reguardless of what it was they would do it and not even hesitate. And yes it is never pleasant to have to reduce offices or any jobs.

Exhume said...

I think that the USPS is over estimating the savings.

First of all if five days is a must then one would think that only SCF's and above would have any Box Section Mail. It would not make any sense (cents) to run all of our AO Contracts just to haul a few trays of Box Section to each smaller down stream office.

Second...Monday would be a horrible day. Volume is going to be up - time on the street is going up. Overtime goes up which will offset some of the savings they anticipate by cutting Saturday delivery.

Third...On the processing side machines can only run so much an hour. Which means a longer run time on 1st and 2nd pass. Then trucks are late....mail is later getting to the carriers...more overtime.

Sitting around talking about it for years is not going to do anything. Like another blogger stated...they need to make some test sites. Implement their 5 day plan in some large cities and some small. Then sit back and begin to review the information that pours in. You need to be able to make a well informed decision and so far you have no hard proof as to what will be the exact outcome.

Everything looks better on paper which at this point, is all you have.

Anonymous said...

I think the extra savings that the USPS is counting on is getting rid of all that cannot carry the additional mail on a five day schedule. Our carriers are getting older and if they offer them anything extra to retire, I bet at least 1/3rd would be out in a flash. I think that is what my carrier is doing with the contracts coming up.
There is the extra savings of putting non career employees in their place. Like the new PSE clerks, there will be PSE carriers.

Anonymous said...

The Postal Service has been talking and talking and talking and NOTHING is being done about any thing at all. In my area the Postal Service just posted about 25 jobs EACH AND EVERY ONE of those jobs is a level 20 OR above. I thought the USPS was getting rid of these type of jobs.
What the USPS really needs to do is look at a Post office - has the postmaster been in the office or are they out ON A DETAIL. I know of offices in my area that the postmaster has been out for years and for whatever reason they will NEVER GO BACK. Give them an ulimatum either go back OR retire. This is all very crazy. GET SOMETHING DONE AND QUIT TALKING ABOUT IT OR WE WILL ALL BE OUT OF JOBS BECAUSE THERE WILL BE NO USPS.

Anonymous said...

How does cutting a day of service increase carrier productivity and efficiency?

Will Cooper said...

To save the kind of money that needs to be saved will require the Postal Service to come to a full stop in delivery and customer service on the sixth day. In to many parts of the country, we don't even come to a full stop on the seventh day or holidays. My bottom line, the PRC estimate is probably the closer to what will be reality.

Anonymous said...

Why don't the pencil pushers and the pocket patrol ask the peons where they could cut costs? Oh...wait... that would be a blow to their already inflated egos...
A lot of sense being said in the above comments but who is really listening?

Anonymous said...

Our mail has already been coming 2 hours late every Monday - if they add another day to it there is no way our carriers will get back. And plan on never getting day off - RCA's and PMR's will NOT stick around to work only leave days.

Anonymous said...

If you really want to make the USPS profitable, let's start with a refund of overpayments to Civil Service and FERS, and let's stop the prepayment for retiree health benefits. If congress would stop using USPS as a cash cow we would be fine.

Anonymous said...

Did you say it would "only" save 1.7 billion??

Anonymous said...

Want to have a REAL savings?? Check the USELESS MANAGERS in District and Area offices!!! They dont do anything to help move the mail, in fact the HINDER IT!!! The create a more hostile work environment, by sitting in their crystal palaces, and mandating that lower level managers, I.E. postmasters and supervisors, VIOLATE the contracts, which in turn costs the USPS MILLIONS in grievances, and steward time. Get rid of those idiots and make the person responsible for the contract violations responsible for them, IE take part of it out of their pay, instead of giving them a bonus for violating the contracts. DO YOU THINK that if this was a private company that the shareholders would put up with those losses?? GET REAL AND REALLY RUN this operation LIKE A REAL COMPANY. Quit hiring the worse from the craft positions and then let the postmasters and supervisors RUN THEIR DAMN OFFICES!!

Anonymous said...

Oh Man did the above blogger state the facts. As I have said before and I will say again and again, we MUST START AT THE TOP, not at the bottom. TOO MUCH waste on foolish STUFF. Yes something must be done to save the USPS but closing small rural American Post Offices is NOT the way to save us.

Anonymous said...

There is a lot of frustration in Post Offices because we do not know who will be the next office displaced or closed.

Several of the suggestions are right on target. Even with closing 7 districts and 1 area, most of those employees will just be shuffled around the system.

If USPS Headquarters wants to get SERIOUS about cutting costs, they need to continue cuts at the top. Also, go through EVERY management layer and offer VERA and/or incentives.

Then, offer the VERAs to the craft, BEFORE implementing the 5-day delivery and continuing with the current process of consolidations and closings.

"Your people come first, and if you treat them right, they will treat the customers right." Southwest Airlines.

