|Slide from a Jan. 2015 Phase II speech|
Higher transportation expenses from Phase II of the USPS’s “Network Rationalization” effort more than wiped out the program’s savings on labor and parts, the the Postal Service told the Postal Regulatory Commission. The result was a net cost increase of $66 million.
Though they had to go back to the drawing board, postal officials have indicated they will resume Phase II later this year.
The agency loosened its service standards, mostly eliminating overnight delivery, as part of launching Phase II in January 2015. But the USPS suspended the program, including further facility closures and layoffs, after a few months amid public outcry over mail deliveries being even slower than anticipated.
|Facilities slated for closure in Phase II|
But Phase II was more complicated than Phase I because it “not only included facility consolidations, but also involved a one-time, fundamental shift in the operating window that was implemented at all mail processing sites across the entire country on the same day,” the Postal Service explained to the PRC this week.
“To implement this phase of the initiative, the Postal Service was required to realign its processing complement work schedules." Because the work at mail-processing facilities varies greatly by time of day, the schedule changes meant that thousands of employees suddenly had to learn new tasks simultaneously.
"The effects of this change in the operating window had a much greater impact on service than was anticipated, but it was a one-time event that is not likely to be replicated,” the USPS filing continued.
As a result, the USPS suspended any further consolidations “until the service could be stabilized. Those stabilizations are still ongoing, and consolidation efforts continue to be withheld.”
In other words, the Postal Service plans to move forward with Phase II but realizes it still has work to do to get ready.
- Redrawing the Map: A Look at USPS' Network Rationalization Plan
- USPS Cost Cutting Ain't Cuttin' It, Mailers Group Says
- Has USPS Targeted the Wrong Plants for Closure?