• on Jul 19th, 2013 in Labor | 47 comments

    Matching workforce to workload has been a long-term struggle for the U.S. Postal Service. In its banner years, when volume was increasing, the Postal Service often found it difficult to quickly reduce workhours to offset seasonal dips in mail volume. Over the past 6 years, as volumes have steadily declined, the Postal Service has done a better job of matching its work hours to its workload. It has its lowest number of career employees in 25 years and productivity has seen steady cumulative improvement.

    Yet finding that perfect match remains elusive. In recent years, the difficulties are evident in an increased use of overtime hours. In a recent audit report, our auditors found three districts with their highest overtime rates during the past five years, and one district where employees received the highest overtime dollars. In this latter district, the Postal Service paid seven mail handlers between $65,000 and $76,000 each for overtime workhours in FY 2012, resulting in their salaries more than doubling. Overall, overtime hours accounted for more than 7 percent of total workhours in both fiscal years (FY) 2011 and 2012. The rate is well above the Postal Service’s target rate of 5 percent. The Postal Service’s paid overtime costs have been steadily increasing the past 4 years. They totaled $3.5 billion in FY 2012 compared to $2.5 billion in FY 2009.

    The Postal Service uses overtime hours to provide flexibility and meet operational requirements without having to increase overall staffing levels. This has been a useful tool over the past few years, as the Postal Service has consolidated and closed facilities, and seen the departure of thousands of employees. Overtime usage has allowed the Postal Service to quickly adjust its workforce as it transitions to a leaner network and makes the necessary organizational changes.

    Still, the OIG found opportunities for tighter controls on overtime usage. The OIG review of the four districts determined that the Postal Service could reduce overtime usage by establishing a plan to address staffing vacancies, better aligning workforce to workload, and implementing plans that align mail arrival times with carrier schedules so carriers aren’t waiting on mail to arrive at delivery units, then spending overtime hours delivering the mail.

    Please share your thoughts on the Postal Service’s use of overtime. Is it the best tool for managing workhours during consolidations, closures, and realignments?  If not, are there better tools and approaches? What steps do you think the Postal Service could take to  minimize use of overtime pay?

  • on Jul 3rd, 2013 in Delivery & Collection | 14 comments

    “If you are generally well-equipped to deal with a zombie apocalypse, you will be prepared for a hurricane, pandemic, earthquake, or terrorist attack.”U.S. Assistant Surgeon General Ali S. Khan, Centers for Disease Control and Prevention

    Hurricanes, floods, wild fires, snowstorms, tornadoes, zombie apocalypse – you name it, the U.S. Postal Service is prepared to deliver. Part of the Postal Service’s extensive operational planning includes contingency plans to make sure mail gets delivered safely after every type of weather event, power outage, and undead uprising. Ok, maybe the Postal Service isn’t preparing for a zombie apocalypse, but its emergency preparedness plans could seemingly handle even that type of catastrophe.

    The Postal Service’s immediate priority after a storm or major weather event is the safety of its employees. Once safety issues are addressed, the prompt delivery of mail and packages to affected areas becomes the focus. The resumption of mail delivery to a disaster-affected area is often a welcome event in recovery. Citizens are frequently without power and phone service, which severely limits communications. Mail delivery allows for the exchange of information, including relief checks and government services, and can even provide a small feeling of a “return to normalcy” for citizens. Sometimes after a storm, a letter carrier is the first direct contact a citizen has with another person. Postal employees are often dealing with disasters in their own homes, yet show up faithfully for work.

    Halfway into 2013 and the year is shaping up to be an historic weather one. Winter storm Nemo, May tornadoes in Oklahoma, wild fires in Arizona, late spring snowstorms from Arkansas to Minnesota, flooding in many parts of the country, and record-breaking heat in the West all took place in just the first 6 months of this year. And hurricane season has only just started. This puts added pressure on the Postal Service to have sufficient controls in place to ensure employee safety and mitigate interruptions to service. Adding to the contingency challenge is the fact that postal facilities are often damaged in these weather events, forcing rerouting of mail and relocation of retail services. For example, the October 2012 Hurricane Sandy, which caused extensive power outages and infrastructure disruptions up and down the east coast, resulted in numerous postal facilities being damaged.

    Share with us your experiences with the Postal Service during major weather events. Could the Postal Service improve its preparation and response efforts in dealing with extreme weather to minimize disruptions? 

  • on Jun 24th, 2013 in Strategy & Public Policy | 5 comments

    The U.S. Postal Service is in the middle of a difficult transition to position itself as a 21st century communications provider. The Postal Service sees new opportunities, but its current cash shortage makes it difficult to invest in modernizing aging facilities and vehicles, or developing new products to serve changing communications and delivery needs. Public-private partnerships (PPPs) are an increasingly popular way for governments to achieve policy goals and develop infrastructure, while shifting short-term financial burdens away from taxpayers and strained government coffers. 

    Unlike a traditional procurement, in a PPP the private sector partner usually shares in the risks and benefits of the project. For example, a company could build and manage a toll road under a contract with a government transportation agency, and recoup its investment by collecting tolls. In the postal sector, a common PPP is for entrepreneurs to manage post offices. The Postal Service has entered into similar partnerships through its contract postal unit program and agreements with several retailers. Some foreign postal operators have gone further by having all or almost all of their post offices run by private partners. If the post office ends up earning less revenue than projected, the postal operator avoids being stuck with a money-losing facility.

    The Postal Service Office of Inspector (OIG) recently released a white paper entitled Public Private Partnerships: Best Practices and Opportunities for the Postal Service. The white paper recommends that the Postal Service consider opportunities for new PPPs to generate cash, reduce costs, make spending flexible so it varies along with volume, and leverage private sector expertise in developing new products for the digital age.

    This white paper reviews lessons learned from PPPs in the international postal sector and from nonpostal U.S. government agencies. Despite PPP’s potential benefits, government agencies should perform careful analysis before entering into one, as they usually involve higher long-term project finance costs in exchange for increased flexibility and risk-sharing. Over the years, government agencies have developed a set of best practices to ensure that a PPP is a good deal for the public. One common lesson is that there are significant benefits to creating a central office to facilitate PPPs, coordinate with private entities, and to collect and share best practices throughout an agency.

    Do you think these types of partnerships would benefit the Postal Service? From your experience and observations, which partnerships have been helpful to the Postal Service and its customers? What specific opportunities exist for additional partnerships between the Postal Service and the private sector? Are there any downsides to such partnerships? 

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