THE NATIONAL ASSOCIATION OF POSTMASTERS
OF THE UNITED STATES
WALTER OLIHOVIK, NATIONAL PRESIDENT
COMMENTS PRESENTED TO THE PRESIDENT’S COMMISSION ON THE U.S. POSTAL
SERVICE
Introduction
The National Association of Postmaster of the United States (NAPUS) is a
duly recognized professional association that represents our nation’s
approximately 27,000 postmasters. Moreover, almost 21,000 postmaster
retirees have joined the association. NAPUS’ mission extends beyond mere
Postmaster representation. The association promotes and protects
Postmasters; helps to assure users of the Postal Service the best possible
mail services; advocates Postmaster views on Capitol Hill, at the White
House, before regulatory bodies, and within the Postal Service; and works
closely with the Postal Service in the development of strategies for the
enhancement of Postmasters and the Postal Service. In addition, the
42,000-member association speaks on behalf of retired postmasters and
their families regarding retirement and benefit issues that may affect the
quality of their life after postal employment.
Postmasters are cognizant of the tremendous financial and operational
challenges the Postal Service presently confronts and will continue to
face in the future as the agency attempts to remain relevant and viable in
the postal marketplace. Indeed, the responsibilities of the postmaster,
the manager-in-charge of the post office, have changed over the past five
millennia. Ancient Mesopotamian city-states, where cuneiform was the
primary means of commercial contact, established “posts” as the means to
encourage communications. More recently, on our shores, colonial post
offices developed as the colonies expanded and continued to mature as the
country stretched across the continent to bind our nation together. Post
offices and the Postal Service itself have endowed this country with an
extraordinary heritage. Indeed, the post office has supported
civilization, and facilitated the growth of commerce and communications.
Nonetheless, the U.S. Postal Service, its facilities, and its personnel
operate within a new reality where the past can only provide a guidepost
for the future not all the answers. An outmoded business model, mail
diversion, labor and infrastructure costs, and new technologies may have
been anticipated. However, these factors were not confronted adequately
and honestly.
The Commission was not created to “sugar coat” the issues or to offer
simple, though unreliable solutions. Rather, Postmasters understand it was
created to frame the long-term issues, educate the American people, the
White House, and the Congress and to make specific recommendations on how
to ensure the viability of postal services. We hope that our input will
assist the Commission in is deliberations.
The Market
The current Postal Service market is diverse and is characterized by a
multitude of competing burdens, which at times may compete against one
another.
The Postal Service benefits from an almost iconic status. It has
incredible brand identity and Americans are extremely protective of the
institution. The Postmaster, the letter carrier and the window clerk are
recognizable in every community. They market, sell, and produce the goods
and services, which generate the revenue that underwrite postal
operations.
The Postal Service provides products and services to a number of divergent
though interdependent constituencies the two most prominent being
residential consumers and business mailers. The expectations that each
group has of the Postal Service have evolved over decades and are based
upon their unique needs and experiences.
Residential consumers expect mail to be delivered to their home six days a
week at a routine time; and it is anticipated that mail will be delivered
to its destination within a finite and determinable amount of time. This
is a monumental task, since the Postal Service delivers mail to
approximately 140 million delivery points; and last year added 1.8 million
new delivery points.
Visits to their post office to transact postal business should be quick,
friendly, and efficient. Mid- to large postal facilities should benefit
from frequent collection of mail that is to be transported to other postal
zones. Finally, residential customers expect mail entrusted to the Postal
Service to be handled by Postal personnel. At the very least, residential
customers expect that postal personnel staff the mail acceptance unit and
perform the delivery function.
The Postal Service also is in the unique position of responding to the
demands of identifiable communities, particularly rural ones. It is
important for many communities to have an institution that provides postal
boxes, a venue for financial transactions, and a place to retrieve mail
for which a government official must authenticate identification.
Business mailers may have overlapping expectations with residential
customers, but have different priorities. Commercial mailers, when they
visit the post office, value speed and accuracy of transactions.
Reliability and cost are also major concerns. Most large mailing houses
“drop” their mail at a postal distribution facility. Therefore, the
relationship with a retail unit may be limited or nonexistent. The speed
of mail acceptance at the distribution point is crucial, as well as the
efficiency of mail processing. Mailers desire postal penetration into
specific locations at designated times or frequencies. Consequently, the
speed from mail production to delivery point, at a reasonable and
predictable price and time, is vital. Not too long ago, business mailers
relied on the Postal Service to process and sort mail. Today, however,
more and more business mail is being pre-sorted or automated, reducing the
necessity for postal labor to be used to perform such functions. This
phenomenon has led to mailer demands that discounts be applied to mail
that has been processed or prepared for automation prior to entering the
mail stream.
