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Stealth Transformation
Burrus Update #13-02, June 11, 2002
The Postal Service has initiated a nationwide public relations campaign to garner support for its "Transformation Plan." The plan is being presented as a broad effort to bring the Postal Service into the future and to have it operate as a business rather than as a government service. Few specifics have been provided, even though management is requesting public and employee support.
I have been given several briefings and a bound book outlining the plan, but after reviewing hundreds of pages of public relations rhetoric, I am aware of very few specifics regarding the Transformation Plan.
The plan includes the following proposals:
Move Simple Transactions Out of Post Offices
Does this mean transferring postage sales to private retail operations? Does the Transformation Plan propose to significantly reduce the number of postal retail employees? Does it propose to replace retail employees with minimum wage, non-union retail workers with no knowledge of postal rules and regulations? Does transformation mean that postal customers will no longer receive professional assistance with their mailing needs?
Create New, Low-Cost Retail Alternatives
What does this mean? Does management plan to convert retail operations to the private sector? Is a major effort underway to privatize retail operations?
Optimize the Retail Network
Does this effort include postal retail employees?
Use Technology to Enhance Value
Who could oppose that? Unfortunately, this part of the plan is bureaucratic gobbledygook.
Design Rates and Mail Preparation to Match Customer Capabilities and Needs
Does this mean more discounts that exceed the costs the Postal Service avoids? Does transformation mean additional subsidies to private corporations at the expense of a viable Postal Service?
Modification of the current ratemaking process would require changing the law. We will continue to inform Congress that the Postal Service has become the cash cow of the private mailing industry and we will remind American citizens that they should not be required to subsidize business mailings.
Position Mail as a Key Communications Medium and a Customer Relationship Management Tool
Management justifies postal transformation by claiming advances in technology threaten mail volume, yet the plan does nothing to counter that trend.
Enhance Package Services
This sounds good, but how does a government bureaucracy intend to erode the package monopoly of UPS and Fed Ex? Any effort to compete will result in reduced postage for package delivery as the competition drives down cost and reduces profits. Any success at enhancing package services would cause additional postal deficits If Priority Mail and Express Mail are indicators, postal management is unable to compete with the private sector in cost or delivery of packages.
Generate New Revenue by Retaining and Increasing International Market Share
The plan provides no explanation of the contribution international mail makes to postal revenues. Even if management were able to double the volume of international mail, the revenue generated will be less than $1.73 billion compared to a budget of $74 billion. This would do little to solve the USPS deficits that exceed $1 billion annually.
Promote Greater Ease of Use
One would think that promoting ease of use has always been management's prime objective, with ongoing efforts to better serve the public.
Develop A Corporate Pricing Plan
This sounds like a proposal for more discounts that favor corporations and direct mail firms at the expense of the average citizen. Maintaining the postal infrastructure (consisting of 38,000 facilities) ensures that every citizen has service. To maintain the infrastructure, every piece of mail must make a contribution.
A "corporate pricing plan" is a polite way of excusing business mail from contributing to the institutional costs of maintaining the Postal Service. A corporate pricing plan is a proposal for privatization of postal services. Under such a scheme, postage rates in metropolitan areas would be reduced, while postage in rural communities would be increased. Postal services would be based on the ability to pay.
Enhance Already Efficient Letter Processing
It is admirable that management recognizes that postal mail processing is "extremely efficient," but this efficiency should be reflected in reduced discounts. Instead, as postage costs have decreased, discounts have increased.
Complete Automation of Flat Processing
What's new? Does this mean that without transformation the automation of flat processing would not be completed?
Expand Mechanization of Material Handling Operations
Is management revisiting robotics? To date, robotics programs and tray management systems have yielded few benefits for management or employees.
Improve Delivery Efficiency
Good luck. With 1.7 million new addresses each year, any efficiency will be eaten up with growth. The experiment with Segway human transporters will have a marginal effect on delivery to every address, and efficiencies will be overwhelmed in time with consistent growth, year after year.
Increase Retail / Customer Service Productivity
Perhaps management will use a stopwatch at the customer service window or Segways behind the counter.
Consolidations - Implementation of Area Mail Processing Procedures
The explanation of the procedures for consolidating mail processing facilities consumes more than four pages of the Transformation Plan. This indicates a great emphasis on consolidations. This effort will have the greatest impact on APWU-represented employees as they are forced to transfer to distant installations in order to continue their employment.
Despite the fact that the postmaster general committed in writing to my office that there would be no consolidation initiatives, we expect that consolidations will play a major role in transformation. In terms of cost savings or efficiencies, little is gained with plant consolidations as the transportation costs associated with returning mail to the losing area approximates the savings from plant closings.
These are the prime ingredients of postal transformation as contained in the voluminous book outlining the plan. The entire proposal is prefaced on the projection that technology will reduce hard copy communication and require new revenue streams to replace first-class letter mail. Not a single proposal in the plan purports to replace lost first-class letter mail or the projected revenue loss it anticipates, however. The plan is essentially a rewrite of the Mailing Industry Task Force's plan to remake the Postal Service.
The major mailers and postal suppliers have converted postal management into their handmaidens for continued profit.
Postal transformation is but another way to spell privatization. Management, along with the major mailers and direct mail firms intend to dismantle universal service at universal rates bit by bit and when a national system can no longer be supported, convert the system to the private sector.
The APWU says "no" to management's transformation plan. It has little to do with saving the Postal Service and everything to do with increasing profits for the mailing industry.
