Sunday, April 11, 2010

Saturday Delivery

Well, we've all heard the USPS is going to stop Saturday deliveries and how they're claiming to save money doing so. I wasn't sure what the extent of their shutdown would entail, but after reading some of their plan, I've got a clue.

In order to understand what they are proposing, one needs to understand the mechanics of moving mail. I worked at a Sectional Center Facility (SCF) office - specifically, Dodge City KS. That office processes primary (raw) mail going outbound to the world from all the towns that start with 678 in their zip code. This requires a fleet of bid carriers that pick up the raw mail from the towns on their route to present it for processing at Dodge in the evening. The third shift (Tour Three) of clerks process (cancel the stamps, and sort letters into machinable or manual - machinable is then sorted by machine and manual by hand) that mail to go outbound. The outbound mail is shipped on several trucks that have different destinations. One winds it's way around some of the other state SCF facilities on the way to Kansas City, and the other goes straight to Wichita - the main office "over" Dodge. The Kansas City truck stops at Hays first, where mail going to Hays, Denver, and Colby is dropped off - as an example of how the Dodge City office has to separate the mail. They can't just lump it all together and send it to Wichita. Another truck comes straight from the Kansas City Bulk Mail Center and arrives in the afternoon. Junk mail - all of it.

Meanwhile, there are a couple of trucks headed towards Dodge City from KC and Wichita. They get to Dodge a little after midnight with mail from the rest of the world bound for the 678 area. The first shift (Tour One) sorts this mail - it's already processed down to at least the 678 level. Some trays of letters might be directs - all the letters in that tray might all go to Garden City, for instance. That mail is merely "cut" to the staging area for that contractor to haul there. The rest of the mail has to be sorted manually or in the case of letters - by machine. Lots of mail still arrives in bags and must be dumped, then sorted into bags for each town. Towards the end of the shift, the sorting has to be finished and the various letter trays finished and cut to the runs, bag racks torn down and cut to the runs, and so on.

Remember the bid carriers from the small towns? They spent a few hours grabbing some sleep, then early in the morning, pick up the mail for their route, and deliver it to each office in the wee hours. Clerks in the satellite offices finish sorting their processed mail. The bid carriers go to bed for a few hours to repeat the whole thing once more later that evening.

Meanwhile, the home office switches gears and sorts mail for Dodge City. That mail is sorted by carrier route. The machines can sort letters in the order they're delivered, but much of the mail has to be sorted manually. This mail must be finished in time for the carriers to "case" - they sort their manual mail in the delivery order. Tour Two - the carriers, window clerks and maintenance crew show up for work. The carriers deliver their mail, and at the end of their day, one has to go on "collections." That carrier follows a route and picks up the raw mail from all the blue boxes scattered around town, plus the contract outlets at certain grocery stores. Tour Three came on in the middle of the afternoon, and started working on bulk mail, but in the evening, switches to primary.

This goes on five days a week. Saturdays - Tour One has a full load and sends out the usual amount for Saturday delivery. Tour Three is a skeleton crew that merely passes primary mail on to Wichita for processing, and unloads the bulk mail truck. Primary first class volume is minimal compared to the rest of the week. Sundays - Tour One still shows up for work and sorts mail that will eventually deliver Monday. Tour Three is a skeleton crew again - just enough to unload the bulk mail truck and work some of that mail.

Monday Tour One generally sends out a glut of mail - backed up bulk mail and first class mail that arrived at the center both Sunday and Monday mornings. Most of the satellite offices have to curtail delivery of bulk mail in favor of getting the surfeit of first class mail out on time.

This is all an oversimplification, and I'm not sure I'm being all that clear. My point is that there is a rather complicated set of events that have to happen in order and happen frequently or there is a major disruption in the mail flow. I've seen what happens if a truck is delayed by - oh, say - a blizzard. It ain't pretty. Plus, the truck volume is pretty well maximized already. They leave and arrive full. There are only so many hours in a day, and there are only so many workers that exist to sort this mail. In many of the smallest offices - it's just the Postmaster or their temporary replacement - Postmaster Relief (PMR) - who usually only works on Saturday or when the PM goes on vacation.

Now, let's look at what the Post Office has to say:

Discontinuing Saturday delivery and collections would result in significant savings by eliminating work performed by city and rural carriers. These savings account for $2.7 billion of the estimated $3 billion total.

City carrier savings will result from no longer needing the carriers who handle the sixth delivery day. This work is primarily performed by carrier technicians employed specifically for this purpose. These nearly 25,000 positions would no longer be needed. Other part-time and full-time assignments used to replace the regular carrier on the sixth day would also no longer be needed.

To determine the savings for city carriers, analysts considered the profile of average Saturday work — what portions would be saved by eliminating Saturday delivery, and what would still need to be done Monday through Friday to deliver Saturday mail volumes.

Most of Saturday’s office time would be transferred to other days, Monday through Friday. Most of Saturday’s street time would not be needed to deliver volume during the week.

