While the U.S. Postal Service is critically important to the American people and one of the most trusted brands in the government, we have been trapped in an unsustainable operating model, plagued by legislative, regulatory, stakeholder resistance, and management inaction. Since 2007, we have recorded significant net losses each year.
The Delivering for America 10-Year Strategic Plan establishes clear strategies to steadily achieve financial stability and service excellence. 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 Plan – and doing so in a timely manner – we anticipate achieving a break-even status in the next few years and reverse a projected $160 billion in losses over the next ten years.
A cornerstone of the Delivering for America Plan is a multi-year initiative to transform the aging and overly complex postal network into a modern, world-class logistics network that better serves our employees with improved work environments, and better serves our customers with more reliable and improved service performance.
For example, through the centralization of carrier operations into new, large Sorting and Delivery Centers (S&DCs), the Postal Service will maintain reliable and efficient delivery services for all customers, while also improving the Postal Service’s ability appeal to both small and large shippers, as it will enhance our ability to reach a much broader range of businesses and consumers.
The benefits of network refinements will be:
- Many S&DCs will utilize existing postal-owned buildings where significant upgrades will be implemented, in many cases also accomplishing deferred maintenance.
- The centers, along with improvements to our product offerings, will allow us to expand a business customer’s local, regional, and nationwide market reach from a single nearby drop location in shortened time intervals; in many cases same-day or next-day.
- The centers will enable electric vehicle deployment by concentrating EVs where electricity and facility infrastructure leads to feasibility.
- Installation of new package sortation equipment to improve the flow of both mail and packages, which is essential to our financial and operational future.
- Greatly improving employee morale by providing modern and inviting workspaces.
- By centralizing delivery operations, we will be able to substantially reduce costly and underutilized truck trips from our processing plants and achieve both financial and environmental goals.
Any movement of employees will be done in accordance with the respective collective bargaining agreement. Any changes made to our carriers will not affect our retail operations and customers who visit physical Post Offices/retail locations will not be impacted.
This change will allow for us to serve our customers and your constituents more efficiently.
Next Generation Delivery Vehicle Acquisition and Rollout:
We are committed to the fiscally and operationally responsible roll-out of delivery vehicles for America’s largest and oldest federal fleet with an increasing electrification mix consistent with our mail delivery mission and network modernization.
Thanks to the Delivering for America Plan, and funding included in the Inflation Reduction Act (IRA), the Postal Service will operate one of the largest electric vehicle fleets in the nation. The Postal Service anticipates increasing the quantity of purpose-built Next Generation Delivery Vehicles (NGDV) to a minimum of 60,000, of which at least 45,000 will be battery electric by 2028. In addition to NGDVs, the Postal Service expects to purchase an additional 21,000 battery electric delivery vehicles through 2028, representing a mix of commercial-off-the-shelf (COTS) vehicles.
The first NGDVs are expected on carrier routes in 2024, with electric COTS vehicles beginning in December of 2023.
Administrative Action Needed:
We request that the Administration correct the longstanding, unfair allocation of CSRS benefits for legacy Post Office Department employees.
OPM apportions the cost of CSRS benefits for employees that worked at both the Post Office Department and the Postal Service between the Treasury and the Postal Service. The method that OPM currently uses for this apportionment is unfair and benefits the rest of the federal government at the expense of the Postal Service.
Since 1971, every time those employees received a pay increase, their CSRS pension benefits grew in value, including the benefits they earned while working for the Post Office Department.
However, Treasury pays only those benefits which were accrued up to 1971. We pay for all increases in pension benefits resulting from pay increases made after 1971, even though the Postal Service was not given direct control over wage increases or pension costs. This methodology is flawed and fails to reflect modern actuarial principles typically employed in the private sector for the allocation of pension liabilities.
A 2003 law, as well as the Postal Accountability and Enhancement Act (PAEA) in 2006, required the use of generally accepted actuarial practices and principles in determining the CSRS liability of the Postal Service, including the use of dynamic assumptions to account for employees’ anticipated future pay increases. However, OPM has applied these assumptions only to the Postal Service share of the costs. Our CSRS funding obligations increase each year, while the federal government’s obligations remain unchanged.
This simple and fair method to apportion government contributions to CSRS annuities for employees who transitioned to the Postal Service with prior creditable service at the pre-1971 Post Office Department would result in a substantial financial relief to the Postal Service. This change has also been recommended by the leaders of our congressional oversight committees and our employee unions.
We are on a positive path forward:
- The financial condition of the Postal Service is improving.
- Service performance is returning to our traditional high standard of service excellence.
- We are transforming into a modern, efficient, and financially sustainable organization capable of fulfilling our mandate to deliver to every American household six-days a week, and proving products and services the American people value.
The Delivering for America Plan is working, and we look forward to encouragement from Congress to continue implementing the Plan and making our substantial progress toward a modernized and self-sustaining Postal Service.