News: Going Postal

Weird math, old laws and aged machines trouble mail system

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At the Sharonville Bulk Mail Center, a curious arithmetic is at play, so that 3,000 minus 2,000 sometimes equals 5,000. If you want a sense of what the U.S. Postal Service is like at the dawn of the 21st century, this is a good place to learn.

In the Information Age, communications is the impetus behind economic growth, and technology is the key to serving consumers. But post offices around the country rely on systems set up in the Nixon administration to handle what remains the largest distributor of information in the United States: door-to-door delivery of mail.

The Postal Service (USPS) is falling deeper into financial trouble — so much so that Congress is talking about closing post offices, cutting delivery to five days per week and whether to continue delivering mail all over the country for the same price. Estimates predict USPS will lose $3 billion to $5 billion this year on a budget of $65 billion. That puts the agency in a position to reach its legal debt limit of $15 billion by the end of 2002; at the end of 2000, it had borrowed $9.3 billion.

Few parts of the federal government touch every American the way USPS does. The agency employs nearly 900,000 people who deliver more than 200 billion pieces of mail each year to 135 million addresses.

Recycling mail
Gary Joseph started working at the Sharonville Bulk Mail Center (BMC) in 1981, trained as a supervisor in 1986 and was acting supervisor by mid-1990. That's when he noticed a plant manager filing for overtime, even though the mail volume didn't justify it.

Joseph asked the manager why, and the manager told Joseph to mind his own business. Thus began a five-year-long, semi-successful attempt to improve the BMC.

The USPS' 21 BMCs, built in the early 1970s, handle all non-first class mail, meaning everything but letters. Joseph says no one knows exactly how much mail they handle, because there are no accurate counts. That's because the BMC machinery often scans part of the mail multiple times. Some is rerouted to another bin and sent back through the machinery until it's properly processed. Joseph calls this "mail recycling."

For example, 1,000 pieces of mail might be counted as 1,300 pieces after going through the BMC. Or, Joseph says, the BMC might take in 3,000 pieces, but send 2,000 to a nearby runoff facility to be processed. Then that might show up as 5,000 pieces processed.

Another problem, Joseph says, is the BMC estimates, instead of counting, how much mail is in each pallet, the large open-topped containers used to transport mail. This is important because productivity is one of the standards for paying supervisor-class employees bonuses. Last year USPS paid 82,953 employees a total of $197 million in bonuses, an average of $2,377 each.

When Joseph took his concerns to supervisors, they referred the matter to financial investigators. Officials seemed satisfied with an audit by the Postal Inspection Services. But Joseph says the audit didn't directly address the problems at the Sharonville BMC, so he passed his complaints to the Office of the Inspector General (OIG), which reports directly to the USPS Board of Governors. Joseph also contacted local Congressional representatives, including Rep. Steve Chabot (R-Cincinnati).

Joseph says he explained the BMC's problems to four OIG auditors, sometimes at his dining room table in Cheviot. The result was a 20-page Sept. 1998 OIG audit that didn't "substantiate the allegation of intentionally inflated manual mail volume counts," but did confirm "opportunities exist to improve counting and reporting procedures." The audit said BMC supervisors "were often unaware of how volume counts were captured and reported ... as a result, personnel misstated manual volume counts by 13 percent," the audit says.

Auditors recommended adding mechanical counters to conveyor belts and using databases and spread sheets to more accurately track volume. Problems at the BMC at the time of the audit have been corrected, according to Cincinnati District Manager Norm Calhoun, who received a bonus of almost $13,000 last year. The OIG hasn't followed up the 1998 audit because it was satisfied with management's response, according to OIG spokesman Sandra Harding.

But Joseph says the changes were only cosmetic, because the counters can be reset, and the BMC still repeatedly counts some of its mail. The BMC changes were supposed to be in place by October 1998, so Joseph asked to see some of the BMCs daily counts in November. He found the numbers still didn't make sense. For example, the daily log for Nov. 5, 1998 indicates the BMC processed 1,414 pallets of mail; but the same counts indicate the BMC began the day with 178 pallets, and only 128 more were unloaded. Where did the other 1,108 pallets come from? And even if they were there, that's far more mail than BMC employees and machines could possibly process in a day, Joseph says.

