FULL HEARING: Postmaster General Louis DeJoy Testifies Before Senate Homeland Security Committee

[0:01] The committee will now come to order. [0:04] We're coming together at a very important time for the Postal Service [0:09] where postal workers just successfully delivered ballot mail [0:13] during a busy election season and are now ramping up for a peak holiday season. [0:19] And Postmaster General shared some numbers for the election mail [0:22] I think you'll probably talk about in your testimony here today, [0:26] but certainly a very busy time. [0:28] And I certainly appreciate Postmaster General DeJoy for being before us here today [0:33] to answer questions about the Postal Service operations, finances, [0:37] and its services to the American people every day. [0:42] One key issue we'll discuss today is the Postal Service's proposed service changes, [0:47] which are currently under review by the Postal Regulatory Commission. [0:51] We will continue to examine these plans and their potential impacts on constituents, [0:56] as well as their implications for Postal Service finances. [1:00] The Postal Service connects Americans everywhere, [1:03] delivering critical mail like prescription drugs, [1:06] Social Security checks, rent payments, small business packages, and the list goes on. [1:12] Americans rely on the Postal Service every day, [1:15] so it's critical that we understand its plans for service, operations, and finances. [1:20] Our last hearing with the Postmaster General was in April, [1:25] where we discussed the significant nationwide changes the Postal Service has begun making to its operational network. [1:32] These include plans to consolidate facilities and reduce truck trips and other changes as to how mail is delivered. [1:39] These changes will have raised concerns about service quality and cost-effectiveness, [1:46] particularly in rural areas like Iron Mountain Processing Center in my home state of Michigan. [1:51] At our last hearing and afterward, my colleagues and I urged you to, [1:55] the Postmaster General, to pause and further study these changes before moving forward [2:01] to fully understand their impacts on the service and cost. [2:05] As a result, the Postal Service paused a number of facility consolidations until January of 2025. [2:13] The Postal Service also requested an advisory opinion from its regulator, [2:17] the Postal Regulatory Commission, to further study these changes. [2:21] I think this is a positive step to fully understand the impacts through a transparent public process. [2:28] However, since our last hearing, the Postal Service has also announced new changes, [2:32] including changes to its service standards, which dictate the speed of mail delivery. [2:38] Members of Congress, including members of this committee, [2:41] have continued to raise questions about these changes and about the service impacts. [2:46] Two years ago, I led the passage of the Bipartisan Postal Service Reform Act, [2:50] the first major reforms to the Postal Service, in over 15 years. [2:55] This legislation set the agency on a more stable financial footing, [2:58] providing over $50 billion in financial relief over 10 years. [3:03] The Postal Service is not on the brink of financial crisis, [3:07] but it does need to make careful decisions about how it moves forward. [3:11] And while the Postal Service is making changes intended to save costs, [3:16] questions certainly remain about tracking actual cost reductions [3:20] and the potential for service cuts that also impact the bottom line. [3:26] Above all, the Postal Service must continue to focus on its public service mandate [3:30] to deliver to each and every American. [3:33] And that's why we're here today, [3:34] to ensure the Postal Service remains accountable to Congress and the American people. [3:40] The members of this committee and other senators I've heard from [3:43] are certainly looking for a very open discussion. [3:47] Mr. DeJoy, thank you. [3:48] Thank you for being here today, for answering members' questions. [3:53] And I look forward to a robust discussion. [3:57] I would now like to turn over the mic to ranking member Paul for his opening remarks. [4:04] Over 40 years ago, Milton Friedman remarked, [4:07] if you put the federal government in charge of the Sahara Desert, [4:10] in five years there'd be a shortage of sand. [4:13] While Friedman was discussing price controls and output restrictions and oil and gas in Dubai, [4:18] this same logic can be applied to the U.S. Postal Service. [4:22] In 2020, Congress was promised that a $107 billion bailout [4:27] would put the Post Office out of the roll and out of the hole it has been within three or four years. [4:34] We were also told that the USPS operations would break even by 2031. [4:38] Postmaster DeJoy sat in front of our committee in August of that year and stated, [4:43] I am absolutely convinced that with some help from Congress and our regulator, [4:47] we can do it and that there is a bright future ahead for the Post Office. [4:51] I argued against giving more taxpayer money to the Postal Service, [4:56] suggesting that private business would be better at managing ongoing costs by making the necessary cuts. [5:02] Unfortunately, my concerns have proven to be correct. [5:05] The Postal Service's Delivering for America initiative, the bailout, was expected to yield quick results. [5:13] However, the Post Office lost $6.5 billion in 2023 and is set to lose $9.5 billion in 2024. [5:22] That doesn't sound like progress. [5:24] They were losing a billion dollars a quarter. [5:26] Now they're losing $2 billion a quarter. [5:28] Only in Washington can someone point to losing $2 billion a quarter as a success. [5:33] Given the continued financial shortfalls, it is entirely nonsensical for the USPS [5:40] to convert more than 190,000 service workers into career roles since October 2020. [5:47] If this were a private business, you'd be doing the opposite. [5:50] If you were a unionized corporation in one state, what do they do? [5:55] They actually move to another state and open a non-unionized in a right-to-work state, [6:00] and that's how they continue to exist. [6:02] Corporations don't add to their misery by adding and increasing their labor costs. [6:09] These government career roles effectively allow those workers to make 50% more per hour [6:16] and create decades of benefits responsibilities that will make breaking even in the future even more difficult. [6:23] When we had pension problems in Kentucky, we did the opposite. [6:26] We ended up changing from a pension. [6:28] We went to a contribution plan, and then we gradually are fixing. [6:33] It's still taking a long time because we had the old obligations, [6:35] but we gradually figured out how to go to a new plan where we wouldn't be stuck with all these pensions. [6:41] These positions are of insourcing jobs that were provided at lower cost before by private partners, [6:50] so we're increasing the cost of the post office. [6:52] During the Postal Service Reform Act, I argued that no funding should be given to USPS [6:56] without changes to its labor practices and costs. [7:01] Instead, no labor changes were made, and now Americans are left holding the bag of an evermore bloated Postal Service. [7:08] The Postal Service has tried to explain away these bad numbers due to the costs that USPS cannot control, [7:14] but the service is spending $9.6 billion on electric delivery vehicles [7:19] and spending nearly $40 billion over 10 years to convert and build certain facilities into hubs [7:25] that so far have resulted in worse delivery and services. [7:29] In order to keep making these infrastructure updates, [7:33] the Postal Service is asked to raise its $15 billion borrowing limit with the Treasury Department. [7:38] Hardly sounds like a success. [7:40] Private sector companies deal with uncontrolled costs all the time, [7:45] including the same factors USPS faces, like inflation, [7:48] and they find a way to provide for their owners and shareholders, [7:52] but they don't do it by adding more union employment. [7:56] USPS would count for the uncontrollable costs in their budget and stop coming to Congress. [8:02] You know, you guys should try to fix the problems instead of keep coming back and asking for more, more. [8:06] This hasn't stopped Congress, though, from throwing even more money at the Postal Service. [8:11] For those counting, that's $120 billion in funding and relief in the past four years alone. [8:17] While $120 billion is already an astounding number on its own, [8:21] when you consider the sum relative to our nation's dismal fiscal condition, [8:25] it suddenly becomes reckless. [8:27] We're over $36 trillion in debt. [8:30] It's time to do something different. [8:32] What we're not seeing is anything different at the Post Office. [8:35] And I, for one, say it's about time we have some reform. [8:41] Thank you, Reckon Member Paul. [8:43] It is the practice of this committee to swear on witnesses. [8:46] So, Mr. Joy, if you'd please stand and raise your right hand. [8:51] You swear the testimony you will give before this committee will be the truth, [8:54] the whole truth, and nothing but the truth. [8:56] So help you God. [8:58] Thank you. [8:59] You may be seated, and you're recognized for your opening remarks. [9:06] Good morning, Chairman Peters, Ranking Member Paul, and members of the committee. [9:10] I appreciate the opportunity to once again discuss the significant progress [9:15] that the U.S. Postal Service is making in accomplishing the objectives [9:18] identified in the Delivering for America plan. [9:21] When I agreed to take the role as Postmaster General, [9:23] the nation was at the beginning of a pandemic, [9:26] and the Postal Service was an organization in crisis, [9:29] facing a diverse array of challenges that put the organization [9:32] on a near-term trajectory to financial and service collapse. [9:37] The Postal Service had lost almost $90 billion, [9:40] was projected to lose another $200 billion over the next 10 years, [9:44] and was about to run out of cash before year-end. [9:47] Our over 31,000 facilities were in shocking, horrible condition, [9:51] with over $20 billion in deferred maintenance [9:53] and ill-equipped for modern-day tasks. [9:56] We had not met our service standards in almost 10 years, [10:00] and had not reduced work hours in over eight years, [10:03] despite significantly reduced volume. [10:06] We had billions of dollars of self-inflicted wounds [10:08] from poorly-evolved package products [10:10] and had an organization and operational strategy [10:12] that had long ago become dysfunctional. [10:16] More explicitly, over 57 percent of our 31,000 post offices [10:19] did not cover the cost of the people that worked at them, [10:22] and 76 percent of our 235,817 delivery routes lost money. [10:28] We ran 55,000 trucks a day, 70 percent empty, [10:33] and had four different networks operating [10:35] at significantly low utilization, wasting billions of dollars. [10:39] This all came to a head in the peak season of 2021, [10:42] when we were overwhelmed and dramatically impacted, [10:46] overwhelmed and dramatically impacted service [10:48] throughout the nation for many months. [10:50] This was the dreadful condition and trajectory [10:52] of the Postal Service prior to the DFA, [10:55] and there was no plan anywhere to do anything about it. [10:58] The DFA plan has five simple directional objectives [11:02] to be accomplished in consideration with the laws and regulations [11:05] that govern the Postal Service today [11:07] and the relevant attributes of our evolving economy, [11:12] environment, geography, marketplace, and competitive landscape. [11:17] These objectives are to improve our operational precision [11:20] and organizational effectiveness, [11:22] to reduce our cost of performance, [11:24] to create reliable and affordable service, [11:26] to grow our revenue and margin on our products, [11:30] to create productive and long-term careers for our employees. [11:34] These initiatives and the commitment to this transformation [11:37] has been embraced by our whole organization, [11:39] and the pace of change and accomplishments are impressive. [11:43] We are a different organization today, [11:45] and I'm impressed by the talent and tenacity of our people [11:47] as they work hard to make the Postal Service the best in commerce [11:50] and public service for many years to come, [11:53] a unique opportunity we have, [11:55] and as the Congress intended when they created us. [11:58] However, times have changed, [12:00] and so has what it takes to be that entity that Congress intended. [12:04] And while we have accomplished a great deal, [12:06] we are at the beginning of an ongoing journey [12:08] to evolve with the nation rather than lag behind. [12:11] In the past, the inability and unwillingness [12:14] to make the necessary changes when required [12:16] is what had caused the condition and trajectory [12:18] of