Postmaster General Louis DeJoy says the Postal Service may need to cut its workforce by 50,000 jobs as the agency seeks to consolidate its network of facilities that process mail.
DeJoy, speaking at the American Enterprise Institute on Wednesday, said he plans to consolidate 500 facilities that USPS processes and moves mail to about 65 to 75 regional centers.
DeJoy said he is “committed to a stable workforce” and is working with mail…
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Postmaster General Louis DeJoy says the Postal Service may need to cut its workforce by 50,000 jobs as the agency seeks to consolidate its network of facilities that process mail.
DeJoy, speaking at American Enterprise Institute Wednesdaysaid it plans to consolidate 500 facilities that USPS processes and moves mail to about 65 to 75 regional hubs.
DeJoy said he is “committed to a stable workforce” and is working with postal unions on that effort, but that he will easily handle any workforce reductions through attrition.
“Right now, to break even, I think we’re going to have to take 50,000 people out of the organization. But that’s OK, because over the next two years, 200,000 people are leaving the organization to retire. So we’re going to be an organization recruitment,” DeJoy said. “We’ve got to be good at retention, we’ve got to be good at recruiting people and we’re doing a lot of different activities around here.”
DeJoy told reporters after the event that the sorting and delivery centers USPS is creating to consolidate operations will be a combination of new construction and renovations at existing plants.
“We will remove equipment, rearrange them in a logical sequence within the plants. We basically do seven different functions: packet destination processing, packet source processing, destination mail processing, and we’ll set them up appropriately once we get to the region,” DeJoy said.
Among the facilities facing consolidation, DeJoy said USPS will close 150 annexes, about 40 of which USPS opened to handle a surge in packages during the peak holiday season late last year.
“We’re going to remove them, and that’s going to take four years or so to actually happen,” DeJoy said.
DeJoy said the USPS sorting and delivery centers will have enough space, docks and mail processing equipment to operate more efficiently than their current infrastructure. He said USPS will build new sorting and delivery centers in Atlanta, Indianapolis and Charlotte, but also convert some existing facilities.
“We’re actually opening up all of our closed plants. We have about 1,000 plants that are sitting, and we’re converting them and putting a lot of money into them, and getting them to launch delivery units and package processing operations,” he told reporters.
USPS gets $3 million for electric fleet in settlement agreement
Meanwhile, a reconciliation agreement announced Wednesday Senate Majority Leader Chuck Schumer (DN.Y.) and Sen. Joe Manchin (DW.V.) would give the US $3 billion to buy electric vehicles and charging infrastructure.
A the invoice summary describes the USPS spending $3 billion as part of a larger $9 billion investment in “federal procurement of American-made clean technologies to create a stable market for clean products.”
Congressional funding would give USPS greater purchasing power for an electric fleet, compared to what the agency could afford on its own.
USPS recently announced that, for now, it plans to buy only the 50,000 Next Generation Delivery Vehicles (NGDVs) it ordered in March, the minimum specified in its contract with Oshkosh Defense.
The agency, however, now ensures that no less than 50% of these custom-made vehicles will be electric vehicles. To replace its aging fleet of vehicles more immediately, USPS plans to purchase 34,500 commercial off-the-shelf (COTS) vehicles over a two-year period.
“We are interested in COTS, we are always looking for better ways. We’ll evaluate that, but having a special vehicle built for which you’ve gone through a two-and-a-half-year, three-year due diligence process to design matters,” DeJoy told reporters.
In total, USPS expects 40% of those 84,500 vehicles to be electric. However, DeJoy said commercial electric vehicles remain in short supply.
“If I went out today and said, ‘OK, I’ve got $2 billion, $3 billion, I want to buy electric vehicles,’ do you know how many I would buy? Two, because they’re not available,” he said.
DeJoy told reporters that this vehicle procurement strategy gives USPS more flexibility to buy electric vehicles “as the market develops.”
“That doesn’t mean we won’t buy more. It just means we evaluate every year,” DeJoy told reporters.
DeJoy has repeatedly said the USPS will buy as many electric vehicles as it can afford, but said the agency urgently needs to replace its aging fleet.
“Vehicles weren’t getting any younger. We have people who are told not to put the vehicle in reverse when you go out to deliver. They’re burning in the streets when you’re out,” DeJoy said.
DeJoy said USPS through a 10-year reform plan has cut its projected losses over the next decade by $90 billion, more than half of its break-even goal.
“The ball is now in our court to affect the operational and marketing changes we need to achieve the transformation. We have now begun to change the direction of the postal service. We are a better organization in a better financial position than we were just a year ago,” he said.
DeJoy said the USPS has gone through a “transformation from a crisis, to a state of stability, and then to a successful trajectory” since he took over in the summer of 2020.
DeJoy said two years ago that USPS had a 45 percent turnover rate for its pre-career workforce, and trucks traveling between processing plants and post offices were 30 percent full, requiring “significant overtime and the requirement of Herculean efforts to do the simplest of all.” things.”
DeJoy said USPS also maintained an extensive retail network, even though the average American only visited a post office about twice a year.
“All of these elements of erosion were not stagnant. They were not frozen at that particular moment in time when they appeared. They were metastasizing at a rapid rate, resulting in the continued failure of our service and the short-term financial destruction of the postal service of United States,” DeJoy said.
DeJoy said USPS has received “a lot of pushback” from higher mail prices as well as a new service standard that slowed the delivery of nearly 40 percent of first-class mail.
However, he said it will take several years for the USPS to reduce the higher rates, given the rate of inflation and a “flawed pricing model” that did not fully cover USPS costs for nearly 15 years.
“I think we’re going to be fine with speed. I don’t believe in dying slow deaths. People who are going to leave the Postal Service because of electronic and digital communication will eventually leave the Postal Service,” DeJoy said. “I needed to prepare for a postal service 10 years from now. And I say to mailers, ‘You guys have short-term goals.’ I don’t.'”
