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Relevance of PRC Decision In Network Optimization Review

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Right now the Postal Service has committed to Congress to hold off closing postal facilities and implementing Network Optimization Initiative (NOI) until mid-May. This date is two months before the Postal Regulatory Commission (PRC) will close the record on the Postal Service’s NOI proposal and between three to five months before the Commission publishes its opinion. The difference in time between when the Postal Service promised Congress that it would implement Network Optimization Imitative and when the Commission will issue raises an interesting question. Does the Postal Service have to wait for the Commission’s decision to act? Some believe that the Postal Service does not have the legal obligation to [...] Read more »

Legislative and Regulatory Delays Will Affect Introduction of Incentives for Early Retirement

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Early retirement incentives at the Postal Service requires both the funds to offer those incentives and an urgent need to reduce the workforce quickly.    In the past week, actions of two different government bodies had the effect of delaying any possible introduction of early retirement incentives. S. 1789, the 21st Century Act, had a provision that would provide the funds to allow the Postal Servcie to offer early retirement incentives.   However, after the publication of the Congressional Budget Office’s cost estimate on S. 1789, the 21st Century Act, appears likely to, at best, delay and, at worst, scuttle any chances for passing a postal reform bill in the Senate.   This [...] Read more »

Postal Service to Announce Price Changes

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The Postal Service will announce the price changes that will be included in its exigent rate case on Tuesday, July 6, 2010.    The Postal Service will then file the rate changes with the Postal Regulatory Commission shortly thereafter.    The Postal Regulatory Commission will have 90 days to review these rates. The rules regarding written comments on the Postal Service’s proposal in an exigent rate increases define the 3 issues that will like be the focus of the PRC’s decision on the proposed rates.  They are: The sufficiency of the justification for an exigent rate increase; The adequacy of the justification for increases in the amounts requested by the Postal Service; [...] Read more »

Optimizing the Postal Service Network and 6-day Delivery

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One of the benefits of the 6-day to 5-day proceeding is that it provides an enormous amount of data relevant for trying to understand the Postal Service’s strategy to control costs.  A recent response by the Postal Service to an interrogatory by Douglas Carlson provides the first nationwide picture of the Postal Service’s effort to consolidate sortation on Saturday among fewer facilities. The Postal Service can consolidate sortation of collection mail that is collected on Saturday because it has at least 12 hours of time to transport the mail for sortation at a distant facility and get that mail back for final sortation at the destination facility.  The list of [...] Read more »

Postal Service in Triage

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Anyone who has ever been in an emergency room has had to deal with a triage nurse.   The triage nurse’s job is to conduct an initial assessment of every patient that comes for emergency treatment and prioritize the patients based on the severity of their illness or injury. Triage gets complicated when there is second door for patients that come in ambulances.   These patients skip the triage nurse and may have their first assessment by the emergency room nurse or physician.  This second door may allow a patient who is less sick than one who is driven to the emergency room to see a physician faster, or at least be [...] Read more »

Walking Between the Law and Disaster

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The Postal Regulatory Commission held its public forum on the Postal Service’s Annual Compliance Review (ACR) yesterday.   The tenor of the discussion suggests that the Commission facing the challenge in this proceeding of walking the fine line between the law and disaster. Simply put, the ACR proceeding raises two questions relating to the law. Did the Postal Service’s ACR filing show that it complies with the requirements of 39 U.S. Code to 1) provide prompt, reliable, and efficient services to patrons in all areas[39 U.S.C. § 101 (a)] ; and 2) “to assure adequate revenues, including retained earnings, to maintain financial stability?” [39 U.S.C. § 3622(b)(5)]. If it did not, [...] Read more »

Rethinking The Value of Postal Regulatory Policy

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I have never been much of a fan of old regulatory process of setting postal prices.   The contradictions among the competing objectives of pricing policy in the law created a zero sum game that resulted in mailers and the Postal Service spending millions to litigate prices that could be set in a much less constrained litigious environment.  Currently, the Postal Regulatory Commission is in the middle of a proceeding to see whether what the Postal Service presented in its Annual Compliance Report puts it out of compliance with requirements in postal law in regards to financial stability and requirements in regards to pricing workshare discounts. As stated in previous posts, [...] Read more »

Regulating the USPS into Financial Stability

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In a previous post, “Re-Regulating the Postal Service?“, I noted that the Postal Regulatory Commission’s (PRC) interest in examining the Postal Service’s FY 2009 Annual Compliance Report represents the potential for a mini rate case.    Now that the PRC has chosen to proceed, this has happened.   In addition, the PRC has chosen to enter uncharted territory, examination of the Postal Service’s financial and business plans by asking whether the Postal Service generated sufficient revenue in 2009 “to assure adequate revenues, including retained earnings, to maintain financial stability.” [39 U.S.C. § 3622(b)(5)] Overhanging all of the specific areas of inquiring discussed below, postal stakeholders face a concern that hangs over the [...] Read more »

Financial Insolvency

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In a recent post, APWU President suggested that the Postal Service’s financial problems has one cause and one cause only, the onerous payment schedule for funding retiree health plans. He is right that this is a serious problem. There are reasonable arguments that both the amount that Office of Personnel Management (OPM) says the Postal Service owes significantly overstates what the Postal Service actually owes and that payment schedule makes no sense for the enterprise. (See USPS-OIG white paper, PRC Report) Furthermore, the position that correctly measuring the Postal Service’s CSRS payments by excluding obligations for time credited while not in USPS employment needs to be reexamined on its merits [...] Read more »