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The Post Office knock-on effect

A U.S. Postal Service customer leaves the Bayview Station on July 26, 2011 in San Francisco, Calif.

Jeremy Hobson: Now to the troubles at the cash-strapped U.S. Postal Service. As it tries to cut its costs it's also asking its outside contractors to cut. The Postal Service spends $15 billion a year with contractors and it wants to bring that number down
by a billion.

Marketplace's David Gura reports now from Washington.


David Gura: The U.S. Postal Service has outsourced for a long time.

David Hendel: Probably since the Pony Express.

That's David Hendel, a lawyer with Husch Blackwell.

Hendel: Mail that goes any kind of a distance at all has been contracted out from time immemorial.

To some familiar companies, making hundreds of millions of dollars, every year: FedEx and United Airlines, Northrop Grumman and IBM. Some of them transport mail. Others help it track and sort it. Hendel says some of those contracts may not be renewed.

Hendel: As the Postal Service contracts, it's buying less of everything.

And it's asking companies to consider lowering rates, to cut costs where they can. The Postal Service is asking for sympathy. But Hendel says the USPS will always rely on contractors. It's cheaper, and it doesn't have to worry about retirement or health care benefits.

In Washington, I'm David Gura for Marketplace.

About the author

David Gura is a reporter for Marketplace, based in the Washington, D.C. bureau.
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As a former USPS employee I can truthfully claim mis-management and self-serving practices by middle-level managers and supervisors are at the root of most of their problems.

A sorting machine mechanic develops an improvement which eliminates the need to replace several thousand of a particular part (costing $20/ea) at a cost of $0.45. Management approves of his dedication - but then 'advises' the mechanic that IF this idea IS approved they'll charge him for the cost of installing it in every sorting machine across the country. Result? The mechanic withdraws his suggestion.

A postal Electronic Technician notes the vast majority of 1st class mail (aka 'letters') rejected by OCR sorting machines (Optical Character Reader) have colored envelopes. He suggests contracting a company specializing in machines which can discern black type from colored backgrounds - making possible reading any typed address on colored envelopes. Management's response? "Don't rock the boat"

Another tech suggests enabling non-business customers to bar-code their mail pieces to gain the same lower price as BBR (Business Bulk Rate) mailers. Management's response? "Just do you job and keep you mouth shut. People HAVE been known to get hurt around here ya know?"

Providing the means to bar-code one's own mail at conveinient locations would enable customers to pay less while enabling the USPS to greatly accelerate sorting operations - further reducing costs.

[BTW: Postal supervisors HAVE been known to order employees into dangerous situations - putting their lives at-risk in machinery which is running and when said employees become injured - calling for an ambulance ONLY after said employee's time card is punched out (accident happening OFF the clock).]

Taking that last suggestion higher up to the Postmaster General the response is a more benighn "If you submit an unsolicited proposal (aka 'suggestion') - it becomes the property of the Postal Service which can take it for it's own use (or pigeon-hole it) without compensation to the submittor".

USPS management at headquarters either has no idea what is going on OR doesn't care. There are a lot of intelligent, dedicated people in the USPS who have great ideas for improving service while cutting costs but one of the deciding factors in management's promotion scheme is 'the number of employees you supervise'. Thus no supervisor or manager will entertain adopting any technology or practice which could reduce the number of people under his/her supervision lest he/she lose points towards promotion.

One machine could sort 100,000 pieces of mail per hour with only 3 people attending it. Another machine has 19 people and only sorts 30,000 pieces per hour. So which machine do managers prefer - the latter due to the higher number of employees (ie: promotion potential).

Supervisors send sorting systems maintenance employees to training classes in Norman OK. Employees who maintain the status quo are given 'training manuals' (containing answers to test/exam questions) while those who 'rock the boat' are denied these manuals AND denied the required training at their home station. Then Postal managers posing as EEOC investigators hold phony investigations into allegations of abuse and rule in-favor of management.

Is it any wonder some Postal workers resorted to violence?

Try going to work each day (as a black person) in a facility where management allows white employees to hang nooses and racist posters.

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