the organization when I arrived here. [12:21] To understand the full picture [12:24] that the advisory opinion contemplates and solves, [12:27] I refer to you to my written testimony. [12:29] However, in summary, [12:30] we have prepared a comprehensive proposal [12:32] that has been responsive to hundreds of questions [12:36] asked of us by the PRC and other parties. [12:40] Let me share some key points as a foundation [12:42] to help set aside the fears and misunderstandings [12:44] that seem to surround the PRC advisory opinion. [12:47] The changes we propose are to the collection, [12:50] not the delivery of mail. [12:52] In fact, we expect delivery times for most mail to improve. [12:56] Your constituents receive far more delivered mail [12:59] than they send, [13:00] and to further isolate the impact of our proposed change, [13:03] it is primarily single-piece, first-class mail [13:06] to which we propose to modify the collection schedule [13:09] and only by a matter of hours. [13:12] In the last 25 years, [13:13] the volume of first-class single-piece mail [13:15] has plummeted from 57 billion pieces to 12 billion. [13:19] Yet the chaotic, costly, and illogical network [13:22] we have been laboring under [13:23] was originally designed for mail, [13:26] but now must be redesigned [13:27] to include the increased package volume [13:29] and redesigned to include the increased package volume [13:34] over an integrated network. [13:35] The survival of mail [13:37] and the postal service itself [13:38] depends on successfully navigating [13:40] this irreversible volume shift. [13:41] Although the proposal analyzes volume and distance [13:47] to proposed schedule changes [13:49] in the collection of single-piece mail, [13:50] it is not a proposal [13:52] that primarily impacts rural communities. [13:55] The savings and operational efficiencies [13:56] achieved here are substantial, [13:58] and I assure you are necessary [13:59] to preserve the universal service obligation. [14:02] The very mandate that policymakers fear [14:04] is being called into question [14:06] is what we are, in fact, saving. [14:07] Please note that any service adjustments [14:10] fall within the existing [14:11] two- and five-day service standards, [14:14] and that the proposal introduces standards [14:16] that are relatable to our customers [14:18] and that they will be based [14:19] on the five-digit zip codes [14:20] we are familiar with. [14:22] The changes proposed create a network, [14:25] create from a network of massive chaos [14:27] and redundancy, [14:29] an integrated mail-in package network [14:30] as required by the recent postal reform legislation, [14:33] thereby correcting for poor operating practices [14:36] and enabling us to compete [14:37] for new revenues and survive. [14:38] In addition, the letter of invitation [14:41] I received for this hearing [14:42] requested that we also discuss transparency [14:45] and accountability responsibilities we shoulder. [14:48] In my written testimony, [14:49] I have detailed for you heavy transparency, [14:51] regulatory, and accountability burden [14:53] under which we labor. [14:55] It is detailed in testimony [14:56] and the weighty attachment [14:58] that reminds the reader [14:59] that we are not a typical government agency. [15:01] We are self-financed [15:02] and independent establishment [15:04] of the executive branch. [15:05] We must operate in many ways [15:07] like a private business, [15:08] as we have, [15:09] and we have many competitors. [15:12] We also have many layers of regulation [15:14] and oversight [15:14] that would cripple a private company [15:16] that also had our scope [15:19] and our public policy mandates. [15:21] This has significance [15:23] as it has paralyzed the postal service of the past [15:25] and the contributing reason [15:26] why we are in the predicament we are in. [15:28] Relatedly, [15:29] I share testimony and attachment [15:31] that details our unfunded mandates [15:33] as an essential and justified, [15:35] as essential and justified [15:37] as our universal service obligation is, [15:39] it comes at a very high cost [15:41] that needs to be reckoned with [15:42] at the same time [15:43] as mail and package volume shift, [15:45] delivery points steadily increase, [15:47] costs climb, [15:47] and pressures not to change [15:49] a single thing about our service persist. [15:52] I welcome the opportunity [15:54] to educate the committee [15:55] on our plans [15:56] to move the organization forward. [15:58] I welcome you on that journey. [16:00] Thank you. [16:01] Well, thank you. [16:04] Mr. General, [16:06] in September, [16:07] I asked for your commitment [16:09] to report to this committee [16:10] on how the Postal Service [16:12] has substantially [16:14] and substantively [16:15] considered [16:16] the Postal Regulatory Commission's input [16:19] on national changes [16:20] that are going to be made [16:22] to the network [16:23] and to service standards. [16:24] You committed at that time [16:26] to provide comprehensive responses [16:28] to any PRC recommendations. [16:31] I'd just like to follow up on that, [16:32] if I may, sir. [16:34] Will you provide this committee [16:37] with a copy [16:38] of your comprehensive response [16:40] to each of the PRC's recommendations [16:42] when they come out? [16:44] Yes or no? [16:45] I don't see why, [16:48] unless there's some regulatory reason [16:51] or not to, [16:52] we will submit our responses [16:55] to the Postal Regulatory Commission [16:57] and I think I'm happy [16:59] to send you a copy [16:59] of our responses. [17:01] So you'll provide that to us? [17:02] Yeah. [17:02] Appreciate it. [17:03] For each PRC recommendation, [17:05] you will provide [17:07] a detailed explanation [17:08] as to whether USPS [17:10] will implement [17:11] the recommendations as well? [17:13] We will answer [17:15] the responses comprehensively. [17:18] So to the extent... [17:20] Including, we asked, [17:21] to the degree [17:22] you will implement [17:23] or not. [17:24] I'm sorry? [17:25] Including the degree [17:26] to which you're going to implement [17:27] or not implement going forward. [17:30] So there's a specific way [17:35] that we go about [17:36] answering questions [17:37] that our legal department [17:38] deals with, [17:39] but from the standpoint [17:39] of the organization [17:40] as a whole, [17:42] whether we submit it in that [17:43] or we announce publicly [17:44] what we're going to do [17:45] at the same time, [17:47] there will be full disclosure [17:48] and transparency [17:49] as to what we're going to do. [17:51] What we're actually going to do. [17:52] Okay. [17:53] Very good. [17:55] The Postal Service [17:56] is required to provide [17:57] quote, [17:58] prompt, reliable, [17:59] and efficient service [18:00] to all communities [18:01] as you're well aware. [18:03] That includes rural areas. [18:05] Rural Americans, [18:06] like my constituents [18:07] in the Upper Peninsula [18:08] of Michigan, [18:09] rely on the Postal Service [18:11] to promptly deliver [18:12] Social Security checks, [18:14] rent payments, [18:15] all sorts of critical mail. [18:17] And the Postal Service [18:18] has announced [18:19] service standard changes [18:20] that would significantly [18:22] impact rural mail. [18:24] Based on the numbers [18:25] the Postal Service [18:26] has filed with the PRC, [18:29] your plan is to slow down [18:30] 68% of single-piece [18:33] first-class mail [18:34] in rural areas. [18:36] And that compares [18:36] to 34% in urban areas. [18:40] You would slow down [18:41] roughly 15% of rural mail [18:43] and upgrade only about 3% of it. [18:46] These are necessary deliveries [18:48] for these communities. [18:49] It would come late. [18:50] So my question for you, sir, [18:51] is how does this slowdown [18:52] of rural mail, [18:54] if implemented, [18:55] comply with the Postal Service's [18:56] obligation to provide service [18:59] and prompt service [19:00] to all communities? [19:03] So I'm not familiar [19:04] with those numbers [19:05] that you cite. [19:06] First off, [19:08] delivery of mail [19:10] to rural areas [19:11] and to all areas [19:13] will not change. [19:14] And in many cases, [19:15] in a few cases, [19:18] about 10% or 15% [19:21] will in fact improve. [19:23] Delivery is not being affected. [19:26] Okay? [19:26] We are talking about [19:27] the collection process [19:29] of single-piece [19:30] first-class mail only. [19:33] Right? [19:34] Single-piece first-class mail [19:35] was 59 billion pieces [19:38] 20 years ago, [19:39] 23 years ago. [19:40] It's down to 12 billion pieces now. [19:43] And we run [19:43] the same collection processes [19:45] for single-piece [19:47] first-class mail [19:48] that drives significant cost [19:49] and take up [19:51] a significant amount [19:52] of time [19:53] in moving the overwhelming [19:55] amount of volume [19:56] that moves through the system. [19:57] So I'm not anticipating [19:58] on the delivery side, [20:00] I'm not anticipating [20:01] any slow. [20:02] I'm anticipating [20:03] improvement [20:06] in the delivery times [20:07] because most mail originates [20:09] within the 50-mile radius [20:11] of the operations [20:13] we're talking about. [20:14] And it's the collection [20:15] of single-piece mail [20:18] going out of these areas [20:21] that could be slowed down [20:22] somewhere between 12 and 24 hours. [20:26] Plans to reduce truck trips [20:33] in areas across the country, [20:34] collecting mail less often [20:36] from outlying facilities [20:38] and therefore reducing services. [20:41] You tested this initiative [20:42] in the Upper Peninsula [20:43] of Michigan [20:44] and my constituents [20:45] have now reported delays [20:46] to important mail [20:48] like insurance claims, [20:49] rent checks, [20:50] the list goes on. [20:51] There have also been [20:52] delayed prescriptions [20:53] where extra days [20:55] certainly matter. [20:57] And cities that were [20:58] sending some samples [20:59] to the EPA [21:00] as a result of water testing, [21:03] it requires quick turnaround. [21:04] They can no longer do that [21:05] because they can't rely [21:06] on the Postal Service [21:07] to get that mail [21:08] to them on time. [21:10] The USPS has said [21:12] that this transportation [21:13] optimization was a pilot. [21:15] But my question for you [21:16] is are you planning [21:17] to make that permanent [21:18] up in the UP? [21:21] We're planning. [21:22] So that was an initiative [21:23] called Local Transportation [21:25] Optimization. [21:28] We rolled that out [21:30] in 12 locations [21:31] around the nation. [21:33] Whether service, [21:35] the incidents [21:36] that you were speaking about [21:37] were related, [21:38] consequences were related [21:39] to that change or not, [21:40] I cannot comment on [21:42] because there are other reasons [21:43] why service fails [21:47] or why expectations [21:48] are not met [21:49] in terms of the changing environment. [21:52] There are a lot of places [21:54] where we exceed in service [21:56] and part of the rationalization [21:58] of the network [21:59] is to meet the standard. [22:02] But LTO, [22:05] we went back [22:06] and looked at it [22:07] and it was not consequential [22:08] enough [22:09] and executable enough [22:11] to get the amount [22:12] of cost savings [22:13] that we needed [22:14] and we've changed [22:15] to the more regional approach [22:16] that we're taking [22:17] going forward. [22:19] That's enough [22:20] in our filing. [22:22] So the concept [22:23] is the same, [22:24] the area is just bigger [22:25] that we're going to deal with. [22:28] The Postal Service [22:29] released its strategic plan [22:31] in 2021. [22:32] It called [22:32] for postal reform [22:34] which was completed. [22:35] It also called [22:36] for executive actions [22:37] to change [22:38] how the Office of Personnel Management [22:39] calculates [22:40] Postal Service [22:41] pension obligations. [22:43] I sent a letter [22:44] to the White House [22:45] pushing for this change [22:46] and OPM simply [22:47] uses outdated accounting rules [22:50] for postal employees [22:51] as you know [22:52] compared to other employees [22:53] and that puts extra cost [22:55] onto the Postal Service. [22:57] This could be changed [22:58] and I believe [22:59] could save billions of dollars [23:01] while also saving pensions. [23:03] So my question for you sir [23:05] is are you still in favor [23:06] of making this administrative change [23:08] and could you explain [23:09] to this committee [23:10] why that would be important? [23:13] So there's two areas [23:15] of our pension [23:18] that we are interested. [23:21] One is the CSRS reallocation [23:24] when we were separated [23:26] as an independent agency [23:30] from the federal government. [23:33] We have calculated [23:35] a significant shifting [23:38] of the federal government's burden [23:40] for its retirees [23:42] at the time [23:43] onto our balance sheet [23:45] and