Postal regulators in the United States have rejected a union complaint against the US Postal Service for going ahead with planned plant closures this summer before the plans were publicly reviewed.
The American Postal Workers Union filed its complaint back in June, suggesting that the Postal Service should not have been able to bring in new mail service standards – to enable the shutting of 48 mail processing plants in July and August 2012 – before receiving an Advisory Opinion from the Postal Regulatory Commission.
The union also said USPS did not submit its plans with a reasonable amount of notice before they were to take effect on 1st July.
This week the Commission dismissed the complaint, stating that the Postal Service only had to seek an Advisory Opinion prior to making service changes that would affect national service levels – it could go ahead with the changes before the Opinion was completed.
USPS is currently in the process of closing around 140 mail processing plants, under a plan to remove some of its excess processing capacity in the light of the 25% fall in mail volumes over the past six years, to help cut network operating costs by $1.2bn a year.
Alongside the closures, changes to mail services have seen First Class Mail provided as an overnight service only where deliveries are local to a processing plant, changing to a two-to-three day service elsewhere.
Plant closures have been suspended from this month through to December to prevent problems with voting-by-mail during the upcoming elections and because this is the peak delivery season for the Postal Service. But, a further 92 plants are set to be closed in January and February 2013.
US postal law requires USPS to apply for a regulatory review when planning changes to its services that would have a nationwide affect. Although a resulting Advisory Opinion from the Postal Regulatory Commission is not binding on USPS, in practice it can help improve USPS plans with the addition of stakeholder comments through the hearings involved in the review.
USPS asked the Commission for an Advisory Opinion on its plant closure plan in December 2011, but issued a revision to its plan in May 2012, which clarified the timing of planned plant closures.
The Commission is yet to issue its Opinion on the processing network “optimisation” plan, and in its complaint filed in June, the APWU said the closures should not be able to go ahead before the Opinion was produced. The union also argued that an entirely new Advisory Opinion process should be launched given the revision to the closure plan proposed in May 2012.
The regulatory panel of five Commissioners decided that USPS was correct that it only needed to request an Advisory Opinion to go ahead with its planned changes, not receive a completed Opinion.
“The Postal Service’s longstanding practice of awaiting a Commission opinion prior to implementation appears to have served its interests and those of the larger postal community well. However, this practice has been voluntary and is not mandated by law or regulations,” ruled the Commission.
Regarding the union view that the revision to USPS plans required an entirely new Advisory Opinion process, the regulators said they saw the USPS proposal on May 2012 as merely a phased implementation of the consolidation process proposed back in December 2011.
Ultimately, the Commission concluded that the union’s complaint “fails to raise any material issues of fact or law”.
The ruling followed the refusal by the Commission at the end of June 2012 to grant the American Postal Workers Union a stay preventing the mail plant closures until the union complaint was decided.
USPS executives have said this summer that the closures have gone relatively smoothly, with only a small number of unexpected problems arising.
The Postal Service has made a $13.5bn loss so far in the first 10 months of its fiscal year, up to the end of July 2012, although only $1.63bn of that loss has come from operations, with much of the remaining losses stemming from obligations to pre-fund future healthcare liabilities for retirees.