The demands made on the Postal Service from these two defined
constituencies yield an interesting dichotomy. Postmasters, letter
carriers, and window clerks (collectively, the Postal Service’s frontline)
interact primarily with residential customers or small businesses. The
overwhelming number of delivery points is residential. The perception on
the part of the Postal vanguard is that the postal customer is the entity
with whom they interact on a day-to-day basis. In contrast, Postal
Headquarters interacts primarily with large business mailers, who generate
the majority of postal revenue. Therefore, the view on the part of
Headquarters is that the postal customer is the large revenue producer.
The result of this dual tract perception is that postal officials employ
different strategies to respond to dissimilar and sometimes conflicting
consumer demands.
The fact of the matter is that both the Postal Service’s frontline
personnel and Postal Headquarters are correct. Consequently, it is
imperative one not be played against the other. To do so would irreparably
damage the institution and the market that the Postal Service serves. The
work-sharing arrangements that have advanced over the past twenty years
have benefited the mailing community, residential customers and the Postal
Service itself. However, now it would appear prudent that the Postal
Service decide which path to follow in its quest to work with the mailing
community to shave costs. The Postal Service has expended millions and
millions of dollars to build an extensive infrastructure in its quest to
automate. NAPUS firmly believes that the Postal Service should create
adequate incentives to encourage mailers to use this technology to its
fullest capacity. Additionally, consideration should be given to private
sector mail processing units with the goal of enhancing cost-efficiencies.
Regulatory Reform
The current regulatory model cannot sustain a viable U.S. Postal
Service.
The pricing system under which the Postal Service operates is fatally
flawed. Moreover, the postal regulatory framework is obsolete and ill
serves the market it was created to promote. This indictment of the
regulatory system is a dynamic one; it grows with every year that the
system is not changed.
The exorbitant amount of time spent in adjusting postal rates places the
Postal Service at an insurmountable disadvantage when establishing prices
or in product development. Other entrants in the Postal market may adjust
their prices to reflect economic changes or competitive pressures. The
regulatory framework created thirty years ago, reflects a bygone area of
regulatory theory that no longer applies. Thirty years ago, the Postal
Service was the unchallenged leader in the hard copy and package transport
arena. As such, the Postal Service was a true government monopoly that
cried out for a regulatory authority to ensure that it did not abuse its
position to the detriment of its own customers. The Postal Rate Commission
was not established to hinder the Postal Service from responding to its
own customers or preempting it from fully participating in the postal
market. Nor, does NAPUS believe that the authors of the Postal
Reorganization Act envisioned a market where its regulatory creation would
conspire to cripple the Postal Service’s ability to compete against
mailing enterprises and transportation logistic entities, both foreign and
domestic. Indeed, the Postal Rate Commission mutated over the past thirty
years to redefine itself as the guardian of a market with sole
responsibility of limiting Postal participation in it. In sum, the rate
Commission has not enhanced the market for the benefit of the Postal
customers for whom it was created to protect.
NAPUS would respectfully suggest that the President’s Commission explore
opportunities for postal customers to benefit from the competitive
environment in which the Postal Service operates, not suffer from it. The
Postal Service should be able to adjust its rates periodically to react
expeditiously. Legislation has been proposed in previous Congresses that
would enable the Postal Service to adjust rates within a finite window
(e.g., the increase in the consumer price index), without having to first
seek the Postal Rate Commission’s approval. In addition, the Postal
Service should be able to negotiate postal rates directly with its
customers so long as other customers are not disadvantaged.
Postal Service should not continue to be regulated in a manner that
hinders its ability to expeditiously establish rates and bring new
products to market, nor should it be unfairly subjected to unfettered
subpoena power by a regulatory authority. However, if this were the case,
we believe that the same rules need apply to all postal competitors. That
is, any postal customer may seek relief within the postal regulatory
authority for “unfair competition” or “monopoly practices” against any
postal player, governmental or private.
Within this context, the regulatory model under which the Postal Service
operates unfairly constrains it. NAPUS strongly believe that Postal
operations, particularly the institution’s primary retail and delivery
network are inherently governmental functions. Foreign countries with
different socio-economic foundations can experiment with private ownership
of postal operations, but the breadth and history of the Postal Service
should lead even a casual observer to the opposite conclusion. The
doctrine of U.S. postal networks being intrinsically governmental is
underscored by the strong American expectation of privacy of the mail and
in the unwavering belief in its sanctity.
The Postal Service’s Transformation proposal to re-establish the Postal
Service, as a so-called Government Service Enterprise, balances the need
to provide the agency a freer hand in operating in the market, while at
the same time emphasizing its status with the federal government.
Universal Service
While the concept of universal service is evolutionary, it should still
be one of the primary goals of the Postal Service.
