PRC Finds Flaws in Plant Consolidation Process
The Postal Rate Commission yesterday issued its “Opinion and Recommended Decision” in the Evolutionary Network Development (END) proceedings. The PRC found that the USPS had ”not provide assurance that the proposed realignment program, as currently envisaged, will meet its declared goals. In particular, the record reflects flawed or absent information on certain crucial aspects of the Postal Service’s plan for network realignment.”
The PRC found that the plan’s flaws included:
- Questionable or Incomplete Cost and Service Estimates
- Inadequate Review of Local Impacts
- Insufficient Provisions for Public Participation
The commission analyzed the Area Mail Processing (AMP) process for evaluating individual plant consolidations, and found that:
- AMP Reviews Lack Consistency
- AMP Process Lacks Criteria for Approval
- The Post Implementation Review Process (PIR) is Flawed
The commission also criticized the USPS for failing to fully consider the service implications of plant realignments:
The Postal Service is a service organization, perhaps the largest such organization in the country. It does not seem prudent, in the Commission’s view, for an organization of its size and economic importance to commit itself to a logistics network restructuring program of this magnitude, without first having a full grasp of its likely effect on the service that it provides its customers. If the Postal Service’s representations in this docket are accurate, however, that is what the Postal Service is considering. The Commission recommends that the Postal Service choose a “most likely” network realignment outcome for planning purposes, and estimate the full range of service impacts that would result from that outcome before it commits further resources to this program.
Commissioner Ruth Goldway wrote in a concurring opinion that the Commission’s opinion “fails to express sufficiently serious concern about the problems that have arisen in initial stages of the Postal Service’s consolidation efforts, in places such as Southern California, El Paso, Texas and Las Vegas, Nevada.”
I am concerned that unless the Postal Service management is truly attentive to improving the AMP change process, implementation of network realignment is likely to result in substantial, unexpected, and potentially expensive service disruptions throughout the nation. A clear example is that the AMP change analysis performed prior to the recent consolidation of the Marina Del Rey facility into the existing Los Angeles facility totally failed to predict the myriad of service disruptions that occurred in the weeks and months after implementation.
…Before the Postal Service implements the dozens of consolidations required by network realignment, it should improve the AMP change process to insure that service disruptions are minimized. The best way to improve that process is to fully review each consolidation that has already occurred. It should honestly face and thoroughly analyze mis-estimates and determine the lessons learned. Going forward, the Postal Service should require forecasts of possible changes in service levels to the end users in planning every AMP change, require measurement of customer feedback in any post implementation review, and then accurately measure the net cost savings by including changes in post-implementation workforce, transportation or other adjustments.
ADVISORY OPINION CONCERNING A PROPOSED CHANGE IN THE NATURE OF POSTAL SERVICES
