Layers of Redundant Management Have Been Eliminated, USPS Says

The U.S. Postal Service's public relations department responded last night to a recent Dead Tree Edition article. We are publishing the response in its entirety, without comment, except to note that article was based on a combination of verifiable facts and readers' opinions. We also note that many postal employees -- supervisors and "suits" as well as worker bees -- have complained vociferously about USPS's organizational structure. And that a significant overhaul of that structure would probably face legal hurdles.


To Dead Tree Edition

Your recent blog post, 17 More Ways USPS Is Not Like a Real Business, provides some good examples of how the Postal Service’s inflexible and outdated business model hinders our ability to compete in today’s marketplace and why there is an urgent need for passage of comprehensive postal reform legislation. We would, however, like to debunk a few myths in your list.

First, the claim that the Postal Service has “many layers of redundant management” and bureaucracy, is not true. In FY 2000, the Postal Service had 74,877 PCES [Postal Career Executive Service] and EAS [Executive and Administrative Schedule] employees. At the end of FY 2013, we only had 54,473. We have also reduced the number of Areas and Districts significantly, going from 10 Areas and over 100 District offices to 7 Areas and 74 Districts.

Regarding the item about electrical safety hazards, employee safety has always been a top priority of the Postal Service. Under terms of a recent settlement with OSHA, the Postal Service has agreed to modify its Electrical Work Plan Management Instruction and Maintenance Management Order so that significant amounts of personal protective equipment are purchased and significant hours of electrical safety training are administered. These changes are being phased in over a two-year period. We will be investing more than $5 million for 123,000 hours of training for nearly 20,000 maintenance employees. We also have distributed more than $2 million in protective safety gear.

As for the safety of our vehicle fleet, the Postal Service maintains a very stringent vehicle inspection program that requires a minimum of two comprehensive inspections performed each year. Inspections are performed by both contractors and USPS maintenance facilities.

The Postal Service operates under the laws that apply to it and does have the power to exercise eminent domain in the name of the United States. The courts, including the Supreme Court, have cited that power as evidence of how we are a government entity.

The Postal Service continues to take the responsible actions needed as outlined in our Five-Year Business Plan to return the organization to long-term financial stability. We need Congress to do its part by passing the legislative requirements in our plan so that the Postal Service can operate more like a “real business” and provide the mail and package service our customers expect and deserve for decades to come.

Sincerely,
Corporate Communications
U.S. Postal Service


Related articles:

• USPS Responds To Criticism of Its Annuity Estimates 
• USPS Has Too Many Supervisors And Too Many Employees, Congressman Says   
• Postal Service Has Too Many Employees and Pays Them Too Much, Mailer Groups Say

 

Viagra in a Printing Plant? What's Up with That?

A TV ad for Viagra that features a printing plant has been getting plenty of air time during World Series broadcasts – and stirring up lots of questions.

What exactly is Viagra trying to tell us – that the printing industry is inhabited mostly by old guys who, how shall we say, suffer from slow makereadies? Is the ad making a subtle reference to the industry’s limp profits in this age of digital media and online bill payment.

The ad takes place at the “K.L. Printing” plant, with the focus on a guy running a Heidelberg sheetfed press. He’s your typical star of an erectile dysfunction ad – a slightly over-the hill guy with a gleam in his eye and a bit of a lone-wolf swagger. And played by an actor who probably doesn’t know his fountain solution from a fountain soda.

Why show a printing plant rather than a more generic-looking factory?

And here's the real mystery: What is it about being a pressman that causes our handsome-but-not-too-handsome star to need Viagra? Dead Tree Edition hopes to clear up this mystery by offering a few theories (with some explanatory links for those of you who aren't printing geeks):

• He needed more bulk and stiffness in his sheets. 
• The plant had produced a mail piece that had failed the Postal Service’s droop test. 
• The excitement had gone out of K.L. ever since they fired the strippers – when the prepress department went all digital. 
• His butt roll got caught in a tail clamp, though I’m not exactly sure how taking Viagra would solve that problem.
• The press’s low-rub ink was rubbing him the wrong way. 
• Maybe it had something to do with blow-ins, but I’ll leave it at that. 

