The United States Postal Service (USPS) has had another grim few years — despite the fact that Postmaster General Louis DeJoy’s 10-year Delivering for America (DFA) plan was supposed to turn things around. However, according to recent reports, much of what the DFA has delivered to date appears to be a far cry from the reversal of fortunes it was touted to enable. But DeJoy has persistently pushed back against critics, citing the need for patience in the midst of major and long-term change. And while the progress reports on the USPS website reflect a positive tone — a series of recent audits paint a picture of a Postal Service that continues to fall behind.
What is Delivering for America?
Published on March 23, 2021, the USPS says its Delivering for America plan is “guiding the transformation of the United States Postal Service from an organization in financial and operational crisis to one that is self-sustaining and high performing.”
The USPS says DFA “establishes clear strategies to quickly achieve financial sustainability and service excellence,” with an aim to “reverse a projected $160 billion in losses over 10 years by achieving break-even operating performance while improving the reliability and predictability of service.”
The organization says its plan will deliver:
- A modernized Postal Service capable of providing world-class service reliability at affordable prices
- Maintenance of universal six-day mail delivery and expanded seven-day package delivery reach
- Workforce stability and investment strategies that empower, equip and engage each employee and put them in the best possible position to succeed
- Innovation that grows revenue and meets changing marketplace needs
- Financial sustainability to fulfill our universal service mission
According to a 2021 DFA overview, prior to the plan’s implementation, the USPS was in “crisis.”
“The Postal Service has recorded $87 billion in financial losses over the last 14 years and failed to meet service standards,” the overview said. “Our business and operating models are unsustainable and out of step with the changing needs of the nation and our customers. Years of chronic underinvestment in our infrastructure and network have taken its toll on our performance and workforce.”
In this context, problems the plan aims to address include:
- Hastened shift in demand away from mail to packages
- Misaligned mail and package processing operations
- Underperforming air and surface transportation network
- Unattainable First-Class Mail service standards
- Prolonged underinvestment in retail and delivery network
- Misaligned and redundant organizational design
- High turnover rate within our non-career employee workforce
- Long-overdue pricing regulation changes from the PRC
- Onerous legislative and administrative mandates
Referring to the list of problems as “extremely serious,” the USPS said it was still optimistic about the organization’s future.
“Our plan establishes clear strategies to quickly achieve financial stability and service excellence,” according to the overview. “Our plan will generate enough revenue to cover our operating costs, enable investments in our people, infrastructure and technology, and simultaneously provide our customers and the American people with the excellent service they expect and deserve. By implementing the totality of the strategies identified in the Delivering for America ten-year plan – and doing so in a timely manner – we will operate with a positive net income beginning in FY2023 or FY2024 and reverse a projected $160 billion in losses over the next ten years.”
While all of that sounds good in theory, recent audits tell a different story.
USPS and the Postal Regulatory Commission (PRC)
As an arm of the federal government, the USPS is subject to oversight by the Postal Regulatory Commission (PRC). In addition to the four operating offices into which the Commission is organized, the USPS Office of Inspector General (OIG) also operates under its authority. The USPS OIG “conducts, supervises, and coordinates audits and investigations relating to the programs and operations of the Commission, and identifies and reports fraud and abuse in Commission programs and operations.”
Just since the beginning of 2024, findings of several USPS OIG audits have reflected some of the apparent struggles within DFA. To learn more, please see the “What We Found” sections within the following reports:
- State of the U.S. Postal Service’s Financial Condition (6/21/2024)
- Accuracy of Reported Service Performance (6/24/2024)
- Fleet Modernization – Electric Vehicle & Charging Infrastructure Incentives (6/27/2024)
- Effectiveness of Package Shipping Services (7/12/2024)
- Fleet Modernization – Charging Station Construction Design and Deployment Timelines (7/16/2024)
- Election Mail Readiness for the 2024 General Election (7/30/2024)
Concerns from the PRC
Since the beginning of the year, the PRC has issued a series of orders regarding the DFA, some related to concerns raised in the OIG findings. The following announcements provide more detail.
PRC Directs USPS to Provide its Justification for Not Requesting an Advisory Opinion on Certain Initiatives Associated with its DFA Plan (4/26/2024)
Noting that although “the DFA Plan is not in and of itself a change requiring an advisory opinion,” the PRC said “specific initiatives” within the DFA could “require a request for an advisory opinion.” As a result, on the day of the announcement, the PRC issued Order No. 7061 “directing the Postal Service to either show cause within 20 days of the Commission’s order as to why an advisory opinion is not warranted for the recent initiatives being implemented under its Delivering for America Plan (DFA), or else file a request for an advisory opinion within 40 days of the order.”
The USPS has “introduced and begun implementing new DFA initiatives, including an overhaul of its processing and delivery network, local transportation optimization, and logistics career insourcing,” the PRC said, noting a correlation between the changes being made and service problems in related areas. Nationwide, the PRC said USPS service performance has been on the decline.
