President Joe Biden’s latest Postal Service leadership picks are telling lawmakers that Congress, watchdogs and customers will have a seat at the table as the agency keeps going with a 10-year reform plan meant to put it on firmer financial footing.

The Biden administration’s three nominees to serve on the USPS Board of Governors told the Senate Homeland Security and Governmental Affairs Committee that, confirmed, they would ensure USPS prioritizes reliable, on-time mail delivery as it pursues strategies to cut billions of dollars in annual operating costs and bring in more revenue by growing its package business.

USPS reported a $9.5 billion net loss in fiscal 2024, a deeper loss than it’s seen in recent years. It expects to end this fiscal year with a $6.9 billion net loss.

Val Demings, a former Democratic congresswoman from Florida and police chief of the Orlando Police Department, said USPS “has ongoing challenges,” but told lawmakers it needs to balance its plan to regain long-term financial stability with its mission to provide “the best service possible to the American people.”

“The Postal Service has ongoing challenges and is in the midst of a 10-year reorganization plan. If confirmed, I will commit to working with all members of the board to ensure that we are listening to the concerns of all postal stakeholders and that all voices are reflected in our choices,” Demings said.

Demings added that the Postal Regulatory Commission “plays a critical role in making sure that we have the information that we need.”

Gordon Hartogensis, former director of the Pension Benefit Guarantee Corporation, said part of the USPS board’s job is to ensure “there is transparency for outside stakeholders, including Congress, regulators and the public” — as well as hold USPS management accountable for performance under its 10-year Delivering for America plan, and change course, if necessary.

“The U.S. Postal Service is an essential service that touches everyone. Any disruption in service is going to be met with fierce backlash from stakeholders,” Hartogensis said. “It’s important to communicate effectively the benefits of any changes that impact the end customers experience.”

“If there are things that are causing delays, that are mishaps, the important thing for us to look at is this a mistake that’s correctable, a glitch that that we can learn from and make things better? Or is it part of a recurring pattern that’s not, which requires a course correction?” he added. “It’s critical for the Board of Governors to determine which is which, and if it requires a course correction, take action.”

Bill Zollars, a former member of the USPS board whose term expired in 2023, was renominated by Biden to serve another term. He told the committee that USPS faces a delicate “balancing act” with its network modernization plans — ensuring reliable, on-time delivery to customers, while making changes that will help the agency become financially stable in the long term.

The current USPS delivery network, he added, hasn’t changed much in 40 years, and doesn’t reflect the agency’s changing business model, which focuses in part on capturing more of the package delivery business from its competitors.

“There are going to be changes to the network that are inevitable to get to a contemporary network,” he said. “We aren’t planning on closing anything, as far as I know, but there will be operational changes because we’ve got locations that are in the wrong place, with the wrong equipment and the wrong training.”

Biden also nominated his former Labor Secretary Marty Walsh to serve on the USPS Board of Governors, but the White House withdrew his nomination on Thursday.

The USPS Board of Governors operates much like a company’s board of trustees. If USPS were a publicly traded company, Zollars said it would rank as the 45th largest company on the Fortune 500 — standing alongside companies like Pepsi and FedEx.

USPS, he added, is “obviously not where we want to be, in terms of performance.” It delivered about 86% of first-class mail on time in FY 2024, according to its service performance dashboard — down from 91% the year prior — falling short of its 95% on-time delivery goal.

But Zollars said has a “substantial competitive advantage,” because it goes where its competitors don’t — to 167 million addresses in the U.S. at least six days a week.

“No other competitor has that, and that is why UPS, FedEx and Amazon use the Postal Service on a frequent basis to complete their deliveries,” he said.

Among its duties, the board directs USPS spending and signs off on long-term policy decisions. A majority of presidentially appointed members of the board also decides when it’s time to hire or fire a postmaster general.

Members USPS Board of Governors meeting, however, said they’re committed to DeJoy’s 10-year agency reform plan at a public meeting on Thursday.

“When I left a year ago, there was tremendous support for the DFA and for the postmaster general,” Zollars said. “I’m not sure that anything has changed, but if it was obvious that the postmaster general needed to be replaced, that’s one of our primary responsibilities — is to hire and fire the postmaster general, and we take that very seriously.”

Hartogensis said any postmaster general’s inability to meet USPS performance targets or “learn from mistakes” would be grounds for their removal.

“Mistakes will happen, if it seems like the same things are being repeated without learning,” he said, adding that USPS management also needs to be transparent with Congress, its regulator and the public,” he said. “If we feel like the management is hiding things, sweeping things under the rug, that’s cause for termination,” he said.

Postmaster General Louis DeJoy has butted heads before with the Postal Regulatory Commission and members of Congress who have told USPS to pause or slow down parts of its 10-year reform plan.

DeJoy told lawmakers last year that the Postal Regulatory Commission’s probes of its network modernization effort would “put this whole plan in jeopardy.”

USPS also faced bipartisan pushback from lawmakers this year over its network modernization plans. Congressional concerns grew after USPS opened its first wave of regional mail processing mega-centers, called Regional Processing and Distribution Centers (RPDCs), but saw persistent declines in on-time delivery in some locations — including Atlanta, Houston and Richmond, Virginia.

“I’m not sure that the plan was necessarily the bigger part of the issue,” Zollars said. “I think more of it was execution.”

USPS told its regulator in May that those regional mail delays are improving, but agreed to put some of its network modernization changes on hold at least until January 2025.

The Postal Regulatory Commission, however, urged USPS in a filing this summer to “pause other DFA Plan initiatives … so that it can conduct a comprehensive study of the DFA Plan’s potential impacts on service performance.”

Federal law requires USPS to seek out an advisory opinion from its regulator whenever it makes a “change in the nature of postal services which will generally affect service on a nationwide or substantially nationwide basis.”

Zollars said “every one of the recommendations from the PRC is really seriously considered” by USPS management.

“I see no reason that that will change, as well as seriously considering recommendations that we get from our other constituencies,” he added.

USPS is seeking an advisory opinion from its regulator on its network Regional Transformation Optimization effort – a plan next year to save billions of dollars by cutting the number of trips its trucks run between mail processing facilities and post offices to transport mail and packages.

In more rural areas further away from USPS mail processing plants, mail and packages would remain in transit for about a day longer before reaching their destination.

The Postal Regulatory Commission’s advisory opinions, however, are nonbinding, and do not compel USPS to make any changes to its reform plans.

Sen. Josh Hawley (R-Mo.) stands among lawmakers who are pushing back on those plans He says USPS shouldn’t pursue these changes, on top of network modernization changes that have led to slower mail both regionally and nationally.

Hartogensis told lawmakers that “there are good reasons for the plan, in terms of the long-term modernization of the Postal Service,” but raised concerns about the impact of rural delivery.

“If rural communities are really being impacted negatively, I think USPS needs to learn from that, and account for that, as part of its mission and make sure that service is not sacrificed,” Hartogensis said.

Demings told lawmakers that she would gather more information about the RTO initiative, but also expressed reservations about its potential impact on rural delivery.

“It appears to me, just based on what you have shared with us, that is in is in conflict with the Universal Service Obligation,” Demings said, referring to the agency’s legal requirement to provide a minimum level of service to all its customers.

DeJoy said Thursday that effort could save USPS up to $3.7 billion annually, and is essential to USPS to remain “financially self-sufficient while continuing to deliver to every address across the nation.”

“I will emphasize this is not an initiative to slow down the mail for rural America, close post offices or pursue draconian cost cuts,” DeJoy said. “This is a rationalized and methodical initiative to save the Postal Service for generations to come.”

Copyright © 2024 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.