So what’s your theory?

Related articles:

• 12 Telltale Signs That You Are A Printing Geek   
• Superstorm Sandy's Seven Lessons About Print Media 
• Here's Why We Avoid Four-Color Body Type

17 More Ways USPS Is Not Like a Real Business

Please see the U.S. Postal Service's response to this article, Layers of Redundant Management Have Been Eliminated, USPS Says.

The recent article Nine Ways the Postal Service Is Not Like a Real Business apparently struck a chord, or maybe a nerve, generating numerous insightful comments on this blog, various LinkedIn groups, and private emails.

Though the U.S. Postal Service must live off of the revenue it generates rather than on government appropriations, it differs fundamentally from private enterprises in numerous ways. Those distinctions are more than just an interesting point of discussion. They are a key to understanding the Postal Service and how it might be reformed.

So, with thanks to many Dead Tree Edition readers, here are xxx more ways the USPS is not like a real business:

1. The concept of “investment” is nearly absent from the Postal Service, which must live from one annual budget to the next. It is not able to access private capital markets, such as the bond market, to finance major capital investments. That prevents it from making investments that would probably pay off in the long run, such as replacement of its aging, inefficient delivery fleet and more of the kind of automation that has enabled it to increase labor productivity.
2. Similarly, the Postal Service is hamstrung when it comes to launching new products that are not immediately profitable. 
3. The Postal Service does enjoy low interest rates on its debt because it can borrow from the federal government. But it has reached the legal limit of its ability to borrow. And much of its debt was racked up to cover subsidies to the federal budget that were dressed up as prepaid retiree health benefits and pension-fund payments. 
4. “Real businesses are not required to invest ALL their pension assets in low interest government bonds but instead can choose to invest then in a balanced portfolio,” noted one anonymous commenter. “The difference in average returns on pension assets of the USPS and the average returns of a typical businesses pension assets amount to over $10 billion per year.” 
5. “They are forced to deliver to unprofitable addresses,” notes Mike Seethaler, president of Raintree Graphics in Jacksonville, FL. “If a customer is too far out and too small for us to make a profit, we don’t do business with them.” In contrast, one commenter noted, USPS “is mandated to serve all areas of the country, every address, every day.” 
6. Speaking of unprofitable customers, USPS can’t charge higher prices for customers who are expensive to serve. People who get front-door delivery pay no more than those who receive their mail curbside or in cluster boxes. When USPS has to rely on airplanes, boats, or donkeys to get mail to remote places, it can’t charge a premium for those services. And it costs you 46 cents to send a letter from Maine to Alaska, or to send it across town. 
7. “Real businesses report long term liabilities, like retiree health benefit liability, on their balance sheet, and only report them as an expense when money is set aside to fund the liability,” wrote Liam Skye. “USPS is the only organization that is required by law to report fixed amounts of the liability as expense, whether they put the money aside to fund the liability or not!” 
8. Unlike most postal agencies around the world, the U.S. Postal Service is legally restricted from straying outside of its core business of offering postal services. And even its delivery-related ventures can run into problems if they compete with private businesses. “Consider the fact that USPS came up with the concept of overnight mail first,” says R.E. Perry. “It made so much money for the service that USPS bought a bankrupt airline rather than continue to pay other carriers to provide that service. Complaints that private companies could be making this money led to Congress ordering the service to sell the airline, and return to paying others to move their mail.” 
9. The Postal Service is subject to a regulatory agency, the Postal Regulatory Commission, that has no authority over USPS’s private-sector competitors. 
10. “Another way USPS is not like a business: It is mandated by the Constitution of the United States,” wrote Kofi M. G. W. Opantiri. (Technically speaking, the Constitution authorizes but does not require Congress “to establish Post Offices.”) 
11. It is exempt from income, sales, and real estate taxes. On the other hand, USPS is not eligible for the kind of tax breaks that incent private businesses to expand and to become more energy efficient. 
12. “Real businesses don't have two private police agencies who have to enforce thousands of federal rules and regulation WITHOUT reimbursement,” noted one commenter. 
13. By law, postal workers cannot strike. But impasses in labor-management negotiations at the Postal Service lead to an unusual step – binding arbitration. 
14. Private businesses are not subject to the Freedom of Information Act. But nor do they have the power of eminent domain, exemption from many state and local laws, and some protections from being sued. “USPS considers itself above the law,” wrote “a lady veteran.” “Some of their trucks should never be on the road.” 
15. “Not even Wal-Mart risks electrocuting its employees,” tweeted Dave Berdych, alias Dry Mail Man, referring to OSHA’s four-year investigation of electrical safety hazards in numerous postal plants. 
16. ‏ “No real business would have this many layers of redundant management. (bureaucracy),” responded one reader, echoing a complaint often heard from postal workers. 
17.  “Real business management incompetence is usually dealt with a demotion or termination,” wrote another. “Postal incompetence is rewarded with a promotion.” 

