Regulator expresses concern over changes to US Standard Mail

Post & Parcel

March 27, 2014

The US postal regulator has said the US Postal Service’s plan to change Standard Mail service from a three-day to a four-day service needs “further development”.

USPS issued notice back in December that it intended to change its Standard Mail service for items collected on Fridays and Saturdays into a four-day service. Items collected on other days would keep a three-day service.

The change is being brought in next month so that the Postal Service can even out the volume of its mail between different days of the week.

At the moment, Standard Mail collected on Fridays and Saturdays all has to be delivered on Mondays to meet the three-day standard — leading to a very busy Monday.

The new plan would see Friday’s Standard Mail delivered on a Tuesday, and Saturday’s volume delivered on a Wednesday.

The Postal Service believes the “Load Leveling Plan” would help it cut down on its use of costly overtime and improve service efficiency. Tests were carried out at its South Jersey Processing & Distribution Center just across the river from Philadelphia.

The Postal Regulatory Commission issued an Advisory Opinion on the plan yesterday, in which they stated that “limited testing” of the load leveling process meant that it was “inconclusive” how the plan would impact service levels across the country.

“The Commission finds the Postal Service’s initial assessment and identification of potential benefits shows some promise, but cautions this evaluation is based on limited test information and sometimes anecdotal accounts,” the regulator concluded.

“The Commission urges the Postal Service to undertake a more rigorous cost-benefit analysis, additional field testing and service performance analysis, and volume impact studies before committing to a nationwide rollout of the Load Leveling Plan.”

Industry support

The Commission’s Advisory Opinion is a non-binding assessment of the USPS plan, so the Postal Service does not have to comply with its recommendations before enacting the changes. However, the regulator, whose five Commissioners are appointed by the US President and Congress, are supposed to influence USPS service changes.

In its judgement on the Load Leveling Plan, the Commission also expressed concerns that the Postal Service did not have sufficient support within the mailing community for its plan.

It said a group of 18 different companies, who are all members of the Postal Service’s industry liaison group, the Mailers Technical Advisory Committee (MTAC), were unable to come to a consensus that the Load Leveling Plan was the appropriate solution to smooth out the workloads across the days of the week.

The Advisory Opinion said USPS needed to obtain a clearer understanding of mailers’ questions and concerns.

“The absence of significant support is an indication that the Postal Service may not provide the level of service desired by its customers, and thus may negatively affect mail volumes,” the Commission warned.

“Less than optimal”

Comments from the catalogue publishing industry filed with the regulator during its review process supported the view that USPS had “engaged in less than optimal outreach” with mailers regarding the Load Leveling Plan, and had treated the plan as a certainty “despite limited tests” being carried out.

“More work is required to understand the impact of load leveling,” said the American Catalog Mailers Association, adding that the Postal Service should only roll out changes after additional changes.

The American Postal Workers Union, which sees the plan as another service reduction at USPS “without a corresponding benefit to mailers”, criticised the Postal Service for a lack of cost analysis. The union also suggested that some mailers might switch the day of the week on which they drop off Standard Mail items in order to keep their current delivery day.

“If mailers’ comments are any indication, mailing habits may change to preserve target in-home delivery dates, which would obviate many of the benefits of the proposal,” the union said.