The Postal Service’s historic and present core mission is to provide the
American public, including the mailing community, with universal mail
services at an affordable price. Two existing misnomers are that the
current definitions of universal and affordable are the same today as they
were decades ago.
The universal service mandate is rooted in Title 39 of the United States
Code, sections 101 and 403, and postal regulations that have been adopted
over the years. Moreover, residential postal customers and many mailers
expect our nationwide postal network to delivery letters, periodicals,
advertisements, and parcels six days a week to their doors, residential
mailboxes and post office boxes. In addition, the Postal Service is
expected to support approximately 27,000 post offices, and more than
11,000 subsidiary postal facilities. This universal service concept was
never intended to be static. It evolved over the more than 200-year
history of the postal agency. For example, free city delivery did not
begin until 1863, and rural free delivery was established in 1896.
Additionally, many urban businesses received multiple daily deliveries for
many years. The Postal Service is also moving away from launching delivery
points at the physical residence or business location. Within urban and
suburban locations, greater reliance is being placed upon “curb-side”
deliveries and “cluster boxes” The Postal Service is relying more and more
on mailrooms in large commercial properties to accept mail for all offices
in these locations. Consequently, universal delivery standards are already
being modified by the Postal Service to respond the operational and fiscal
challenges.
Postmasters are the managers-in-charge of post offices. As such, NAPUS
members are accountable for postal operations and services in countless
cities, towns, and communities in the country. Post offices are not solely
the “bricks and mortar” building, which provides retail postal operations
to their customers. In many rural areas, the Postmaster may manage the
operation of a postal retail facility with or without rural routes, and is
the chief marketer for postal products. At the same time, an individual
post office may encompass multiple “postal stations” and outlets that
provide retail service. Moreover, the Postmaster may manage
mail-processing facilities and letter carrier annexes within a particular
post office’s jurisdiction. The Postmaster is responsible for the
management and supervision of all personnel and postal operations under
the authority of that post office.
The number of Post offices grew exponentially during the formative years
of our republic, up until the early 1900’s. However, during the past
almost 100 years, a large number of post offices have been closed and
suspended. In fact, over the past 40 years more than 14,000 post offices
have been either closed or suspended. Concurrently and more recently, the
Postal Service has encouraged postal customers particularly residential
customers to seek alternative venues in which to access postal services.
It is eminently clear that, under current law and established postal
regulations the Postal Service may, and in fact does, close post offices.
As previously stated, more than 14,000 have been terminated over the past
half-century. This power to close a post office is not to be taken
lightly, since many communities rely on the facility for basic mail
operations, and in many instances, a community’s very identity is
predicated upon the existence of the post office. For this reason,
specific due process procedures were enacted to ensure the community
impact was evaluated as the result of a post office closure. True, the
Postal Service may provide alternatives to post offices in certain areas,
but these facilities may be closed without any type of accountability.
America’s understanding of universal service also embraces the security of
the letter or package entrusted to the Postal Service. The restriction
placed upon access to the U.S. mailbox cannot be overemphasized. Security
and privacy are essential elements of the American concept of universal
mail service. This expectation is particularly noteworthy during these
uncertain times when the mail stream is vulnerable to bio-terrorism and
identify theft is a mounting concern. These factors highlight the
tremendous responsibility that the agency and its employees have within
the communications and the package transport arena.
The still-maturing internet, the growing comfort Americans have with
electronic fund transfers, and evolving modes of communications have
strained the ability of the Postal Service to sustain a universal service
model. This tension has led a number of policy makers to conclude
incorrectly that a “universal postal service” is obsolete. The core
mission of the Postal Service is based upon mail delivery to every
household and business in the country, and to postal access in every
community. While the concept of “universality” and “affordability” may
have changed, the underlying principle is the foundation upon which the
Postal Service should remain.
Despite greater reliance on “virtual communication” via the Internet,
substantial commerce and communications will continue to be on paper.
Letter, parcels and packages need to transport in a non-discriminatory
manner from vendor to delivery point. Furthermore, a postal presence in
urban, suburban, and rural areas is essential to the economic and cultural
well being of the specific communities served by the post office. Indeed,
in these locales especially rural ones the postmaster is usually the
most identifiable and responsive representative of the federal government.
Postmasters acknowledge that just because a post office has existed in a
particular location, by itself, is not reason enough to keep it going into
perpetuity. However, as a government service, the Postal Service and
individual post offices should not be evaluated based on revenue alone.
Indeed, fair and clear criteria need to be developed to assess the
necessity of a postal outlet within a particular area. Decisions over the
closure of an existing postal facility or the creation of a new one cannot
be arbitrary. Clear procedures must be established. Within the
decision-making process, the affect upon the community must be assessed.