we have [23:46] and this is one of the things [23:47] you helped us with [23:48] trying to [23:49] you know [23:49] writing to get [23:51] actually executive action [23:52] to make that change [23:55] which [23:55] the Office of Legal Counsel [23:58] has said [23:59] that that requires [24:00] legislative change [24:01] instead of executive change. [24:04] So but yes [24:04] we do feel [24:05] the calculations show [24:07] that we were overburden [24:09] when we moved [24:09] when we shifted [24:10] when we shifted [24:11] when we separated [24:14] from the you know [24:15] from the government. [24:16] There are other things [24:18] within our retirement plan. [24:19] I have [24:20] I expect to have [24:21] 620, 610,000 people [24:26] next year [24:27] in our organization [24:28] and I'll have [24:28] 710,000 people [24:30] on my retirement plan. [24:32] There are things [24:33] within our investment structure [24:35] that [24:36] are killers [24:38] you know [24:39] to us. [24:39] We [24:39] this is [24:43] public [24:44] this is [24:44] private [24:45] this is enterprise [24:46] services money [24:47] that we have [24:48] aggregated [24:49] and put into the [24:50] into the foundation [24:52] where you don't [24:52] we have to invest it [24:53] as with the federal government [24:55] and we don't get the [24:56] you know [24:56] we don't get the returns [24:57] like a TVA [24:58] or an Amtrak. [24:59] That's one of the other things [25:00] that we're [25:01] we're looking [25:02] to do. [25:04] And then there's [25:04] some other [25:05] some other subtle [25:06] magic [25:07] that OPM does [25:08] with their calculations [25:10] that are punitive [25:11] to us relative [25:12] to the age group [25:13] the age calculations [25:15] that they use [25:15] for you know [25:16] for us [25:17] and so forth. [25:18] It is a huge issue. [25:20] We had [25:20] it was 80% [25:21] of our loss [25:22] this year [25:23] in my projections [25:24] to break even [25:25] over the last three years [25:26] we had an additional [25:27] $10 billion [25:28] of bills [25:30] from the federal government [25:32] on our retirement [25:33] you know [25:33] on our retirement plan [25:35] that we were not [25:38] that we were not expecting [25:39] and we're well above [25:41] the projections [25:42] in the thing. [25:43] It is [25:44] it's no different [25:45] than any major corporation [25:47] that found themselves [25:49] in these [25:50] you know [25:51] particular [25:51] these particular constraints [25:53] when they had [25:54] defined benefit plans [25:56] however [25:56] in some cases [25:57] they were able [25:58] to raise their prices [25:59] and so on and so forth [26:00] or do their investments [26:01] so it concurs [26:02] with the changing marketplace. [26:04] We had nothing [26:05] available to us [26:06] we could not raise [26:07] our prices effectively [26:08] for the changes [26:09] in the economy [26:09] and we could not [26:10] rationally put investments [26:12] with regard to [26:13] meet that obligation. [26:14] so it is an obligation [26:16] that is [26:17] will continue to [26:18] continue to [26:20] be you know [26:21] be detrimental [26:22] to the survival [26:24] of the organization. [26:25] Thank you. [26:26] Ranking Member Paul [26:27] recognized for your questions. [26:30] You mentioned [26:30] in your testimony [26:31] that the post office [26:32] is different [26:33] than other areas [26:33] of government [26:34] that it has to [26:35] operate [26:36] like a private business. [26:38] You also mentioned [26:39] that about [26:40] 80% of the volume [26:42] of first class mail [26:43] has gone down [26:44] over time. [26:45] Can you think [26:46] of a private business [26:47] where 80% [26:49] of what they're [26:49] you know [26:50] doing to make money [26:52] is going down [26:53] in volume [26:53] that would actually [26:54] increase their employees? [26:56] Yeah. [26:57] So Senator [26:58] you keep asking [26:59] I mean [26:59] I didn't make [27:00] the laws [27:00] that follow [27:01] that organized [27:02] the United States [27:03] Postal Service. [27:04] Okay. [27:05] I came in [27:05] as I said [27:06] to the condition [27:07] that we had [27:08] and I'm trying [27:09] to fix it. [27:10] Now you exaggerate [27:12] the hiring aspects. [27:14] I am 20,000 people [27:16] less in employment [27:17] today [27:17] than when I walked [27:18] in the door. [27:19] Okay. [27:20] I burned 50 million [27:21] less work hours [27:22] over last year [27:24] than we did [27:24] the year [27:25] I walked in the door. [27:26] Is there more [27:27] or less work [27:28] being done [27:28] by contractors [27:29] versus government employees? [27:31] That's a good point. [27:32] I was a contractor [27:33] in that industry [27:34] and again [27:35] I walk into [27:36] the situation [27:36] I had. [27:37] The contractors [27:38] that we had [27:38] and the contracts [27:40] that we had [27:40] and the locations [27:41] that we had [27:42] were detrimental [27:43] to the organization. [27:45] So I had two points [27:45] to get cost out. [27:47] Do I shut down [27:48] all my operations [27:49] where all my people are [27:50] or do I bring in [27:52] these contracting operations? [27:54] I have changed [27:54] huge contracts [27:55] from our [27:57] Priority Mail system. [27:59] I know of no one [28:00] in private practice [28:02] or investors [28:03] who give advice [28:05] through a corporate board [28:06] who would say [28:06] you have a declining [28:08] business model [28:09] we're going to increase [28:09] the numbers [28:10] but then when you have [28:11] a choice [28:12] of hiring contractors [28:14] that won't be paid [28:15] the same wages [28:16] or pension benefits [28:17] or health care benefits [28:19] that you pay your employees [28:20] you're up 190,000. [28:23] You've insourced [28:23] 190,000 jobs [28:25] and it's just [28:27] sort of inexplicable. [28:28] The whole point [28:30] of the reform [28:32] of shifting the cost [28:33] it's not really a reform [28:34] it's a shell game [28:35] we just took a bunch [28:36] of things [28:37] that are still costs [28:38] on your books [28:38] and we put them [28:39] on somebody else's books [28:40] somewhere else in government [28:41] it's still a massive [28:42] cluster [28:44] in a way [28:45] that the debt problem [28:46] is just shifted over [28:47] to another account [28:48] but in doing that [28:50] the main thing [28:50] you were trying [28:51] to get away from [28:52] was health care costs [28:53] and pension, right? [28:55] And so if you compare [28:56] a contractor [28:57] or a contracted employee [28:59] to a government employee [29:02] an insourced employee [29:03] and you compare [29:04] the health costs [29:05] and the pension costs [29:06] they're dramatically [29:08] higher for insourced [29:09] so by increasing [29:10] your number of people [29:11] who work for the government [29:12] as opposed to contractors [29:13] you're compounding [29:15] the same problem [29:15] you were here with us [29:16] three years ago [29:17] saying we can't handle [29:18] all these other expenses [29:20] we need to shift them [29:21] somewhere else [29:21] and so the reform package [29:23] did that [29:23] but in contrast [29:25] then you can continue [29:26] to hire more people [29:27] instead of saying [29:28] well we have all these [29:29] extra costs [29:30] associated with [29:31] government labor [29:32] why don't we hire [29:33] labor outside of the government [29:35] and use contractors? [29:37] So in isolation [29:38] on one element [29:40] of the issue [29:41] which you seem to be [29:42] focused on [29:42] perhaps you're right [29:44] okay [29:44] but I've come out [29:45] of industry [29:46] I've been on boards [29:47] I've worked [29:49] I built an organization [29:50] in this similar space [29:51] with 20,000 people [29:52] worked in an organization [29:53] with 100,000 people [29:55] okay [29:55] and have walked [29:56] into a situation [29:59] that had varying activities [30:01] going on [30:01] inefficiently across [30:03] across its operation [30:04] but I would argue [30:05] you would have treated [30:05] your own business differently [30:06] I have not converted [30:06] 140,000 people [30:08] to full-time [30:09] your business was successful [30:10] though [30:10] not by doing [30:11] the decisions [30:12] you're making now [30:13] this wouldn't have [30:14] helped the private business [30:15] I have to make decisions [30:17] within the environment [30:17] I have [30:18] if I move [30:18] change a collection box time [30:20] on a blue box [30:21] I have the rage of Congress [30:25] bearing down on me [30:27] okay [30:27] so there are trade-offs [30:28] that one has to make [30:29] in this step [30:30] at the end of the day [30:31] we have requirements [30:32] to have about 20% [30:33] of our workforce [30:34] be pre-career [30:36] 80% of our workforce [30:38] you're delivering less mail [30:40] you need a smaller organization [30:41] we're actually growing [30:42] in the package business [30:43] the objective here [30:45] is to create [30:45] an integrated mail [30:46] and package network [30:47] an integrated mail [30:48] and package network [30:49] means less places [30:50] less contractor places [30:52] less of our own places [30:53] and putting people [30:54] it's hard to point [30:55] towards success [30:56] when the debt last year [30:57] was 6.5 billion [30:58] and this year it's 9.5 billion [31:00] that doesn't look like success [31:01] under any sort of metric [31:03] it looks like it's getting worse [31:04] if we spend [31:05] the reason why labor [31:06] is an important part of this [31:08] is it's estimated [31:09] that the labor is 80% [31:11] of the cost [31:11] of doing business [31:12] for the post office [31:13] for UPS [31:15] which is unionized [31:16] but a private union [31:18] versus a government union [31:19] it's about 50% [31:20] for FedEx [31:22] who's non-unionized [31:23] the cost of labor [31:24] to the business [31:26] is about 38% [31:27] so there are cost savings [31:29] by being outside [31:30] of government unions [31:31] frankly [31:32] even private unions [31:33] have some cost savings [31:34] but when we [31:36] have a hole [31:37] and we see a problem [31:38] we try to change it [31:39] like [31:39] you know [31:40] we have a pension problem [31:41] in Kentucky [31:41] so we just simply said [31:43] the new hires [31:44] would not be in the pension system [31:46] or get a different deal [31:47] we understood [31:48] that the previous hires [31:49] would have to get their pension [31:51] the new people [31:51] would come under a new contract [31:53] and we'll dig our way [31:54] out of the hole [31:55] and it's going to take us [31:56] 20, 25 years [31:57] to dig our way out of it [31:58] but we began doing it [32:00] by actually offering [32:01] defined contribution [32:03] as opposed to defined benefit [32:04] you sort of did this [32:07] and shifted the cost [32:08] but now we're getting more people [32:09] we're getting more government workers [32:10] and that's where the problem originated [32:12] was too many benefits [32:14] to government workers [32:15] now [32:15] I don't know [32:16] I don't know [32:16] I agree again [32:17] with that premise [32:19] that that's where the problem [32:20] originally [32:20] the problem [32:21] is labor still about [32:22] 80% of your cost [32:23] is labor still [32:24] 80% of the cost [32:26] is still 80% of our cost [32:27] so we have a plan [32:30] to try and make labor [32:32] to make the labor cost [32:37] that we have work [32:38] and that means [32:40] to create an integrated operation [32:43] we have 500 different locations [32:46] around the organization [32:48] that we were processing mail [32:49] including our contractors [32:50] I'm trying to get down to 200 [32:52] Do you have the ability [32:54] to hire new people [32:55] under either a different pension [32:56] or a different healthcare system [32:57] or your op [32:58] do you have the ability [32:59] to hire new workers [33:00] for the government [33:01] under a different pension [33:03] or different healthcare arrangements [33:04] than the previous [33:04] you had to hire them [33:06] under [33:06] it's a deal [33:06] the union commands [33:08] what the structure is [33:09] and you have to stay the same [33:10] right [33:11] well you [33:11] the senate [33:12] and the house [33:13] and administrations [33:14] when forming [33:15] the United States Postal Service [33:16] made these rules [33:17] that we have [33:18] you're exactly right [33:19] I did not [33:19] you're exactly right [33:21] and then [33:21] when we looked at the reform [33:23] that was my suggestion [33:24] is if labor is 80% of your cost [33:27] you have to do something [33:28] about your labor cost [33:29] either outsource it [33:30] or what you need to do [33:32] is provide a different alternative [33:34] through pension [33:34] or through healthcare [33:35] but we didn't do any of that [33:37] all we did [33:38] was the shell game [33:39] of taking all your costs [33:41] and sticking it somewhere else [33:42] I disagree [33:42] how about [33:43] we stop processing [33:44] 20 million packages [33:45] a day by hand [33:46] all right [33:47] how about we bought [33:47] some conveyors [33:48] okay [33:49] how about you [33:49] show us some cost savings [33:51] I [33:52] we saved [33:53] two and a half billion dollars [33:54] in costs [33:55] and 1.4 billion dollars [33:56] the debt went from [33:57] 6.5 to 9.5 [33:59] that's right [33:59] we had 20% inflation [34:00] and I had fixed prices [34:02] so did everybody else [34:04] but not everybody else [34:05] in the private marketplace [34:06] treating their business [34:07] like a private entity [34:08] lost an extra 3 billion [34:10] so there just [34:11] it just isn't a success story [34:13] and it's not your fault [34:14] what would you like you to do [34:14] it's not [34:15] I'm not blaming it all on you [34:17] but you're constrained by things [34:18] but to say it's not a problem [34:20] I think is [34:21] not to be [34:22] you know [34:24] just not to be honest [34:25] with yourself [34:25] or with everybody else [34:27] I've never said [34:27] it's not a problem [34:28] I've never said it's not a problem [34:28] trying to find a fix [34:29] a direction [34:30] it's a huge problem [34:31] and it's the way government works [34:33] and government just doesn't work very well [34:35] so we should try to minimize government [34:36] one way to minimize government [34:38] is not to hire more government workers [34:40] make government smaller [34:41] hire private workers [34:42] because private workers [34:44] are more subject [34:45] to the marketplace [34:46] and you would say to a private worker [34:48] we can't keep offering the same pension [34:50] we've done for 40 years [34:51] we can't offer the same health care [34:53] that we've done for the last 40 years [34:54] so I don't think we're doing enough [34:58] I think we're going in the wrong direction [35:00] my goal is to get the postal service workers [35:04] to operate productively and efficiently [35:09] and that's by giving them the tools [35:12] and the facilities [35:13] and the processes [35:14] and the inspiration [35:16] to move forward [35:17] from the standpoint of service [35:21] and cost effectiveness [35:24] of the labor dollar [35:25] I think there is [35:28] there is much improvement [35:29] that we have made [35:30] and much improvement [35:31] that we can get to [35:32] there are other burdens [35:33] around the organization [35:35] that I agree with you [35:36] are a tough [35:37] tough hill to climb [35:39] okay [35:40] but the operational aspects [35:42] and the growth aspects [35:43] of the organization [35:44] the competitive aspects [35:45] that it could [35:47] could have deployed [35:48] 20 years ago [35:49] are what we're trying to do now [35:52] and while you are all [35:54] messing around [35:55] with what the legislation should be [35:57] I'm trying to deliver mail [35:58] and packages [35:59] cost effect [35:59] in the best way possible [36:01] like a private industry would [36:02] like a UPS would [36:03] that's what I have an expertise in [36:05] and that is what my target is [36:07] operationally [36:08] and growth wise [36:09] is that the postal service [36:10] should act like UPS [36:11] and FedEx [36:12] with regard to all these other things [36:14] that you all share responsibility in [36:16] okay [36:17] I'm happy to work with you [36:19] like I worked with you [36:19] Senator Peters [36:20] on getting the Postal Reform Act passed [36:22] I'm happy to do that [36:23] let's do it [36:24] okay [36:25] but right now [36:25] I know what I'm doing [36:27] with regard to transit [36:28] consolidating the organization [36:30] trying to move the organization forward [36:33] to get work hours out [36:34] which we have [36:35] to get transportation costs out [36:37] which we have [36:37] right [36:38] and to grow the business [36:39] which we have [36:40] and we will continue down that path [36:42] until somebody hauls me out of here [36:44] Senator Carper [36:47] you're recognized for your questions [36:48] thanks very much [36:49] and welcome [36:50] Mr. Joy [36:51] good to see you [36:52] thank you for your being here [36:53] there are several people [36:54] in the audience behind you [36:55] that we've worked with [36:56] in the past [36:57] it's nice to see them [36:58] one of the [37:00] one of the [37:01] quotes [37:02] I don't know whose quote this is [37:04] but in adversity lies opportunity [37:05] in adversity lies opportunity [37:08] we [37:09] I'm always [37:09] that's one of my guiding principles [37:11] in life [37:12] and the [37:13] in the [37:15] the adversity [37:16] that's faced [37:17] by the [37:18] the postal service [37:19] there are [37:20] there are opportunities [37:21] as well [37:22] and I think you're trying to seize the day [37:24] on [37:24] on some of those [37:25] there are other [37:27] I'll say competitors [37:29] to the postal service [37:30] who are in [37:31] the package business [37:32] and [37:33] they don't deliver mail [37:35] but they deliver a lot of packages [37:36] and [37:36] and [37:37] you're [37:37] I know you guys are delivering a lot more packages [37:39] as [37:39] as [37:40] as well [37:41] but some [37:42] some of [37:42] some of those [37:43] companies [37:45] have decided [37:46] over [37:47] the last [37:48] five [37:48] ten years [37:49] that they [37:50] want to phase out [37:51] their diesel engines [37:52] and their gasoline engines [37:54] and [37:54] but have [37:55] mail [37:57] delivered in vehicles [37:58] that [37:59] do not [38:01] create [38:02] you know [38:02] carbon [38:03] carbon wax [38:03] or greenhouse [38:04] gases [38:05] they [38:06] they've done [38:06] and they didn't [38:07] make that conversion [38:08] those companies [38:09] didn't make the conversion [38:10] because of [38:11] they're [38:11] somehow concerned [38:13] about the planet [38:13] burning up [38:14] and [38:14] you know [38:15] because of environmental concerns [38:16] they did it [38:17] because they [38:18] they felt that they could actually [38:19] there's an economic argument [38:22] they thought that they could do this [38:23] to deliver [38:24] their car [38:25] their [38:25] their products [38:26] in a more cost effective way [38:29] we [38:30] I think when we passed a big [38:32] postal bill [38:33] a year or two ago [38:34] a couple years ago [38:35] we [38:36] tried to provide some money [38:38] for the postal service [38:39] to [38:39] as [38:40] your vehicles are very old [38:41] and as you're making that [38:43] transformation [38:44] and modernizing your fleet [38:45] to [38:46] to [38:47] make sure you're buying [38:49] some vehicles that [38:50] could be hybrids [38:52] it could be electric vehicles [38:53] to [38:54] to save money [38:55] and not [38:56] not just because it was [38:57] the right [38:57] you're in good environmental storage [38:59] could you give us [39:00] an update please [39:02] on [39:02] the rollout of [39:03] postal [39:04] vehicle hybrids [39:06] electric vehicles [39:07] and [39:08] some of the challenges [39:09] you've encountered [39:10] and [39:11] how is [39:12] the postal service [39:13] finding this transition [39:14] both [39:15] on the economic side [39:17] and on the environmental side [39:18] thank you senator [39:20] so as you [39:22] as [39:23] as you [39:23] said we have over [39:25] 200 [39:26] 220,000 vehicles [39:28] that are over 30 years old [39:29] long exceeded [39:30] their useful life [39:31] were burning [39:32] up on the street [39:33] when I [39:33] when I [39:34] when I got here [39:36] we have committed [39:38] both [39:39] to [39:40] ice vehicles [39:41] electric vehicles [39:44] 106,000 vehicles [39:47] that will be [39:48] bringing into the system [39:49] over the next four years [39:50] of which [39:50] 66,000 of them [39:52] will be [39:53] will be [39:54] electric vehicles [39:55] the [39:57] so far to date [39:59] we have [40:01] acquired [40:03] coming in this year [40:04] we'll have about [40:04] 10,000 electric vehicles [40:06] coming [40:07] now [40:07] we're [40:08] there's two sides of that [40:09] there's the vehicle itself [40:10] we have unique requirements [40:12] because most of our vehicles [40:14] have to be right-hand drive [40:15] as opposed to left [40:16] so we can't go commercial [40:17] off the shelf [40:18] for many [40:19] so we [40:20] we brought [40:20] 10,000 [40:21] you know [40:21] 40 [40:22] 40 transits [40:23] that are coming in [40:25] and we [40:25] next year [40:27] we'll start receiving [40:27] a high volume [40:28] of our next generation [40:29] delivery vehicle [40:30] which is the right-hand side vehicle [40:32] and [40:33] most of those [40:34] will be [40:34] electric vehicles [40:35] over the rest of the years [40:37] there's two sides to that [40:38] we have to build out the electric [40:39] vehicle infrastructure [40:41] which is a [40:42] big and long [40:44] you know [40:44] multi-year project [40:45] and there's imbalances right now [40:48] in terms of getting the [40:49] you know [40:50] commercial [40:50] off-the-shelf vehicles [40:52] that are specifically [40:53] left-hand drive [40:54] into the system [40:55] but we should be through that [40:57] in the [40:57] you know [40:58] within the next [40:59] 8 to 12 months [41:01] to have those [41:02] deployed [41:03] but we are [41:04] we are moving forward [41:05] you know [41:06] at pretty [41:07] in a pretty good pace [41:09] we got the president's [41:11] sustainability award [41:13] for rollout of electric [41:14] electric vehicles [41:15] we are now looking at [41:17] when originally [41:17] we looked at [41:18] a one-for-one [41:19] charging station [41:20] to vehicle [41:21] relationship [41:23] we're looking to [41:24] expand that [41:25] we're finding [41:25] some of our routes [41:26] are consuming [41:27] can go [41:28] two or three days [41:29] without being recharged [41:30] we're putting that [41:31] into the model [41:32] and that's going to help [41:33] accelerate [41:33] you know [41:34] accelerate the deployment [41:35] we're looking at clustering [41:36] around some of our [41:37] larger delivery units [41:38] where we have [41:40] two and three hundred [41:40] charging stations [41:41] for vehicles there [41:42] you know [41:44] doing alternate days [41:45] where we have [41:46] the ability to do that [41:47] so [41:47] the team [41:48] knew absolutely [41:49] nothing about [41:51] including myself [41:52] about electric vehicles [41:53] when we got here [41:53] I think we're pretty [41:55] formidable [41:56] and we'll [41:56] we'll rise on that [41:57] and the other thing [41:58] I do think [41:59] that in my work here [42:01] and in the other [42:01] environmental things [42:02] that we've gone through [42:04] I do think [42:04] there is [42:05] I think the statistics [42:09] expect [42:10] 20% of the people [42:11] order [42:11] how their packages [42:12] get delivered [42:13] based on the environment [42:14] and we expect that [42:16] to grow [42:16] and we want to be [42:18] the preferred supplier [42:20] in the [42:20] package delivery business [42:23] for a certain size package [42:24] for a certain distance [42:25] and we need to [42:27] we're paying attention [42:28] to that [42:28] in our marketing [42:29] in terms of [42:29] good for you [42:31] I'm going to have to [42:32] cut you off [42:33] just for just a moment [42:34] here [42:34] vote by mail [42:35] just one other thing [42:38] no no no [42:38] I'm running out of time [42:40] I'm sorry [42:40] thank you for your responses [42:42] and thank you for [42:43] your commitment [42:44] to actually [42:44] doing the right thing [42:47] but also the [42:47] economically right [42:50] smart thing [42:50] the other question [42:52] I want to quickly ask [42:53] we've just come out [42:54] of an election season [42:55] as we know [42:55] and people all over [42:57] the country [42:57] have been voting [42:58] for federal state [42:59] local candidates [43:00] are against them [43:02] we [43:03] as it turns out [43:05] people [43:05] people [43:06] a lot of people [43:07] voting by mail [43:09] and they're [43:10] they're finding [43:11] that they like it [43:12] in fact the majority [43:13] I think the clear majority [43:13] of people don't vote [43:14] in person anymore [43:15] and what kind of [43:16] opportunities is this [43:17] provided for the [43:18] postal service [43:18] and have we seized [43:20] the day to take [43:20] advantage of that [43:21] so I didn't hear [43:23] the last part [43:23] have we done what [43:24] how has the postal [43:26] service seized the day [43:27] what the voters [43:28] are looking for [43:29] or easy ways [43:30] they want to vote [43:30] but they don't want [43:31] to go stand in line [43:32] and the postal service [43:34] can help with that [43:35] how are we doing [43:35] in that regard [43:36] so it's an interesting [43:37] I mean we [43:38] first of all [43:39] we