USPS Responds To Criticism of Its Annuity Estimates

For the first time I can remember, the U.S. Postal Service issued a formal response today to a Dead Tree Edition article, USPS Comes Up With Yet Another Way to Discourage Early Retirement. The response was submitted as a comment on that article, but I think it deserves to be called out as a separate article. I won't comment on the response, except to say that I'm glad USPS is apparently taking seriously the need for accurate FERS annuity estimates.

According to OPM’s audit results, the U.S. Postal Service leads all agencies in retirement application accuracy with a score of 97% for its August 2013 submissions.

Through our partnership with OPM Retirement and the National Personnel Records Center, the Postal Service has worked diligently to provide accurate and timely information, which reduced the backlog at OPM from a 7- to 10-month delay to currently 30 days or less before retirees are placed in interim payment status.

The Postal Service recently sent offers to approximately 16,000 Voluntary Early Retirement (VER) eligible employees; twelve employees reported receiving blank annuity estimates due to a processing issue. These employees were immediately provided a revised annuity estimate.

The Postal Service provides its employees with annuity estimates that display the estimated annuity amount for employees with and without a survivor annuity. It also provides the following information listed below on its annuity estimate:

• Retirement eligibility date 
• Annuity computation date 
• High-3 average salary 
• Total actual service 
• Accrued sick leave credit
• 50% for FERS retirements effective through 12/31/2013 
• 100% for FERS retirements effective on or after 01/01/2014 
• 100% for all CSRS retirements 
• Annual leave earned balance 
• Terminal leave payment 
• Cost of life insurance and FEHB coverage in retirement

The annuity estimate is based on up-to-date individual employee data and a comprehensive, validated service history for each employee, determined according to CSRS and FERS regulations. The service history identifies not only Postal Service service but also periods of military and prior civilian service and whether those periods of service are creditable for retirement eligibility and/or annuity computation.

OPM has validated Postal Service results as highly accurate as compared to actual OPM annuity determinations. The process is continually updated to reflect changes in retirement regulations; for example, estimates reflect the creditability of sick leave for the FERS annuity computation and the ability to make FERS redeposits.

The Postal Service does not provide annuity estimates for the FERS Special Retirement Supplement at this time -- the FERS Special Retirement Supplement is based on an OPM calculation of FERS service as a portion of 40 years of estimated Social Security earnings -- but we are currently working with our Supply Management office to find suppliers capable of leveraging their retirement software applications with our retirement applications to provide an estimated numeric value of the Special Retirement Supplement amount. We anticipate that this project will be completed this fiscal year. In the meantime, the Postal Service does provide a formula on the annuity estimate that shows the employee how to calculate the estimated amount of the Special Retirement Supplement using their own Social Security earnings.

We greatly value the service of all our employees, and we endeavor to do everything we can to contribute to a rewarding retirement.