“As the Commission issues this show cause order, we don’t have firm proof of what is causing the recent decline in service performance,” Commission Chairman Michael Kubayanda said. “I think the American public, postal stakeholders, and Congress want to understand the impact of the Postal Service’s network transformation plans. They want to know what is happening to mail service, how to stop this decline, how to keep it from spreading, and how to restore service to targeted levels of performance. Those are the questions the Commission is looking to answer with this order.”
Postal Regulatory Commission Continues to Probe DFA (6/17/2024)
As part of its public inquiry into the DFA, the PRC said it needs more information about “continued large-scale network changes” being made by the USPS, despite an announced “pause” in implementing parts of the DFA plan. In addition to other issues, the PRC also wants to know more about the projected 10-year losses of $65 billion under DFA that were recently announced.
The month prior (on May 20), the Postmaster General issued a letter to the Chairman of the Senate Homeland Security and Governmental Affairs Committee, Senator Gary Peters, indicating that despite separately announcing a “pause” in plans to consolidate some facilities, the Postal Service “would move forward with network changes in dozens of locations around the country.”
The announcement notes that law requires the Postal Service to request an Advisory Opinion on “changes that will impact service on a nationwide or substantially nationwide basis,” which is why the PRC is urging that an Advisory Opinion be requested regarding “certain DFA initiatives.”
“Emerging circumstances and information have reinforced the urgency and importance of understanding the impacts and regulatory implications of DFA before the Postal Service makes further changes that impact service,” Commission Chairman Michael Kubayanda said in the announcement — which also noted that national service performance in 2024 has been at “historic lows.”
PRC Releases Report Analyzing Postal Service’s FY 2023 Finances (6/17/2024)
In its recent Financial Analysis report for Fiscal Year (FY) 2023, the PRC revealed some grim trends, saying that overall, the Postal Service’s financial condition “continues to worsen.”
“In FY 2023, the Postal Service recorded a net operating loss of $2.3 billion — an increase of $1.8 billion over the previous year,” the PRC said. “When non-operating expenses are included, the overall net loss increases to $6.5 billion.”
Additional highlights from the report include:
- Total Factor Productivity, a measure of Postal Service efficiency, saw the largest decrease (4 percent) since it was first calculated in 1965.
- Total mail volume decreased by 8.7 percent, including a 2.0 percent decrease in the volume of Competitive products.
- Revenue from Competitive products increased by $0.2 billion.
- Despite rate increases, Market Dominant revenue decreased by $0.4 billion.
- Total operating expenses were $2.1 billion higher than the previous year.
- The Postal Service recorded total assets of $45.3 billion and total liabilities of $68.4 billion at the end of FY 2023.
Postal Regulator Releases Report Evaluating USPS FY 2023 Performance Report and FY 2024 Performance Plan (7/2/2024)
In early July, the PRC issued its analysis of the United States Postal Service Fiscal Year (FY) 2023 Annual Performance Report and FY 2024 Performance Plan — which included a review of the Postal Service’s four performance goals:
- High-quality service — which measures on-time delivery of mail and packages
- Excellent customer experience — which measures customer satisfaction
- Safe workplace and engaged workforce
- Financial health
While the Postal Service partially met performance indicators for the first two, the PRC said it didn’t meet any for the last two. As a result, “Overall, in FY 2023, the Postal Service did not meet any of its performance goals,” the PRC said.
PRC Questions the Reliability of USPS Service Performance Measurement System (7/2/2024)
On July 2, the PRC issued a notice that it had “opened an inquiry into the Postal Service’s internal Service Performance Measurement (SPM) system for Market Dominant mail products” to address “concerns that the SPM may not accurately represent customer experience in the current environment.”
The PRC said it plans to conduct a careful examination of “how measurements reported by the SPM are derived and whether the SPM is currently producing accurate, reliable, and representative results as the law requires,” noting that if the review reveals that’s not the case, it would “identify changes to the SPM to align it with legal requirements.”
If such changes are “impractical,” the PRC said it may consider whether it would be feasible to require the USPS to return to an external service performance measurement system — which was the measurement framework prior to 2018, when the SPM was adopted.
“The Commission’s Order No. 7247 along with information on how the public can participate in these proceedings may be found here,” the PRC said.
For more about related dynamics, see:
- New bill would place restrictions on DeJoy’s USPS reform efforts (Government Executive, May 3, 2024)
- With pressure mounting, DeJoy agrees to pause consolidations at dozens of USPS facilities (Government Executive, May 14, 2024)
- USPS provides update on historic modernization efforts (USPS, May 21, 2024)
- Lawmakers are asking the USPS regulator to block DeJoy’s latest price hikes (Government Executive, May 23, 2024)
- In spending bill, House Republicans are ‘deeply concerned’ with DeJoy’s USPS reform plans (Government Executive, 6/14/2024)
- USPS says consolidator changes won’t hurt service. Stakeholders aren’t sold. (Supply Chain Dive, 6/18/2024)
- State election directors fear the Postal Service can’t handle expected crush of mail-in ballots (Associated Press, 7/23/2024)
- USPS regulator says ‘no more important time’ for stronger oversight of agency’s sweeping changes (Federal News Network, July 25, 2024)