perform well [43:40] we've just put out [43:41] our report [43:41] with 99.8% [43:43] of the ballots [43:44] getting you know [43:45] within seven days [43:46] so on and so forth [43:47] the [43:49] the [43:49] it was less [43:51] than in 2020 [43:52] voting was less [43:54] than 2020 [43:54] I would say [43:56] that this is [43:58] there are opportunities [44:02] to make this better [44:04] right [44:05] we have [44:06] you know [44:08] we get to a point [44:09] where we hope [44:10] where two things [44:11] can be correct [44:12] we deliver 99% [44:14] of the ballots [44:14] on time [44:15] and you still find [44:16] a thousand ballots [44:18] in place [44:18] that didn't make it [44:19] and that becomes [44:21] a big [44:21] that's a big issue [44:22] and it's not [44:23] necessarily because [44:24] of the postal service [44:25] it could be [44:26] but there's [44:27] 8,000 different [44:29] voting districts [44:30] across the nation [44:31] across 50 states [44:32] with different rules [44:34] and different types [44:35] of mail pieces [44:35] and different [44:36] different requirements [44:38] we don't count [44:39] we don't say [44:39] when the vote [44:40] has to be in [44:41] when [44:41] if it gets counted [44:42] and all that [44:43] and that creates [44:44] that creates [44:45] a lot of [44:46] ugly conversation [44:49] you know [44:51] between [44:51] you know [44:52] our organization [44:52] and [44:53] and state [44:54] state [44:54] secretaries of state [44:56] and so forth [44:58] simple accusations [45:00] of something [45:01] being laid [45:01] on the mail process [45:02] creates [45:03] you know this [45:04] a lot of [45:06] a lot of emotion [45:06] so I think [45:07] long term [45:08] we did an excellent job [45:10] it was a big [45:10] big [45:11] you know [45:11] effort on us [45:12] I think [45:13] a standard [45:15] you know [45:15] mail piece [45:16] would be helpful [45:17] to us [45:18] long term [45:20] we're looking at ways [45:22] to work with [45:22] the different states [45:23] the different election [45:24] offices [45:24] to get into [45:25] a specific [45:27] contract [45:27] type of [45:28] basis [45:28] to [45:29] you know [45:30] to do that [45:30] but yes [45:32] vote by mail [45:33] is here to stay [45:34] we've done a good job [45:35] election officials [45:37] have done a good job [45:38] but it's still not [45:39] where it needs to be [45:40] because [45:41] if we want [45:43] 100% [45:43] guaranteed performance [45:45] we need to do more [45:46] together [45:47] thanks very much [45:48] thank you [45:49] senator Hassan [45:50] recognized for your questions [45:51] thank you very much [45:52] mr. chair [45:53] and I want to thank you [45:53] and the ranking member [45:54] for holding this hearing [45:56] welcome [45:56] postmaster general [45:58] it is good to see you [45:59] I want to focus a bit [46:01] on the ways [46:01] that you can work [46:02] to strengthen mail service [46:04] and I want to also [46:05] share my concerns [46:06] about some of the proposals [46:08] that you have [46:08] that would make [46:09] mail service worse [46:10] in my state [46:11] for granted staters [46:12] the postal service [46:15] has a plan [46:16] to move some postal operations [46:18] from manchester [46:19] new hampshire [46:19] to boston [46:20] i oppose the plan [46:22] because implementation [46:23] of it [46:23] will harm [46:24] service [46:25] and delay delivery [46:27] i also oppose [46:28] moving operations [46:29] from white river junction [46:31] vermont [46:31] to hartford [46:32] connecticut [46:33] because white river junction [46:34] serves granite staters [46:36] in the northern part [46:36] of new hampshire [46:37] we know from postal service [46:39] inspector general reports [46:41] that processing center [46:42] consolidations [46:43] like the ones [46:44] you're considering here [46:45] including those [46:46] in virginia [46:47] and georgia [46:47] resulted in [46:48] quote an immediate [46:50] and significant decline [46:51] in service performance [46:52] close quote [46:53] and we know too [46:55] that those declines [46:56] continued for several months [46:57] and that these facilities [46:58] are still struggling [47:00] to meet their on-time [47:01] delivery goals [47:02] i have also repeatedly [47:04] heard serious concerns [47:05] from postal employees [47:06] and customers [47:07] that your plans [47:08] would slow delivery [47:09] service in new hampshire [47:11] and just to be clear [47:11] taking a collection center [47:13] a processing center [47:14] from manchester [47:15] to boston [47:16] moves at at least [47:17] a two-hour drive time [47:18] both from the collection [47:21] point into the processing center [47:22] and then back up [47:23] to new hampshire [47:23] despite pausing [47:25] your manchester [47:26] and white river junction [47:27] consolidation plans [47:28] earlier this year [47:29] you haven't sought [47:30] an independent analysis [47:31] of how these plans [47:33] will impact granite staters [47:34] so yes or no [47:36] will you ask [47:36] the postal regulatory commission [47:38] to analyze [47:39] the service impacts [47:40] of moving operations [47:42] from manchester [47:42] to boston [47:43] and white river junction [47:44] to harvard [47:45] to hartford [47:46] and if the postal [47:47] regulatory commission [47:48] finds [47:49] that moving operations [47:50] from manchester [47:51] to boston [47:51] or white river junction [47:52] to hartford [47:53] will cause significant [47:54] disruptions [47:55] will you stop the plan [47:56] from moving forward [47:57] if you're asking me [47:59] if i would specifically [48:00] ask the postal regulatory [48:01] commission [48:02] to opine on that [48:03] to have an [48:05] independent analysis [48:07] done [48:07] would not [48:08] so you won't have [48:10] that done [48:10] i'm going to continue [48:12] to strongly oppose the plans [48:13] especially in the absence [48:15] of an independent review [48:16] of the service impacts [48:17] in new hampshire [48:18] because common sense [48:19] and my own familiarity [48:21] with the whole region [48:22] tells me that this will [48:23] slow down service [48:24] in considerable ways [48:25] how are you going [48:27] to continuously monitor [48:28] service [48:29] as operations transition [48:30] from manchester [48:31] to boston [48:32] or from white river junction [48:33] to hartford [48:34] and if and when delays [48:35] occur [48:36] how are you going to [48:37] rectify them [48:37] that's a [48:38] that's a good question [48:40] and that is something [48:41] that we have amped up [48:42] considerably [48:43] in terms of [48:45] operational reviews [48:47] performance excellence [48:48] on site [48:50] and so forth [48:51] so i can [48:52] i can tell you [48:54] that we have people [48:55] looking at [48:55] every bit of performance [48:58] in all of these moves [49:00] now when we have [49:01] response teams [49:02] ready to [49:03] you know [49:05] to jump in [49:05] and make the necessary [49:06] corrections [49:07] well what if [49:08] what if your monitoring [49:09] tells you that it was a mistake [49:10] yeah [49:11] to take it from manchester [49:12] to boston [49:13] because it's going to delay [49:15] delivering considerable ways [49:16] again i'm not you know [49:17] a mistake [49:18] you may think it's a mistake [49:20] and we may not think [49:21] it's a mistake [49:22] a delay [49:23] a change in this [49:23] change in service [49:25] and i don't know the specifics [49:26] of of of right now [49:28] off the top of my head [49:29] in manchester [49:30] we will have a service standard [49:32] that is good for the whole nation [49:33] and we will meet that service standard [49:35] okay [49:36] and and because my time is limited [49:38] i hear you on that [49:39] and i hope you are right [49:41] but i believe you aren't [49:42] and the reason is [49:43] if you slow down collection [49:45] if you do collection less frequently [49:46] and it takes longer [49:48] to drive mail [49:49] from one place [49:50] to the processing center [49:52] than it did before [49:53] and you're doing less collection [49:55] and it's going to take longer [49:56] to get it back to the state [49:57] where you need to deliver [49:58] um my common sense tells me [50:01] that is going to delay service [50:02] let me move on to another issue [50:04] i think you're double counting [50:05] some of that time [50:06] well since i'm really familiar [50:08] with the drives [50:09] and i'm pretty familiar [50:11] with the terrain [50:11] and i'm listen to my postal [50:13] uh employees a lot [50:14] because they're really smart people [50:16] and they're familiar with it too [50:17] um and i would suggest [50:19] you might want to talk with them [50:20] but let me let me move on [50:22] to my employees all the time [50:23] mr dejoy we have limited time [50:25] and so i'm going to move on [50:26] to my next question [50:27] um while you have focused [50:29] on making large-scale [50:30] operational changes [50:31] some smaller changes [50:33] and investment in technology [50:34] can have significant [50:36] and positive impacts [50:37] because they will improve [50:39] employee safety [50:39] they will boost morale [50:40] and they will improve [50:42] customer service [50:43] there are two incidents [50:44] that i want to highlight [50:45] that demonstrate [50:46] the need for common sense [50:47] investments by the service [50:49] in technology [50:50] first earlier this year [50:52] a national new hampshire [50:53] letter carrier [50:54] was robbed at gunpoint [50:56] while delivering mail [50:56] thankfully he was unharmed [50:59] but the robbers [51:00] stole his arrow keys [51:01] which are used to access [51:03] mail collection boxes [51:04] then they use the keys [51:05] to steal the mail [51:06] in response to the rise [51:08] in attacks on postal employees [51:10] letter carriers have called [51:11] for converting arrow keys [51:13] to electronic fobs [51:15] which could be disabled [51:16] in the event that the fobs [51:17] are stolen preventing [51:18] further crimes [51:19] and disincentivizing criminals [51:21] from stealing them [51:22] in the first place [51:23] so that's one incident [51:24] the second incident [51:25] occurred in hanover new hampshire [51:27] where the local post office [51:28] didn't have access to wi-fi [51:30] for two months earlier this year [51:33] meaning that post [51:34] the post office [51:35] was unable to process credit cards [51:37] to perform basic transactions [51:39] as we all know [51:40] having reliable internet access [51:42] is essential for operating [51:43] a business in this day and age [51:45] so will you commit [51:46] to making common sense investments [51:47] to improve employee safety [51:49] and customer service [51:50] as part of the delivering [51:52] for america plan [51:53] the delivering for america plan [51:55] is all about making investments [51:57] in our facilities [51:58] and modernizing the network [52:00] so yes [52:00] thank you [52:01] these are things that letter carriers [52:03] and other employees have raised [52:05] and we've had to push really hard [52:07] for instance on the wi-fi issue [52:08] so i would look forward [52:09] to working with you on that [52:10] i only have a little bit of time [52:13] left but i do want to [52:15] just raise one more issue [52:17] my office regularly receives [52:19] outreach from constituents [52:20] asking for our help [52:21] in resolving the postal issues [52:23] they're facing [52:23] for example for more than seven years [52:26] a small business owner [52:27] in peterborough new hampshire [52:28] was able to reliably schedule [52:30] package pickups [52:30] from her home nearly every day [52:33] whether it was one package or 30 [52:34] whether it was rainy or sunny [52:36] after her regular mail carrier [52:38] retired in 2023 [52:40] the daily pickups became less reliable [52:42] and some days they were missed altogether [52:44] we hear stories like this all the time [52:47] frustrated customers [52:48] and small business owners [52:49] who are looking for reliable [52:51] consistent service [52:52] and when we reach out to our postal service [52:54] customer liaisons [52:55] or regional management seeking help [52:57] we are often met with excuses [52:59] instead of action [53:00] and that's obviously not acceptable [53:02] so will you commit to ensuring [53:04] that your regional management [53:06] takes a more active role [53:07] in working with us [53:08] to resolve issues brought to us [53:09] by our constituents [53:10] yeah i think we do need some work [53:13] in that area senator [53:14] and we have we have [53:15] aggressively pursuing that [53:17] well i appreciate that [53:18] uh i'll also just add that [53:20] a number of my colleagues [53:21] on both sides of the aisle [53:22] um have felt that sometimes [53:24] um your office's response [53:26] uh is lacking [53:28] when we make inquiries [53:29] so i hope very much [53:30] that we can work on improving [53:31] that as well [53:32] thank you [53:32] senator blumenthal [53:36] you're recognized for your questions [53:37] thanks mr chairman [53:38] thanks for having this hearing [53:39] thank you [53:40] mr dejoy for being here today [53:42] when you were last here in april [53:46] you and i talked a little bit about ridgefield connecticut [53:49] small town [53:50] but important to me [53:53] and the people of connecticut [53:57] along with other towns [53:58] where the united states postal service [54:00] has property [54:01] that is essentially unused [54:04] and where in fact [54:06] the postal service could save some money [54:09] maybe not billions of dollars [54:11] but every penny saved [54:14] as you know from your business experience [54:17] is important [54:17] to a corporation [54:20] when we spoke in april [54:24] well you promised to look into the ridgefield property personally [54:31] but all you did [54:33] afterward was cite a september 2023 letter from one of your government relations people [54:42] scott slusher [54:44] is he still with you [54:46] yes [54:47] is he here today [54:51] yeah [54:52] good morning mr slusher [54:55] uh mr slusher told me in that letter [54:59] quote [55:00] during our peak holiday season when mail and package volumes dramatically increase [55:07] the lot will be needed to accommodate the foreseeable needs of our customers and the additional [55:13] seasonal employees we employ to meet those needs [55:19] when was the last time mr joy you visited ridgefield connecticut [55:24] i don't know that i've ever been to ridgefield connecticut [55:26] you've never been there [55:27] has mr slusher ever visited [55:34] i take it from your non-answer that he hasn't [55:37] he's asking me if mrs i don't i don't keep up with the travel [55:40] you don't know [55:41] no let me show you [55:46] uh a photo of that lot [55:52] last december december 27th [55:55] during the peak holiday season [56:00] it's empty [56:02] it's empty every day [56:03] in december [56:04] it's empty every day [56:06] every day [56:07] during the year [56:09] that lot is unused [56:11] the small businesses on main street [56:14] they want to make that lot available for parking [56:19] they don't want to take anything away from the united states postal service [56:23] and the non-responsiveness sometimes to say stonewalling of the postal service in response to [56:30] their and my request the town of ridgefield so that that property can be used for parking enabling more customers for those small businesses on main street i think is really unacceptable [56:48] will you come to ridgefield [56:51] sure [56:53] we'll set it up with your office during the peak holiday season [56:58] i'll i'll i make trips [57:00] you'll love to invite me i'll come to it's especially beautiful [57:03] let me let me let you let [57:05] and while you're in ridgefield [57:07] maybe we could also visit milford norwalk east hartford where there are properties [57:17] that could be sold by the postal service they're essentially unused postal service could make some money [57:26] yeah and right now it is essentially refusing even to respond as you have done essentially on ridgefield [57:36] so first of all i'll take the whole tour all right i'll come up but we are in a process [57:42] we have these requests throughout the whole nation and we are in a process of looking at 31 000 facilities across the nation [57:51] trying to determine what we're going to stay in and not stay in where we're going to park electric vehicles [57:56] where you know and and so forth so we uh it's it's we are in a a status of evaluation [58:04] okay we will get through this as we work through our whole uh whole network where our sorting and delivery centers are going to be [58:11] what our retail configuration is going to look like and so forth and then that will be the time for us to [58:17] to to move out in terms of looking at the monetization [58:21] but the problem is mr dejoy and i apologize for interrupting but my time is limited as you well know [58:27] that in norwalk they are in the process of redeveloping their downtowns now in real time [58:35] but senator that's everywhere in milford they are redeveloping a downtown they want to provide you with [58:44] reasonable alternatives for the postal property if it ever is going to be used in litchfield [58:52] i mean i could go through a number of towns where in real time right now there are businesses [59:01] and taxpayer interests and your customers are at stake why can't we move on some of these properties [59:11] right away rather than the post office in effect with all due respect stonewalling the people of [59:17] connecticut i i i don't know that we uh i i do believe that we need to and have started a process to engage [59:27] i just was with uh uh a couple of congressmen in their towns looking at uh uh some of these prod in [59:35] projects i do think we need to get into a better dialogue more meaningful dialogue with local [59:42] constituents uh quicker in terms of the uh the decisions that we that we need to make and the [59:49] the reasons why we uh can't relinquish or can relinquish the the property i think we need to get [59:56] better at that doesn't change the answer uh you know in many many cases because we do need many of [1:00:03] these these these these properties uh uh but uh uh so i don't know i mean do you what you want me to [1:00:10] look into this further what well you promised to look into it and we gave you and we gave you an answer [1:00:17] and you gave me an answer to refer to a september 2023 letter which frankly i find insulting well why [1:00:25] why do you find insulting if we because what you say is absolutely untrue that it is used in the [1:00:33] peak holiday season and if anybody so paid attention gave it the slightest care were that's that's not [1:00:41] true because senator back when i got here we added like a thousand locations during peak right to do [1:00:49] deliveries because of some of the changes that we have made in our operational processes that is coming [1:00:54] down that might have been one we we ran a lot of additional operations during the peak season that [1:00:59] were crazy and costly and deteriorated service so in the in our process i am i'm emptying buildings [1:01:06] all over the country but this is a process i can't well the process seems to be never ending exactly and [1:01:15] the lack of an end means the post office the united states postal service is deprived of revenue that it [1:01:23] needs and it means insulting the people of the united states who have an interest your customers not [1:01:35] only in that revenue but also in the most effective use of property that belongs to the united states [1:01:41] postal service so i welcome your willingness to come visit but let me if i give up a bill i get booted [1:01:49] out of a retail center where i'm paying let's say three hundred thousand dollars a year you know what the [1:01:54] price of that is for me to go someplace else today like three million dollars a year so i have to [1:02:00] be careful with what we do with this with this real estate there's significant increases in value [1:02:06] and also a whole cartel of opportunists that we have dealt with over the years at the postal service [1:02:12] with regard to these centers so that property in a downtown if you want a post office or a postal service [1:02:18] we are going through making you know making are you aware that the post office moved out of ridgefield [1:02:23] the office is no longer there i would suggest that you really look into as you promised you would do [1:02:32] the situation there personally maybe ask mr slusher to do an advanced visit so that you can be prepared [1:02:42] when you come with me and i appreciate your willingness to do so but time is not on our side [1:02:54] when it comes to those small businesses whether it's in ridgefield or the interests of towns milford [1:03:02] norwalk litchfield east hartford where the property interests are not used properly i i apologize for [1:03:11] going over my time mr chairman senator rosen you recognize your questions thank you mr chairman thank [1:03:17] you for holding this hearing i do want to say that i'm very concerned postmaster about your dismissal or [1:03:23] lack of consideration of doing specific analysis and areas of concern regarding our mail delivery and [1:03:29] our postal assets and i might remind you as i follow the distinguished senator from connecticut that [1:03:36] today that this body this body has oversight responsibility and we do expect timely collaboration [1:03:45] and these important issues that affect each and every one of our constituents and our communities and [1:03:50] our state's economics so i'm going to move on mr dejoy the last time you testified before this committee [1:03:57] we discussed my concerns for your proposal for the reno processing and distribution center the proposal [1:04:03] as originally crafted could have led to significant delays in mail delivery i appreciate that after months [1:04:10] of pushing usps finally responded to my calls to keep in-state mail letter processing in reno i do remain [1:04:18] concerned about the overall implementation of your delivering for america plan according to the usps [1:04:24] online performance dashboard while the standard for receiving delivering mail in reno is two days [1:04:30] usps is currently averaging three to four days in certain zip codes in reno and so can you speak [1:04:38] specifically to reno if you may what the usps is currently doing to get our delivery times down in [1:04:44] northern nevada to the two-day standard and when we might expect um that so right now of course and [1:04:52] i don't know specifically to reno but i i believe reno the area of all of i don't want to even say [1:04:59] nevada is it and if you come here could you please learn to say nevada properly it is kind of respectful [1:05:06] i appreciate that i no disrespect intended and um uh do you say illinois if you go to talk to the senator [1:05:15] why are you making fun of me well it is a matter of respect you've been for this maybe that's the [1:05:20] way i speak why are you making fun of me i am not making fun of you sir i would like to see the respect [1:05:29] due to my state of nevada which is experiencing problems in their mail delivery service when can [1:05:35] we expect mail delivery back down to the two-day standard 50 percent of market dominant mail and [1:05:42] packages gets delivered a day in advance we're at about 85 percent on time 95 the day a day a day [1:05:51] later we're going to be in that condition for probably the next eight to 12 months okay when i [1:05:56] expect that all mail uh you know through the uh throughout through the system reaches it's it's [1:06:02] intended i uh four days the average time is is 2.8 days across the nation for for mail to be delivered [1:06:10] thank you i'd like to move on and talk about the treacherous conditions on the donner pass on i-80 [1:06:15] which we did speak about also last time it is the only way to get from reno to sacramento [1:06:20] and so a path that you had in your original plan to redistribute mail processing for reno would have [1:06:26] relied on travel for mail to travel out of nevada and then of course back again as i mentioned at [1:06:33] that time donner pass is some of the most extreme weather in the united states with over 33 feet of snow [1:06:38] annually and just a few days ago donner pass again was closed due to heavy snowfall so you said you [1:06:44] didn't have the data um last time do you have any data that you could share with us today and how the [1:06:49] weather conditions in donner pass may have been affecting um the postal service as we know it's [1:06:54] closed on over an average of a month a year during various times due to wildfire snow and high winds [1:07:01] since you testified in april and would you be willing to provide me that information if you don't have [1:07:06] it here today and how it impacts our service well we were speaking about that with regard to uh the [1:07:15] collection mail the turnaround mail that was going back into the reno area i made a trip out to reno [1:07:20] actually uh to look at the plant and the and the operation and for a variety of reasons uh we took an [1:07:29] alternative course um we so the turnaround mail will not go through to donna pass will stay local [1:07:37] mail going out to the rest of the nation will go through to donna pass or whatever other direction [1:07:41] that we have when it is closed we're well aware that it is closed and we have alternate types of [1:07:47] arrangements through training through our transportation uh you know to to move to the [1:07:51] sacramento where the main outgoing processing plant is going to be i don't have any other specifics uh that [1:07:58] that i can get our routings from transportation and show you what we do when it's when it's closed [1:08:04] i can have