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Postal Service woes are years in the making, Georgia lawmakers seek fix

Kelly Yamanouchi, The Atlanta Journal-Constitution on

Published in News & Features

ATLANTA — Many Atlantans have grown frustrated with lengthy delays in delivery of mail and packages from the post office — and it’s a problem that rapidly worsened earlier this year amid an attempt to reform the U.S. Postal Service’s complex and troubled system.

Georgia has been ground zero for some of the worst issues. The Postal Service in February opened a new processing and distribution facility in Palmetto, southwest of Atlanta, that was supposed to be a model of the restructuring. Instead, the rollout has gone awry and worsened delivery delays.

But the Postal Service’s challenges date back much further than this year’s Palmetto facility problems.

USPS, led by pugnacious Postmaster General Louis DeJoy since 2020, has faced serious structural and financial problems for decades.

Deteriorating financial status

The Postal Service, unlike UPS and FedEx, serves every address in the country as part of its universal service mandate — even as it loses money doing so.

USPS also cannot raise its rates without approval from its 11-member Postal Service governors, and is subject to price caps in some categories. And the Postal Service notes it is self-funding, meaning it “generally receives no tax dollars for operating expenses.”

Some of its financial problems date back to the 1970s, when Congress passed legislation to make USPS responsible for increased liability for employee retirement benefits, shifting “enormous costs” onto it, according to a letter from its general counsel at the time.

“Beginning in the 1990s, USPS’s financial status deteriorated, and by the early 2000s, financial concerns about USPS had become acute,” according to an opinion issued this year by the U.S. Department of Justice on the Postal Service’s liability for those retirement benefits.

In 2006, Congress required the Postal Service to prefund its retiree health care benefits.

That move, according to the American Postal Workers Union, has been “responsible for most of the Postal Service’s net losses” since 2013.

The number of pieces of first-class mail handled has plummeted, from 103.5 billion in 2001 to roughly 46 billion in 2023.

In 2020, the Postal Service implemented several changes, which included cutting overtime and limiting post office hours, which workers said were causing massive delivery delays, according to published reports.

Moves to reform

The Postal Service in 2021 released DeJoy’s 10-year plan to work toward financial stability and improve service, called “Delivering for America.”

A key part of the effort was the Postal Service Reform Act of 2022, which removed the requirement for prefunding of retiree health care benefits, but kept the Postal Service responsible for covering the cost of premium payments when due. That sets the Postal Service apart from federal agencies, which are generally not responsible for paying those costs, according to a report from the USPS Office of Inspector General.

The 2022 act also sought to cut costs for USPS by requiring most new retirees from the Postal Service to enroll in Medicare Part B when eligible to keep their retiree health coverage, starting in 2025.

Meanwhile, the Postal Service has continued to lose billions of dollars. In the January-to-March quarter of 2024, it reported a net loss of $1.5 billion. However, that was improved from a $2.5 billion loss in the same period of 2023.

Because the Postal Service is responsible for these huge costs, those billions of dollars in losses limit the USPS in its efforts to upgrade its delivery network and technology.

USPS in its most recent quarterly financial report said: “We continue to face systemic imbalances that make our current operating model unsustainable.”

It also called for more legislation to change retiree pension benefit funding rules, “or alternatively the Postal Service will need to identify and pursue more drastic additional cost cutting and revenue initiatives” for reforms.

 

The financial report also said “continued increases in capital investment are necessary to upgrade our facilities, fleet of vehicles, and processing equipment in order to remain operationally viable.”

Problems at Palmetto

A key part of DeJoy’s reforms was a plan to consolidate sorting and delivery operations into large centrally located sorting and delivery centers.

“Our new regional processing and delivery centers — over a million square feet and also purpose-built — will enable more effective workflows that simplify the movement of all classes of mail and packages,” the USPS “Delivering for America” webpage says.

The new facility in Palmetto was supposed to be a shining example of that. About 2,000 employees were moved to the Palmetto facility from other locations, and Postal Regulatory Commission leaders toured the Palmetto distribution center before its February opening, as well as a sortation and delivery center in Athens.

“The visit to these two facilities allowed us to better understand and personally observe how the new network conceived under the Delivering for America plan is being implemented,” said Vice Chairman Thomas Day in a written statement at the time.

By mid-March, problems multiplied and on-time delivery of first class mail in the Atlanta area plummeted to 36%, according to Postal Service data.

A video obtained by Channel 2 Action News showed a sorting machine spewing packages onto the floor.

Members of Georgia’s Congressional delegation from both parties, including U.S. Sens. Jon Ossoff and Raphael Warnock and U.S. Rep. Mike Collins, have pushed for answers and improvements for months.

At a meeting with the USPS Board of Governors in May, DeJoy acknowledged the problems in Atlanta, as well as in Houston and Richmond, Virginia, where modernization work was underway.

“We apologize for these conditions and are working hard and know that we soon will be delivering the service the American people deserve,” he said.

“This massive and complex evolution includes correcting decades of haphazard decision making and neglect to our physical infrastructure and overall network,” DeJoy said.

DeJoy also last month committed to pause the changes until 2025 in order to understand their full effect on service.

This week, DeJoy in response to a query from Ossoff shared data showing first-class mail on-time delivery performance in Georgia had reached about 75% for the first week of June.

DeJoy wrote that he agrees with Ossoff’s comment that postal workers “deserve the infrastructure to help them deliver mail six and seven days a week.”

But he added that “as a result of over a decade long consequence of terrible Congressional legislation and the resulting regulation, our infrastructure and work environment in the Atlanta area has deteriorated to an embarrassing and unworkable condition.”

Ossoff issued a statement saying he’s “still hearing from Georgia families and businesses about the difficulty they continue to face sending and receiving their mail.”

“I will not rest until my constituents are well and fully served by the U.S. Postal Service,” he added.

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(Staff writer Jillian Price contributed to this article.)


©2024 The Atlanta Journal-Constitution. Visit at ajc.com. Distributed by Tribune Content Agency, LLC.

 

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