DeJoy agrees to pause some USPS facility changes until 2025

Postmaster General Louis DeJoy says USPS will pause plans to move of mail processing operations at facilities across the country until January 2025.

The Postal Service is putting an early step in its network modernization plan on hold, after a bipartisan group of senators told the agency to slow down implementation.

Postmaster General Louis DeJoy told Sen. Gary Peters (D-Mich.) in a letter last week that USPS will pause plans to move mail processing operations at facilities across the country.

Nearly 60 USPS facilities — out of 427 — have initiated Mail Processing Facility Reviews to determine whether the agency should move some of its mail processing operations to larger regional hubs.

DeJoy told Peters USPS will put these changes on hold “at least” until Jan. 1, 2025.

“Even then, we will not advance these efforts without advising you of our plans to do so, and then only at a moderated pace of implementation,” DeJoy wrote in a May 9 letter.

Peters said in a statement Monday that he appreciated DeJoy’s decision to pause these changes, but also called on USPS to roll back recent transportation changes in Michigan, “until we have more information about their effects.”

“I will continue to push for a comprehensive study by the Postal Regulatory Commission to ensure any changes implemented do not impact mail delivery,” Peters said. “It’s absolutely critical that we understand the full scope of these changes, as well as their impact on service and communities, before moving forward.”

Last week, a bipartisan group of 26 senators, co-led by Peters, called on USPS to “pause all changes” under its network modernization plan, until an independent regulator can weigh the merits of the plan.

DeJoy, at a public meeting of the USPS Board of Governors last week, conceded USPS is “failing to meet service expectations” in Atlanta, Houston and Richmond, Virginia — places where the agency has opened its first large mail processing hubs to consolidate local operations.

DeJoy told Peters in his letter that USPS “will continue to work hard to restore service in those areas impacted.” He added that these USPS plans are “important elements of achieving a network that can provide greater service reliability in a cost-effective manner.”

USPS expects more centralized mail processing would allow it to make better use of its space, staffing, processing equipment and transportation resources.

The agency says the review process won’t result in facility closures or career employee layoffs. In many cases, USPS plans to revamp impacted facilities and turn them into Local Processing Centers.

At some of these facilities, however, USPS expects to see a net loss of some employees and management positions.

“The Postal Service is a responsible employer and will be working closely with management associations to work through this initiative. The Postal Service will follow requirements of the collective bargaining agreements where they apply and all applicable policies,” the agency wrote in its final decision for some of these reviews.

DeJoy wrote in his letter that, “with only one or two exceptions,” USPS has not implemented its proposed actions under the Mail Processing Facility Reviews “and future plans to do so have not yet commenced.”

“The career workforce will not see layoffs, new equipment will be installed, the facilities will not close, deferred maintenance will be performed, and working conditions will be substantially improved,” DeJoy said. “I acknowledge that we have not been able to convince Congress of this, even though these efforts will improve the facilities and facilitate the significant cost reductions that we absolutely must achieve to have any hope of financial sustainability.”

Prior to last week’s letter, lawmakers tried to include language in the fiscal 2024 spending deal that would have blocked these USPS changes. Others introduced a standalone bill that would have blocked USPS from conducting its Mail Processing Facility Reviews.

Congress put a hold on planned USPS network changes more than a decade ago. But DeJoy has repeatedly pushed back on comparing his plan to earlier USPS consolidation efforts — stressing that his plan focuses on opening new, more efficient facilities to replace plants that haven’t seen meaningful upgrades in decades.

“I suspect these misconceptions are based on the past when we did close these types of facilities as part of a decidedly different strategy, and conflated with some current service issues we are experiencing,” DeJoy wrote, adding that some elements of the USPS workforce are also wary of these changes.

“I also know that there is legacy desire among some segment of our workforce at the local level to maintain the status quo, which I understand but frankly am disappointed by. Through continued training and education, we will work to try to change hearts and minds and to sell the virtues of our plan for service excellence and financial health,” he wrote.

DeJoy said USPS will also continue to consider whether to seek an advisory opinion from the Postal Regulatory Commission regarding its network modernization changes.

The commission recently asked USPS to either start the process of obtaining an advisory opinion on its network modernization plans or explain why such a review is unnecessary.

“It is clear that there has been a quantifiable decline in service across several regions during and after the implementation of new facility types,” the commission wrote.

USPS delivered about 84% of all first-class mail on time in the second quarter of fiscal 2024 — compared to nearly 91% for the same period last year.

DeJoy said a pause in Mail Processing Facility Reviews means USPS will also have to put some of its capital investments for these facilities on hold, and that the annual cost savings associated with these changes “will not be achieved while we pause.”

The agency planned to make $430 million of capital investments in its facilities and achieve $133-177 million in annual cost savings.

“I am continuing to evaluate any additional changes we have underway and will advise you of our approach to satisfy any of your concerns regarding their engagement or any filing that might be warranted with the PRC,” DeJoy wrote. “I need more time to evaluate and hope you understand the complexity of our challenge.”

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