USPS urges regulators to speed up review of network cutbacks

The US Postal Service has urged regulators to speed up their assessment of its plans to slow down its First Class Mail service by a day in order to reduce the size of its processing network by more than 50%. USPS filed a request yesterday with the Postal Regulatory Commission in which it was concerned the current schedule for the regulators to produce an advisory opinion on the plans would take until at least July 10.

It wants the Commission to issue its opinion by mid-April instead.

The Postal Service is losing as much as a billion dollars per month this year, thanks to its pension and benefit funding difficulties and the fact its processing network is designed to handle a much larger volume of mail than the current dwindling total.

Its Network Optimisation plan seeks to cut the 461 processing plants in the network down to less than 200 by 2013. To do so, First Class Mail would go from a one-to-three day service for the continental States to a two-to-three day service, losing overnight delivery for mail unless it is dropped in bulk at the point of processing.

The long-term aim of the changes is to run a more predictable, reliable service rather than prioritising rapid delivery of First Class Mail.

The Postal Service, which requested the Commission’s opinion on its service standard changes on December 5, made a voluntary agreement with US Senators the following week, committing to hold off on planned mail plant and post office closures until May 15 to allow time for postal reform legislation to pass. The moratorium does not prevent the continuing review of facilities for possible closure, which is expected to be completed early February.

Opinion

While the Postal Regulatory Commission does not have the power to refuse USPS plans to restructure its network, it is required to assess changes that will affect nationwide services, and its opinion can influence the final shape of the plans.

Importantly, the loss-making USPS is obligated to wait for the Commission’s advisory opinion before it can implement the process, a process the regulators state would take 217 days, and that is assuming no surrebuttal testimony is received.

USPS said it would need to have the opinion “well before May 15” in order to quickly swing its plans into action following the end of the self-imposed moratorium.

In a statement commenting on the need to speed up the Commission’s assessment, USPS said yesterday: “The Postal Service believes that more than four months, from December 5, 2011, to mid-April 2012, is adequate time for the PRC to evaluate and comment on these proposed operational changes.”

The Commission is intending to take written and verbal testimony in its assessment of the USPS plans, including at public hearings.

In issuing its schedule for the process last week, the Commission said it had “carefully” balanced the needs of USPS to expedite proceedings and the rights of stakeholders to comment on the “complex” proposals.

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