that sent to you thank you um well i want to talk a little bit about regional [1:08:09] transportation optimization because in october you submitted a request for an advisory opinion [1:08:14] from the postal regulatory commission in which you proposed a series of operational changes [1:08:20] one such change is your regional transportation optimization i'm going to refer to it as rto [1:08:26] under this proposal mail collected at post offices and zip codes more than 50 miles away from [1:08:31] the nearest regional processing center and distribution but have their morning and afternoon drop off [1:08:36] and pick up activities consolidated into a single route with the postal service already failing to [1:08:42] meet many of its performance goals i am concerned you want to cut the volume of routes uh senator hassen [1:08:49] i think is concerned about the same thing and um it this proposal really unfairly impacts our rural [1:08:55] mailers especially in receipt of their social security checks or medications and and some of [1:09:01] those and so despite concerns that i know many of us have shared with you um you've decided to move [1:09:07] forward which with i believe is a misguided proposal inciting a yet to be proven gains in efficiency [1:09:13] efficiency along the later legs of delivery so have you conducted an analysis that conclusively proves [1:09:20] that any delays in mail originating in rural areas will be mitigated by the subsequent gains in [1:09:25] efficiency or is this merely conjecture we have done extensive analysis on uh the the total [1:09:32] operational changes that we uh that we are presenting and the cost savings first off delivery [1:09:39] into these areas will be enhanced because most mail almost 90 percent of mail packages originates within [1:09:47] a 50 mile radius and nothing is changing to the delivery so that will happen the the collection the most [1:09:54] that a collection a single piece mail somebody mailing a letter the most that it will be affected [1:10:00] is one day allocated across five days it will still be no longer than five days to get to the furthest [1:10:06] part in the nation uh uh the uh in your case you have data you have a report to support this it's all [1:10:12] filed with the postal regulatory commission thank you i want to just quickly um ask this last question uh you [1:10:19] know we have contingency plans we have weather bad weather across our nation many different times [1:10:24] of the year and of course i'm concerned about um our particularly bad weather up in northern nevada [1:10:30] along the i-80 route um do you have contingency plans in place if routes um like ours in reno subjected [1:10:38] to the rto initiative uh become impassable and i'm not the only person that may have roads that are impassable i'm [1:10:44] sure if you speak with uh well the chairman he'll tell you about roads that are impassable in the upper [1:10:49] peninsula of michigan and you could probably go after state to state so do you have a contingency [1:10:53] plan in place due to weather conditions we have alternate routes and actions that we take we've [1:10:59] been delivering mail for 250 years we have alternate actions that we take with every with every disaster [1:11:06] road closure uh hurricane and and and so forth uh does it get it there the same time uh that that [1:11:15] that depends on the consequence of of the event we're talking about but we do have methodologies to uh [1:11:21] that we deploy readily uh uh you know to uh uh to make sure that the mail gets delivered and collected [1:11:29] thank you thank you mr chairman thank you uh senator also if you're recognized for your questions [1:11:35] thanks thank you mr chairman postmaster general prior to your efforts to implement delivering for [1:11:45] america and move to the palmetto facility in georgia on time delivery for first class mail in north georgia [1:11:52] was over 90 correct not so not so what was on time first class mail delivery in georgia prior to the [1:11:59] changes that you implemented at palmetto so atlanta atlanta was always in the bottom 20 percent of our [1:12:05] service standard across the nation because my question is what percentage of first [1:12:08] i don't remember is probably in the low 80s a single piece first class mail was definitely in [1:12:13] the low 80s in the midst of the changes that you implemented mid-spring that declined to 36 [1:12:20] percent correct we've been through this yes it has we've been through this well we're going through [1:12:26] it again okay let's go on time delivery of first class mail in metro atlanta and north georgia [1:12:32] late spring was 36 correct that is correct you said at the hearing in april that we would be quote [1:12:44] where we need to be in about 60 days correct i believe so it's been 233 days sound right that's [1:12:54] i don't i don't it's been 233 days on time delivery of first class mail in metro atlanta and north georgia [1:13:03] is now at 75 percent correct are we where we need to be uh where we're gonna be for a little bit yes [1:13:11] are we where we need to be where we're where we're gonna be it's a it's a simple question do you believe [1:13:18] that 75 percent on time delivery of mail in north georgia is where we need to be 50 of first class [1:13:25] mail in georgia gets delivered a day in advance we're in the 75 to low 80s uh on time and 90 is [1:13:33] the day after while we're doing our transitions okay that's where we're going to be that's one of [1:13:38] the reasons why we have other types of service related issues uh that my time is limited let me [1:13:44] assure you that for my constituents in georgia the mail being delivered on time 75 of the time [1:13:53] is not where we need to be when you said 233 days ago that we would be where we need to be in 60 days [1:14:05] delivering for america plan projected positive net income for usps starting in fy 23 is that right [1:14:15] that's correct in fy 23 you had a 6.5 billion dollar loss correct in fy 24 you had a 9.5 billion [1:14:25] dollar loss correct correct correct you had projected for fy 24 a 1.7 billion dollar gain correct yeah that's [1:14:37] correct would you say that your tenure has been a success i would say that the 10-year plan has not [1:14:50] reached what the plan said it would be but i do sorry not not your 10-year plan [1:14:55] your tenure has your tenure as postmaster general been a success senator i know how you feel about [1:15:02] me you've been quite public okay so i'm not going to you know debate that you think i'm a failure [1:15:08] fine i don't it's not about how i feel about you postmaster general it's about whether or not [1:15:13] seniors in georgia are receiving prescriptions it's the stacks of boxes of mail from courts that never [1:15:22] arrived that went to their destination it's the small businesses who are not able to get products [1:15:28] to market and who are this is this is my time postmaster general you're here under oath before [1:15:32] the u.s senate i know where i am it's small businesses who can't operate it's death notices [1:15:42] not delivered to family members and you're sitting here trying to explain that 75 percent on time delivery [1:15:51] is a success and it's not it's not about how i feel about you postmaster general it's how my [1:15:58] constituents are being served by the united states postal service let me ask you a question about [1:16:03] the palmetto facility in georgia have there been any deaths in the palmetto facility in the last year [1:16:08] any deaths deaths i have a lot of events throughout the course of the year i don't remember specific [1:16:16] i have a lot of deaths throughout the course i don't remember specifically palmetto no how many how [1:16:21] many deaths of personnel on the job would you say you've had nationwide in the last year uh we probably [1:16:29] see 10. well you had a death in the palmetto facility last year will you provide my office in [1:16:35] this committee with all materials relevant to that death absolutely when will on-time mail delivery be [1:16:47] restored to the level prior to you trying to make these changes for my constituents in georgia you [1:16:54] said in april we'd be where we need to be in 60 days well i disagree with the premise because the [1:16:58] service is probably at the level of service where you were before i started these changes right we're [1:17:03] not yes we are i've got the numbers in front of me we're not i don't know what numbers you got [1:17:09] i've got your on-time delivery statistics but you're not where you were before you tried to make this [1:17:14] change in georgia you're at 75 on-time delivery in georgia so when will you be [1:17:20] we started you said the delivering for america plan when we started the delivering for america [1:17:24] plan service in georgia was terrible aspects of the delivering for america plan brought that service [1:17:30] up we were close to the 90s across the board that was part of the division for america plan when we [1:17:35] opened the new plant is when we had our issues service went down and we're recovering from it now and [1:17:40] it's part of when we get to where we want to be it's gonna be part of the whole broad filing that we [1:17:44] have with the with with the prc right now where some of the service business rules that are 30 years [1:17:52] old that should have been changed are affecting how we measure service so there's a bunch of other [1:17:57] things that need to come together to get the service where where it is in all service in georgia [1:18:05] is let within less than three days people get all their mail packages and everything right and that will [1:18:10] be what you know that that will be the target what we're what we're trying to shoot you just lowered [1:18:15] your targets for next year correct i lowered the targets for next year to to put that what i just [1:18:23] said out into the public that this is what it's going to look you lowered your targets for next year so [1:18:28] you could meet your targets so i can make the changes that we need to make to provide a viable united [1:18:34] states postal service well postmaster general you're not meeting your financial targets [1:18:42] you're hemorrhaging cash when you said you'd be making money delivery in georgia has been abysmal [1:18:50] this year you have not recovered as you said you would you need to do better for my constituents in [1:19:01] georgia yes sir senator holly i recognize for your questions and uh thank you for uh deferring [1:19:10] to some of our colleagues here that was uh very kind absolutely thank you mr chairman mr dejoy good to see [1:19:17] you um let me ask you about uh the regional transportation optimization plan a couple of [1:19:24] my colleagues had questions about this now and maybe you can clear up some some things for me my [1:19:30] understanding is that this plan will eliminate end of day collection at post offices that are located [1:19:35] more than 50 miles from a hub is that basically correct eliminate end of day collection from post [1:19:42] offices that are located more than 50 miles from a hub is that basically right most most likely in [1:19:48] most places okay could you speak into your microphone mr dejoy a little bit there we can [1:19:53] that way we can hear each other better great so okay it's going to eliminate end of day collection at [1:20:00] most post offices located more than 50 miles from one of the hubs now in missouri we've got 926 post [1:20:07] offices 754 of them are more than 50 miles from a hub and that accounts for 50 of my state's population [1:20:17] and i understand that under your own agency's projections 68 of rural single piece first class [1:20:24] mail will get downgraded under this plan that's going to be half my state can you walk me through that [1:20:33] yeah so uh i don't i i would have to uh look at what what we're saying in terms of local cancellation [1:20:41] because i think in missouri we we decided to keep another local cancellation plant but it'll be one [1:20:46] or two plants so to some certain extent you're right that there's a bunch of offices that are outside [1:20:52] the uh uh that would get the what we say is the plus one day we would send a truck out when we deliver [1:20:59] mail and take it back which is an obvious cure for an inefficient process we will then accelerate uh within [1:21:08] within the within the with the the reach of the plant that it goes to we will accelerate through [1:21:17] through the system so we'll pick up time there and across the country we'll pick up time uh because we [1:21:22] will uh uh deploy operating practices that get us on the road about four hours earlier right so that's [1:21:28] going to get it get us get us get us further with regard to the impact the 68 8 8 8 it's not that much [1:21:39] it's single piece mail outbound only so all mail with 80 88 percent of mail originates from within a 50 [1:21:48] mile radius and all that delivery will be fat will be picked up