I certainly disagree with that last statement. If you've just eliminated a full day's worth of "office time" - when the carriers sort their mail - it's going to have to be made up somewhere. There will be some time saved due to eliminating duplication of part of the job - the carriers will only be "tearing down their cases" for delivery once rather than twice, but still. I understand where they're coming from by claiming to eliminate the part time carrier assignments on weekends. They are saying the senior carriers will be working five day weeks and the part timers who fill in on the sixth day won't be needed. Currently, carriers work a rotating day off - they might have Tuesday and Sunday off this week, Wednesday and Sunday off next week. There are several PTF (part time flexible) carriers who fill in for them. The Post Office is saying those hours will be cut. I also have doubts about this, too.

In order for this to work, carriers must be able to process twice the mail on Mondays in the same time as before. Not gonna happen. There will be more office time on Mondays for sure. This is going to eat into their available street time. One of the current strategies for getting all the mail delivered on a heavy day is to have the PTFs take part of the regular carriers' mail and deliver it for them as the day goes by. The supervisor hears that carrier so and so is having trouble, so they'll dispatch a PTF to meet the troubled "delivery specialist" and take some of their "loops" to help deliver. Carrier supervisors are going to need all their extra help on site and working during the first part of the week to cover the extra load, period. So much for eliminating beau coups hours thataway. Another thing that has to be noted is the overtime regulations the Post Office is contractually obligated to follow. Anything over eight hours is overtime. Even for part timers. If Joe Part Time works ten hours in a day, and that is all he works all week, he'll draw eight hours straight time and two hours overtime. Also, if he goes over ten hours, penalty overtime is triggered. Anything over ten hours is double time. Supervisors who authorize double time are cutting their own throats for any promotions in the future. So, penalty OT is right out. This proviso is suspended during the Christmas rush - it's just regular OT during that time period. In order to avoid burning penalty OT, managers are going to have to be Johnny On The Spot with help for their senior carriers.

And another thing while I'm at it - reading the Post Office proposal might give you the impression that the "temporary" or "part time" help is sort of unnecessary, thus eliminating them will save money. Welp, the ol' PO is dead set against full time positions and fights the unions over this all the time. They'd prefer that all the help should be in a part time mode. So, any time a full time employee retires, it's a fight between management and the union to replace that position. Sometimes, management wins. As a result, the part time employees actually put in more hours than most of the senior full time employees (who had to run through this gauntlet in the past, and aren't all that interested in tons of hours anymore - they're in a position to refuse overtime, and do so). In order to get the mail delivered in six days requires quite a few "part timers" just because of deliberate short staffing strategies. Do you really think that just because there is a day less to do it all, the part timers are gonna be sent home?

The estimated work-hour savings for the four types of rural routes are based on the current rural carrier compensation rates. Estimated savings are 18 million work hours, nearly 10 percent of FY 2009 rural carrier hours.

The bulk of the savings would come from work-hour reductions for rural carrier associates (RCAs). The wage rate for RCAs is about half that for regular rural carriers

There also would be vehicle-related savings. Reduced driving would provide savings in fuel and maintenance costs for postal vehicles, and reduce payments for equipment maintenance allowances for carrier-owned vehicles.

The rural carriers are private. Most work five day weeks, and have an RCA available for their off day. I can see the RCA hours being cut and money savings, but it's going to come at the expense of the rural carriers. They operate on bids, so it doesn't matter to the USPS how many hours they work. There is no floating pool of "delivery specialists" to help them. They're on their own. And, I can see the vehicular savings as well. If it's parked, the only costs are fixed. The rural carriers will only be traveling their routes five times instead of six, so mileage allowances will be cut.
Eliminating Saturday delivery also would result in supervisor work reductions. These work reduction savings have been offset to reflect the cost of continuing to deliver Express Mail on Saturday.

About $200 million in annual savings could be realized because of lower processing costs at plants and Post Offices. Moving outgoing sorting from Saturday to Monday would allow savings in plant clerks, mail handlers and supervisors, and reduced maintenance.

Further, eliminating Saturday delivery and collections would reduce the need for clerk staffing at Post Offices. While much of the work formerly performed on Saturday would need to be done Monday through Friday instead, there would still be savings from the activities for which costs are driven by the number of routes and days of delivery.

About $380 million in annual transportation savings would be realized by eliminating Saturday delivery via highway contract, postal vehicle drivers, and contract delivery. Highway contract savings would result from a reduced need for highway transportation on Saturday and Sunday.

Air transport savings would be achieved because less mail would require use of air transportation. Also, eliminating Saturday carrier delivery and collection reduces the need for vehicle service drivers to transport mail between Post Offices and plants on Saturday. Contract delivery savings would also result by modifying contracts to eliminate Saturday delivery.

They are clearly saying that all that delivery machinery on Saturday and Sunday will stop. There was a comment about delivery of Express Mail on weekends, but if there is no way to get it delivered to the destination office, there isn't much point in keeping someone around to deliver it to the destination address. There is also not much point in guaranteeing Express Mail delivery overnight or second day by three pm. If you take it in on Friday expecting it to be delivered at the advertised time, you will be disappointed. Can we say USP or FedEx? If they eliminate all the truck routes, then there has to be some sort of system set up just for the occasional Express Mail piece - which works if you are close to a major airport. Otherwise, it has to be trucked.

