Lifting the Veil Over Network Redesign

Ever since the issuance of Postmaster General Louis DeJoy’s 10-year plan, the commercial mailing community has been hoping to learn of his blueprint for making the Postal Service’s infrastructure more efficient and less costly. When some was provided, however, it was in a five-minute video for employees released in July. In the video, DeJoy offered some relative specifics, saying the USPS will:

“... build or designate facilities of significant size to support a network of at least 60 new regional processing and distribution centers to accommodate the national movement of mail and packages. ...

“... invest in most existing mail and processing facilities across the nation to improve the working environment and to enable them to conform to our new operating standards.

“... eliminate ad hoc facilities across the nation, put in place over the years to provide capacity without any clear strategy for long term efficiency and cost effectiveness.

“... repurpose and equip previously vacated facilities across the country to accommodate large and modernized delivery units ...

“... create large delivery units in our mail processing facilities, again, reducing time and the cost of transportation ... [In a subsequent speech to PCC officials, the PMG stated that the current approximately 19,000 delivery units would be reduced to about 11,000 as a result of the initiative.]”

With about 250 mail processing facilities of varying sizes already in operation – not counting purpose-built airport mail facilities, it’s unclear how many new buildings will be constructed and how many existing (or closed) facilities will be repurposed or eliminated. Likewise unclear is how many current processing facilities will become or house a “large delivery unit.” So far, the only clarity seems to be about the nomenclature for the new facilities:

• The NDCs (formerly BMCs) would become Regional Processing Distribution Centers (RPDCs);

• Current Processing and Distribution Centers (P&DCs), once Sectional Center Facilities (SCFs) will become Local Processing Centers (LPCs);

• Some current Delivery Units (DUs) would be merged into the planned Sorting and Distribution Centers (SDCs) that would perform final sortation of mail for the co-located delivery routes.

To long-term industry veterans, DeJoy’s plans are only the latest changes to a postal infrastructure that’s been evolving more quickly since the early 1960s.

A 2011 study of the network by the USPS Office of Inspector General’s Risk Analysis Research Center counted 528 processing facilities then in operation, but modeled how the same work could be done with a matrix of only 135 facilities. The round of consolidations that was conducted in the early 2010s pared the total number of facilities by about half, though that process was never completed because of resistance by the postal unions and their friends in Congress. (The remaining unfinished facility consolidation studies were canceled in August.)

The next insight into the redesign process came from briefings to labor groups that found their way to the postal media. The focus of the documents is the consolidation of delivery operations in specific areas from post offices to newly established SDCs that would be located in existing facilities where space had been vacated after mail processing functions were relocated.

To begin, the USPS had identified facilities with excess empty space into which at least two existing delivery units and 20 routes could be consolidated, as well as post offices with city and rural routes within 30 minutes’ travel time (one way). Candidate facilities were evaluated for their ability to be expanded as needed, and for the availability of parking space for both employees and delivery vehicles. After completing its analyses, the facilities are ranked in order of opportunity if activated as SDCs.

Based on the documents sent to the labor groups, the top 10 facilities identified to become SDCs were Athens (GA) P&DC, Bryan (TX) P&DC, Columbus (GA) PO, Gainesville (FL) P&DF, Kalamazoo (MI) P&DC, Mid-Hudson (NY) P&DC, New Castle (PA) P&DF, Southeastern (PA) P&DC, Topeka/Northpark (KS) P&DC, and Utica (NY) P&DF; 13 other facilities were also listed. All would have the SDCs established between September 2022 and February 2023.

According to the USPS information, 928 facilities with available space have been identified overall, and site surveys and project plans have begun. In addition, as the agency organizes its network of regional processing and distribution centers, it will evaluate opportunities in metropolitan areas to co-locate an SDC or to buy or build a suitable new SDC facility.

An obvious consequence of the consolidations is greater travel time from the SDC to a carrier’s delivery route and less delivery time – meaning fewer stops can be served. In turn, this will require the establishment of five to 10% more delivery routes to serve the same deliveries. This has led to concerns among observers that the concurrent increase in vehicle mileage and fuel costs, as well as the cost of additional carriers and vehicles for the new routes that will be required, will offset any anticipated savings. Although the PMG dismisses doubts and questions as “noise,” it would still be appropriate to explain to ratepayers how the overall SDC concept really will reduce costs.

Leo Raymond is Owner, Mailers Hub. This information is based on articles in Mailers Hub News, which is included in Mailers Hub subscriptions.

This article originally appeared in the September/October, 2022 issue of Mailing Systems Technology.