Joseph says he brought this to the attention of John Mulkay, then manager of the BMC and now the Cincinnati Postmaster. Joseph says he was thereafter denied access to the counts. CityBeat faxed Mulkay a copy of the Nov. 5 log sheets and asked him to explain the numbers, but Mulkay didn't respond to that or any other question.

Gary Stern, branch president of the National Postal Mail Handlers Union, local 304, says he was unable to substantiate Joseph's claims. But Stern, a BMC employee since 1983, says the facility has its faults. For example, if 300 daytime workers are scheduled, but volume doesn't justify that many, managers have taken processed trucks of mail and dumped it back into the system to justify the staff levels.

Stern also says mail is double-counted if the proper pallets for certain mail fill up before they can be moved away from the conveyor. Any mail that can't fit into the proper pallet is diverted into a runoff pallet — and reprocessed.

'I won't go away'
In March USPS halted about 800 construction projects nationwide to make up for this year's expected budget deficit. The freeze on new construction includes 37 projects in Ohio, Kentucky and Indiana.

In April the U.S. General Accounting Office (GAO) placed USPS on its list of high-risk agencies, saying it needs immediate and long-term plans to address financial problems.

The House and Senate are scheduled to hold hearings this week that could lead to reform legislation. The laws regulating USPS haven't changed much since the 1970 Postal Reorganization Act, which made the postal service an independent federal agency expected to neither make nor lose money. Those laws were written by legislators before the electronic information age and competition from FedEx and United Parcel Service.

Joseph says the USPS' troubles run deeper than old laws or competition from e-mail and faxes. A major problem is mail handling systems have one foot in the manual past and one in the machine present.

"You can't fix it," Joseph says. "It costs too much money. You can't make a Ferrari out of a Volkswagen."

Postal employees cannot legally strike, and the USPS can't lay off employees or close any of its 38,000 retail outlets for budget reasons. It also can't offer progressive discounts to bulk mailers, nor set its own rates. That's up to the Postal Rate Commission, an arduous, months-long process.

"No other entity out there operates that way," says Bob Taub, chief of staff for U.S. Rep. John McHugh (R-NY), who led the last reform effort. "On one hand, it's amazing it operates as efficiently as it does."

McHugh introduced his first package of moderate reforms in June 1996, Taub says. The laws would have allowed USPS more flexibility to set rates, including giving more bulk discounts, and would have given more power to the Postal Rate Commission, which sets rates but otherwise is only an advisory group. McHugh's bill died in April 1999 in the Government Reform Committee.

U.S. Rep. Dan Burton (R-IN), who became committee chair in January, is trying to revive parts of McHugh's proposal.

One thing is for sure: USPS can't handle its problems with rate hikes alone, according to Mark Corallo, spokesman for the Government Reform Committee.

Meanwhile, there's more and more talk in Congress about USPS, particularly the $197 million in 2000 bonuses.

"I will say this — it is certainly a topic of discussion among members, on both sides of the isle," Corallo says.

What is Joseph's motivation? Joseph says he was passed over for a promotion in the early 1990s, but shrugs off the idea that's the fuel for his desire to challenge USPS. He tried and failed to press a taxpayer lawsuit, but the goal was not to make him wealthy, Joseph says; he just wanted to protect his job. Fired for sexual harassment, then rehired when the allegation was thrown out by an arbitrator, Joseph has been under psychological care for stress and depression. He is now waiting for approval of a stress-related retirement claim.

Having exhausted the postal chain of command, Joseph is turning to the General Accounting Office (GAO), which monitors and audits the federal government.

"Now is the time they should have the GAO out there watching these people," he says.

Joseph again met Chabot and his staff May 7.

"The problem won't go away," Joseph says. "And I won't go away." ©

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