The key question that should be asked and answered is whether the retail
outlet is “demographically” justifiable. This is a different question
than: Is the facility self-supporting? The justification in an urban,
suburban, or rural locale may very well be different. Population
dispersion and access to financial institutions and technology are factors
to be considered in evaluating the demographic rationale for a postal
outlet in a particular community. Under a “demographic necessity”
criterion, multiple postal stations within a defined urban or suburban
setting may be evaluated more stringently than a solitary post office for
which a rural community depends. Consistent with “universal service,” the
litmus test needs to be accessibility to the services needed within the
particular community and accountability for the provision of those
services.
Management Flexibility
Frontline managers need the authority and autonomy to direct effective
operations of postal facilities.
For the last quarter century, the Postal Service has resembled an unwieldy
military enterprise. Indeed, a clumsy patchwork of outdated rules and
regulations, combined with dubious workplace precedents have conspired to
undermine management flexibility. In addition, a swollen Postal
bureaucracy creates unnecessary and counterproductive interference in
communications between Postal Headquarters and its Postmasters. This
phenomenon has festered over the past thirty years and is particularly
acute at the facility level.
Postmasters are being suffocated between two competing challenges the
inability to deploy resources where needed and upper level management
reserving for itself local decision-making. In a country where innovation
and adaptation is heralded, the Postal Service is averse to having its
frontline managers actually manage operations in local post offices.
Decisions are being rendered “up the food chain.” In many instances,
individuals who have not “touched the mail”, or worked in a postal retail,
or processing facility for an extended period are making these decisions.
Many upper level postal managers are ill-equipped to make determinations
about resource deployment, post office hours, and inventory.
Unfortunately, such judgments are portrayed as directives. This type of
management style does not foster favorable relations between a Postmaster
and their boss.
Existing labor provisions, in many circumstances, can interfere with a
Postmaster’s ability to manage effectively his or her facility. Under
current labor contracts, employees may be restricted from performing tasks
that are not within the scope of responsibilities defined under their
National Agreement. A Postmaster may be precluded from training a postal
employee to perform certain tasks that may even fall within the
responsibilities of that craft. Under broad circumstances, a Postmaster
may not reassign a sorting clerk to perform window service. A letter
carrier is prohibited from working a postal window. Moreover, in many
facilities, even when there are long lines, a postmaster may not fill in
at a window. While we appreciate the nature of collective-bargaining
agreements, it still needs to be pointed out that some provisions can be a
hindrance to effective management.
It is difficult to manage a postal facility when performance incentives
are inconsistent. Managerial personnel participate in a compensation
system where a portion of their wage package is based upon performance
formerly referred to as Economic Value Added (EVA). Craft employees, upon
whom much of the success or failure of a performance cluster is reliant,
are insulated from performance-based compensation. Most students of modern
management acknowledge the concept of deviation in workplace performance.
Different employees, as the result of different skills and aptitudes
perform differently. However, collective bargaining has yielded a
compensation package where craft employees earn periodic across-the-board
wage increases and cost-of-living-adjustments. There are virtually no
incentives built into the system to encourage enhanced efficiencies. It is
unclear whether the Postal Service will be able to win a new compensation
system at the bargaining table with its unions, but it is important to
recognize the effect that divergent compensation systems could have on
postal efficiency and managerial capability.
Conclusion
The Postal Service and its Postmasters do not function in an operational
or political vacuum. Members of Congress have repeatedly articulated their
strong interest in the agency’s capacity to provide core postal services
to their constituents. Unfortunately, only a limited number of elected
officials comprehend the complexity of our Postal system and the intrinsic
cost in providing the services that their constituents expect and deserve.
Indeed, it is the unenviable task of this Commission to provide the
outline and suggestions to the Congress, so they may construct legislation
to reform and modernize the Postal Service. Ultimately, our elected
leaders will define the future of the institution. Members of Congress
have certain expectations and parameters that must be appreciated for us
to be successful in accomplishing our objectives.
It is abundantly clear that the Postal Service needs to change in order to
survive. On behalf of our nation’s postmasters, NAPUS respectfully
requests that the Commission make recommendations to the President and the
Congress to:
Ensure that the expectations of residential and business postal customers,
and communities are respected,
Enable the Postal Service to compete in the postal market, without overly
burdensome regulatory restrictions,
Sustain the Postal Service’s core mission of providing universal services
to both residential and business customers,
Empower frontline managers to manage effectively their post offices and to
provide appropriate incentives to its workforce.
Postmasters are ready to assist the Commission in its challenge to
finalize its report later this year. Furthermore, Postmasters are prepared
to fight on Capitol Hill on behalf of the future of the Postal Service and
the critical work that it performs for the American public and mailing
community.
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