Friday, December 10, 2010

Here's How the Postal Service Can Get Back Its Pension and Benefits Overpayments

Those who are urging Congress to reform the Postal Service's pension and retiree-benefits overpayments would do well to drop the word “give” and instead learn a new one: “invest”.

The suspicion in Congress is that money given to the Postal Service (even if, as in these cases, it's money that rightfully belongs to USPS) would just be poured down a rathole. What Congressman will stick his neck out for something that could be mislabeled a “Postal Service bailout” if he’s afraid of having to explain in a few years why USPS is in trouble again?

Mailers can't really argue with that. We’ve seen how USPS management didn’t really get serious about reducing costs until it was faced with inflation-based priced caps.

But Congress might be able to get behind the idea of investments designed to fix the Postal Service’s financial problems. In other words, much of the pension and benefits money being returned to the Postal Service would be earmarked for solutions rather than just going into general operating funds.

Here are a few of the Postal Service investments that could be attractive to Congress:

Making It Easier To Retire
Downsizing through retirement is a major strategic initiative of the Postal Service, but almost everything USPS and the Office of Personnel Management do to potential retirees discourages them from retiring. OPM is coming to grips with the problems by transferring 40 employees to the division that handles retirements and stopping the practice of shorting new retirees' annuity payments.

Now the Postal Service needs to follow suit by offering retirement counseling (as required by federal regulations) and providing accurate and timely estimates of all pension and annuity benefits. That will require money for new (or transferred) employees and for overhauling information systems.

Incentives To Go Part-Time
The Postal Service also has a sensible goal of relying more on part-timers and temps to handle the peaks and valleys of mail volume, but it hasn't shown much evidence of a plan to reach that goal.

Why not offer bonuses to employees who agree to retire from full-time status and to be hired back as part-timers? That would entice more employees to retire by easing the financial hit they take from leaving the workforce altogether, and it would give the Postal Service an already-trained cadre of folks whose hours can be increased during peak periods. Such a program's popularity with the rank-and-file might ease the postal unions' resistance to workforce flexibility.

Replacing Delivery Vehicles 
The Postal Service's delivery fleet is so old that replacing most of the vehicles (many 20-plus years old) would be cheaper than maintaining them, according to the Office of Inspector General. But the Postal Service, which is on track to run out of money in less than a year, keeps delaying the purchase of new vehicles for lack of funds.

A fund to purchase replacement vehicles would ease the Postal Service's operating costs and almost certainly have a favorable return on investment. Many of the new vehicles are likely to be electric, which would appeal to Congressional greens and to those interested in jump-starting the country's electric-vehicle and battery industries. (And maybe some USPS charging stations could be made available to the public.)

New or Revamped Facilities
Delivery vehicles are not the only example of a short-term, cash-flow focus that discourages spending that will pay off over the long run.

The conversion of USPS's Bulk Mail Centers to Network Distribution Centers, which has apparently improved both efficiency and service, shows the potential to reduce costs with capital investments in outmoded facilities. In other cases, the Postal Service could carry out worthwhile facility consolidations if it could expand a building or start from scratch in a new one.

Venture Funds 
From selling additional items and services at post offices to using delivery vehicles for reading utility meters, various sources of new revenue for USPS have been proposed. But getting any of those ventures off the ground would require direct spending on equipment, marketing, and perhaps information, as well as the hiring or reassignment of employees.

Sometimes you have to spend money to make money.

Investment in Human Capital
Every discussion with front-line employees about working for the Postal Service seems to touch on the same topics -- abusive supervisors, ineffective managers, too many lazy or incompetent co-workers whose only skill is smooching rear ends, and some employees who are idle most of the time while others are grossly overworked. It sounds like an organization in need of better selection and training of supervisors, as well as the retraining of excess employees to move into slots where they are needed.

This list is by no means complete. I'm sure others will be able to suggest additional Postal Service investments that would have a favorable return on investment.

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M. Jamison said...

The single most important change is embodied in your last point. The fundamental institutional and management culture of the Postal Service is broken.
Too often management is willing to lie to itself in order to achieve some arbitrary measure. Virtually every measurement index, whether it be EXFC, CSM, or VOE has been tinkered with to yield "successful" answers. This may yield a satisfying picture for senior management but the end result is increasing cognitive dissonance and a work force that grows more cynical by the day.

Anonymous said...

way to many managers, and why is it that everything we do is for upper management to get a bonus.why do we have 25% retention raises for managers. they retire get hired back at 3 times the salary they retired at. fss machines don't work but that is a billion dolars.rural carriers work on evaluated time and ut seems that every count they manipulate the mail so we don't receive what we should. parcels are dropped by fed ex and ups all year except for mail count. we have too many crooks.

Anonymous said...

Just give us out flippin money back. To keep it is STEALING from us.

Anonymous said...

the bloated postal management must be seriously down sized. one management person for every six union workers is absurd. and i mean: actually firing and laying off people. actually getting rid of paychecks. not just making cuts that exist on paper only. the bloated condition ranges from small town offices to national postal HQ in wash DC. it is inappropriate for good business times let alone for the current climate

Anonymous said...

This asshole knows nothing about postal operations or its employees. They are hard working through very tough times.