FedEx actually carries quite a bit of first class mail for the USPS - a major portion of Priority Mail is handled by them. I'm not sure about the capacity - maybe FedEx has enough space on their planes in place and the USPS has it contracted to absorb the glut of mail on Monday. Considering the planning I've seen from the USPS in the past - well, Oh Ye of Little Faith, I guess.

What does this all mean? The Postal Service self monitors it's delivery goals with EXFC scores - External First Class delivery times. That is gonna go to hell, I guarantee you. Historically, the weekend drop-off in volume trickles down to the delivery points about Wednesday. That means the lowered volume takes that long to show up at the other end. Mondays have always been hectic both for the carriers and clerks - volume of primary mail spikes and the weekend backlog of mail inundates the carrier and clerks sorting mail for their office. It's about to get a whole lot worse - it's a kiss of death for a supervisor to curtail first class delivery, but I'd bet that's about to change. Plus, I've already pointed out that the trucks from the major hubs arriving locally are pretty full. The USPS isn't paying for half full trucks to run up and down the highway - if they are half full, when the contract is renewed, they'll want a smaller truck. So, the trucks are definitely full on Mondays already. The mail that wasn't shipped on Saturday? If it's not being shipped, that means it's going to be stored. That means mail will be curtailed due to lack of cubes in a semi-trailer headed to SCF facilities. By Thursday it might all be shipped, but some will be delayed, end of story.

I've been looking at this from two points of view - the carriers and the shippers. Well, the clerks have to get the increased volume worked up and sent out to both - and that's gonna require extra hours, extra help or extra delays. A lot of my dark predictions depend on the clerks to actually get all the extra mail sorted in order for there to be a glut affecting the shippers and carriers. I'm sure they'll partially succeed.

I'd say the USPS will probably save some money from this - not as much as they're so optimistically predicting, but it will save some. What they aren't saying is how it will affect their performance. Add rate increases, and perception is gonna go downhill even faster.

To be fair, at least part of this isn't their fault. While they have a monopoly on the mailbox, they are not allowed to compete fairly in a lot of arenas. Have you ever bought wrapping materials at a Post Office - like a roll of tape? Ever notice how high priced it is? It's deliberately overpriced so as not to compete with other businesses - if you want it bad enough that you don't want to drive to a store that handles that stuff cheaper - you pay. That's out of the POs hands, as it were.

If anyone reading this is into marketing - has it ever bothered ya that sitting right there is still a positive brand with a fair amount of foot traffic, and it's not being utilized? No mini branch banks or McDonalds inside the local PO? No advertising allowed? Wouldn't a Kinko's style business work just great sharing space in a larger Post Office? The USPS pays a price for it's monopoly of certain services, and staying out of other commercial enterprises is one of the associated costs. Another huge advantage UPS and FedEx have is that if they don't have something for you, they don't come by at all. USPS does - six days a week.

I used to be against privatizing the Postal Service. I had drunk deeply from the union chalice on certain subjects. Sending a letter from Chicago to NYC would be cheap, but just how much would it cost to send a letter from Outer Mongolia Montana to Tumbleweed Texas if there were several entities that had to interline to get it sent? That argument ignores the agreements and cheap shipping prices the freight industry enjoys - a pallet of stuff might pass through several different shipping companies, but it's accomplished at a fairly reasonable rate no matter how many companies handle it. I'm sure private enterprise would be able to figure something out, and what was once the USPS could be right in there competing with the rest, and making money instead of wanting bailed out all the time. If not, oh well. Someone would step up.

Otherwise, considering the inevitable decline of mail volume, we'll be seeing this again, only going from five day delivery to four, or some other cut in services and increasing rates.

Frankly, I'm sooooo glad I don't work there it ain't even funny.


Anonymous said...

I sorta' knew some of this (Dad's cousin was a small-town postmaster), but thanks very much for filling in the blanks.

Jerry in Texas said...

We've already got some issues with our mail service company we use at the HQ. The PO changed their last pickup from 9pm to 6pm to 4pm in less than a year. That means if the mail service doesn't pick up at the HQ by noon, it can't make the 4pm dropoff. We have union rules about when they get their paystub. On a holiday weekend, we have to deliver the paystubs to the outsource company in order for them to make the 4pm deadline.

We are looking at getting a small envelope stuffer and doing it ourselves. Also more online Employee Self Service functionality where an employee can view/print their own paystubs.

On a local front, I don't know how our local paper, with Mon-Sat editions will be delivered via USPS on a five day window.

Jeffro said...

farmist: Thanks!
Jerry: if your paper is gonna get delivered, it won't be by the USPS. Plus, they only have one product that has a guaranteed delivery window (Express Mail), and five day delivery is gonna screw that up. The rest of the types of mail? Yer on yer own. Great way to run a business, no?