The example begins at the top.

Anonymous said...

HQ has not approved the filling of any lower level post office positions for over 2 years because they keep holding onto the idea that they will be given the authority to close those offices. Its time for them to get off the pot and fill them all. If they get the authority to close offices, then they can deal with it. Its wrong for HQ to keep so many peoples lives in limbo.

Anonymous said...

I find it ironic that in the latest video from the PMG he says it's "all about the customer" and making every experience our customers have a positive one...yet, he is still pushing to close small post offices and diminish delivery service! Maybe I'm missing something, but this doesn't seem like steps to take in order to IMPROVE customer service!!

Anonymous said...

I think the prc's opinion is the most accurate. It's my opinion that we need to extend service not cut it. It has long been proven that cutting service doesn't make a company more valuable..

Anonymous said...

Why don't they cut out the MPOO positions? Nowhere are they listed in the management structure of the Postal Service. That would save more money than closing some of the small Post Offices.
DON'T WORRY, IF IT MAKES SENSE THEY WON'T DO IT!!

27 year PM said...

5-day delivery may sound like a good idea, but in my office, we still have a LOT of mail on Mondays. The Plant cannot seem to wait to run all of the pre-sort standard mail, so they clean up on the weekend and we get slammed every Monday! From what I've heard, all transportation will still run - thus we can push PO Box service - so there is not a lot of savings there. And don't even start on the sub issue! They will be so lost when they work that one day a month when the regular wants off...We need legislative change on the pre-funding and over payments - that's it!

Anonymous said...

The reason they are not filling any lower level Postmaster jobs is they can put the PMRs in as OICs. Then they cut the office hours so the PMR/OIC works 6 days a week. There are some offices when the PMR/OIC is sick they send clerks to fill in and they get travel pay. My PMR has been releaving other PMR/OIC's in some of the offices within a 25 mile radious. She gets no travel milage. She does it to help out the others so they can get some personal things done. Also, the PMR/OIC's only make $10.00-$12.00 per hour and no benefits so they are really saving money. Those office's are the ones they are trying to close. Small offices with no standing Postmaster. There are 2-3 offices that have not had a Postmaster for 2-4 years. I will be at my office until they try to close it. Then hopefully I'll have enough time in to retire.

Anonymous said...

PMG Donahoe stating that going to 5 day delivery would improve service is just absurd. It's all about finances. They need that savings for their bonuses. Former PMG Potter alone received over 1.5 million for his retirement benefits. Remember, Management is asking for control of delivery frequency, not for elimination of Saturday delivery. Former PMG Potter said going to 4 days of delivery would be even more in savings to the Postal Service. It's all about the money, not service.

Anonymous said...

I really laughed when I saw the statement from the PMG that "it's all about the customer". He's definitely playing to the large commercial mailers, but the small town household mailers are going to lose big-time. I was told by our District head of Consumer Relations that "those of you who choose to live in rural areas can't expect the same level of service we enjoy in the big cities". Really? What blatant discrimination.

Anonymous said...

If a Postmaster is on detail at an other office,and they want that office ,that postmaster should get the postmaster job.Why post it ? I don't get it.Where I am from I am OIC at an office. They want to close the office I was at before.I want this job. Same level of office.But the POOM wants me to go and apply for it .Why? I thought we were trying to save money.I have been a postmaster for 24 years.I believe I should get the first chance.

Anonymous said...

When we speak of lost revenue it is difficult to actually predict that number. That being said we talk about the new revenue for parcel select and headquarters said one of the reason's of this success is we deliver on Saturday. So it would appear that would eliminate that competitive advantage. I understand we need to look at reduced service to cut expenses but let's make it the last resort not the first one.

Anonymous said...

I think that some morally bankrupt business "leaders" and some corrupt politico officers of our company are trying to create a "CRISIS".
They will offer to "save" our Country from this crisis by selling off the parts of the business that do well and returning the shell that's left to tax supported status.
They will then give us a version of the famous line about having had to destroy something in order to save it.

Next time some liar using flakey corporate accounting magic tells you we are losing money, laugh at them and tell them to go pedal their fear somewhere else. And SHAME on them for trying to steal from all of us.

Anonymous said...

i think its better to loose a few thousand? jobs than it would be to loose them all. There's a great article in the May 30 - June 5 Bloomberg Businessweek all about the end of the mail as we know it. If you have a chance you should read it.

Anonymous said...

I have been a PMR for almost 15 years now. I was OIC in my office and 3 other offices, but I didn't get the Postmaster job when the PM retired because they don't want to pay another person any benefits. I may end up leaving as may a lot of others who will not even be guaranteed 2 hours a week if they close Saturdays.
I think closing Saturday is a bad idea. A lot of people do business on Sat. since they work all week and it's the only day they can do it. If they want to cut hours why don't they cut 15 minutes of office time a day instead of closing Sat?