by that four hour process moving through [1:21:54] the system so all delivery into all your constituents everywhere will be will be better uh in terms of [1:22:02] uh uh the delivery side it's only the outbound collections that that that that that come and go [1:22:10] through this that get the extra day that within the one two three four and five day span that we have [1:22:17] right now okay a a a two day may go to three day a three day may go to four day a four day may go to [1:22:24] five day but nothing's going beyond five days and that's going to save uh we have tens of thousands [1:22:30] of trucks running around with nothing in them all right i have to that is a big big reason you know [1:22:36] to to make the change so i think you know within uh on a single piece mail somebody met and i'm not [1:22:42] diminishing its importance but somebody mailing a letter to you know uh you know a card or something [1:22:49] like that may get uh may get a day later within the five day constraint yeah my concern is thank you [1:22:56] for confirming that my concern is is that that's going to affect half of my state 754 of my state's [1:23:03] post offices uh this is on top of downgrades that happened in late 2021 i mean this is as you can [1:23:10] understand i'm sure this is why the missouri farm bureau has written to you opposing this [1:23:17] all of my rural electric cooperatives are opposed to this uh this is disproportionate impact on rural [1:23:23] folks i understand that some urban areas will also experience downgrades but but to them your own [1:23:27] estimates say it'll be a third of their volume it's two-thirds more than two-thirds of the of the rural [1:23:33] volume i mean why the disproportionate impact on on rural folks the it actually has more of an impact on [1:23:40] urban areas the the impact is like 60 percent urban 40 percent rural uh uh we have urban areas have [1:23:48] sprouted up you know postal system was built you know 30s and 40s and we have different g you know [1:23:55] the geography is as it has greatly changed so there are urban areas uh i need to get cost out need to get [1:24:03] cost out and this is extremely um this is i don't believe that this is a punitive [1:24:09] way we focus on delivery we're delivering to 167 million delivery points every day uh we set the [1:24:15] constraints around the five day service uh it only affects single piece so all their deliveries [1:24:22] all the everything that's going to them is going to be is going to be timely uh uh and uh uh uh the [1:24:29] local cancellation reach i have to i can get back to you as to what that reach is going to be from the one [1:24:34] one or two plants so that that'll take that out of the uh uh uh uh uh uh uh uh the uh delivery you [1:24:41] know out of the the impact impact zone but at the end of the day this is uh you know this is a change [1:24:49] we need to make to get the cost that we're we're chasing 3.7 billion dollars up and this is all about [1:24:56] rural america senator if if we you know well you're you're reducing the delivery so you're reducing the [1:25:02] the the volume to rural america i mean you're slowing it down they're getting the downgrade [1:25:06] 68 percent of their mail is going to get downgraded significantly more volume gets delivered to people [1:25:12] in rural america in every place then then then they actually mail out significant so it's [1:25:18] disproportional inbound then then then out but you don't dispute the fact that 68 of their single [1:25:25] piece first class mail is going to get downgrade you just told me that it would it get downgraded and [1:25:29] listen i i think i understand you you you're trying to cut costs i'm just telling you i understand [1:25:35] your position mr dejoy but i need you to understand mine i represent a state that's majority rural 754 of [1:25:41] my 950 and my 926 post offices are going to experience additional delays this is on top of the fact that [1:25:48] in the kansas missouri district you're you're hitting a 72 percent uh on time delivery standard that's well [1:25:55] beneath your own target i mean this is i'm just telling you that in my state people are they're [1:26:01] very frustrated and when you have you know the farm bureau represents 157 000 missouri farm families [1:26:08] families and they look at your plan and they say what in the world we're going to get the shaft here [1:26:13] just to be honest with you i'm just telling you the the facts this is how in my state this is how it [1:26:18] seems so i think the alternatives are that we get some significant government funding because we're [1:26:29] going to run out of cash when i got here we're going to run out of cash i think this is we've tried [1:26:33] we've worked very very hard where to to find a way you see i try and do one single move in efficiency and [1:26:42] there is no enjoyable answer for anybody here uh we think this is a way that continues to get good [1:26:50] you know good reliable so it is a change it is a change that should have been made 20 years ago [1:26:55] right so there's a long there's a big big heavy lift here because nothing's been done for 20 years [1:27:01] and you know the uh the the the the impacts are not unfelt i understand that it's it's scary to many [1:27:09] people i understand that too um but i think you know we have made a determination that this is which [1:27:15] is what our role is to try and define and evolve as to what the service is and i can you know we're [1:27:22] looking at improving inbound service significantly keeping cost affordable keeping the postal service [1:27:28] alive and uh yes there will be an impact on some collection single piece mail you've asked the postal [1:27:35] regulatory commission i think for an advisory opinion on this if they issue a negative opinion [1:27:41] will you stop moving forward with the implementation of this plan so we will evaluate their their uh [1:27:50] everything that they say and take it you know seriously and make adjustments uh um [1:27:56] i they had their testimony yesterday uh we had our testimony yesterday they started with negative [1:28:05] connotations on the uh on the uh uh uh plan which makes me question their understanding of what [1:28:13] the condition that we're in and the things we need to do but we will take like every input that we get [1:28:18] we take it you know uh we will take it seriously and make adjustments but i think there's an overwhelming [1:28:24] propensity for us to move forward and we should expect that well um i want you to know and i want you to [1:28:31] expect that uh i hate this plan and i'm going to do everything i can to kill it i'm going to try to [1:28:37] protect every delivery to the state of missouri to my rural areas and i just want you to know up to [1:28:42] the we're on the same page i want you to know i'm going to go to the mat on this and i'm going to work [1:28:46] with everybody i can across this dais to protect delivery to rural america and if i have to go down [1:28:52] with the ship i'll go down with the ship but i'm going to do everything i can to kill it yeah you [1:28:56] won't go down with the ship if you're successful the postal service will go down no if i'm successful rural [1:29:01] america will get its mail delivered on time which is currently not and urban areas will get their [1:29:05] mail delivered on time which is currently not and we just who's paying for it the taxpayers who've [1:29:09] been paying for it all along we just in 2021 gave you a bill that you wanted mr dejoy that reduced your [1:29:15] liabilities by tens of billions of dollars and listen i've been nice to you up until now but frankly [1:29:20] i'm a little tired of this we have waited and we have waited and we have waited for better delivery [1:29:25] i have written you letters like i can't count talking about the delivery in the kansas city area [1:29:31] which is appalling talking about the delivery to rural area we've got the bering post office which [1:29:35] has been completely decimated for two solid years that has now been rebuilt by a private party that [1:29:42] your agency still has not cleared and opened and yeah i'm not happy about it and i've been nice to you [1:29:47] today and up until now but you've exhausted my patience on this and i just want you to know it [1:29:53] because i represent a state whose patience is exhausted so there i've leveled with you now i [1:29:58] think we understand each other but i want to see service to my state and the rural areas of my state [1:30:04] preserved and in the urban areas i want to see it get better and meet the standard and i want the [1:30:09] bering post office rebuilt and opened like you promised me it would be when you're here and we're [1:30:14] here in april and it still isn't as we sit here in december so that's my piece that's where we are just [1:30:20] so we understand each other and i look forward to working with you going forward yeah i i understand [1:30:26] you i don't think you understand me senator marshall senator marshall you're recognized for your [1:30:32] questions well thank you chairman and uh welcome postmaster general certainly understand you have [1:30:38] an impossible job and i hope i have time to ask you why is it impossible but i want to start we asked [1:30:45] some folks back home if you could be in front of the postmaster general what questions would they ask you [1:30:50] so this first one is from mike from topeka and stacy from marysville had the same question [1:30:56] what is justifying the consistent price increases with no change or improvement in delivery time or [1:31:02] service senator we had a defective pricing model for 20 years mail volume cut in half and we were not [1:31:11] allowed to raise our prices to accommodate that the basic division that would have told anybody that we [1:31:18] needed to have a significant increase in price also during a time period that i've been here in [1:31:23] raising prices we've had 20 percent inflation so under i mean under any circumstance okay the price you [1:31:30] know the the prices that we have the only thing we've raised our prices are been mostly the inflation [1:31:37] right and that that that that is uh the case the service was deteriorating when i when i walked in the [1:31:44] door it had been bad it was getting worse and we are trying and uh the trajectory uh it had to be [1:31:50] has to be stabilized before we start getting back thank you i'll go to the next question this one's from [1:31:55] dana from el dorado a lot of folks in rural kansas do not get their mail in a timely manner first class [1:32:01] mail used to get anywhere in the united states in two to three days what changed the standard the [1:32:07] standard five days now the standard is five well why so why why did this why was the standard changed [1:32:15] because the operational cost of because mail volume had declined uh uh 50 percent over 50 percent uh the [1:32:26] we were flying we spent 3.5 billion dollars flying mail around the country to meet the three-day standard [1:32:33] when i got here and we're running 50 000 trucks a day empty right so i don't own planes [1:32:40] we canceled those contracts that were flying all the stuff we put everything on truck and that's [1:32:45] that that's our uh the ground on a ground service uh and that is our big initiative has that project [1:32:51] been successful yes we've taken 1.5 billion dollars out of our transportation budget uh uh the uh we got [1:32:59] service up to the 90s in the 90s across the board until we started making these physical distribution [1:33:04] changes okay which are which are painful okay next um we sent a poll out to over 400 000 kansans this week [1:33:12] um everybody was not a push poll and over half of the kansans in their mail said their mail delivery [1:33:20] services are unreliable so over half of kansans said the mail delivery services are unreliable and nearly [1:33:26] 70 percent said they have personally experienced delays in the past year how do you measure success [1:33:34] certainly you're not going to call that success i would assume we have issues in kansas we have [1:33:38] issues in kansas i'm aware to service issues in kansas and we are working on a a a physical the plant [1:33:45] there is old it's a three-story building uh there are other operational issues that we have in kansas and i am [1:33:51] working a strategy specifically to enhance the the the service in in in kansas that op that is [1:34:01] is not result of anything in the plan right it's a result of operational issues that we have in [1:34:07] in kansas and i recognize it's it's there and we're going to fix it so how how would you measure success [1:34:15] in kansas i mean i assume there's some metric that says the average number of days are you meeting the [1:34:20] five-day standard i guess how do you do you follow that i still think when you look at at kansas [1:34:26] 50 percent of market dominant mail and packages get into get to where they're supposed to be a day [1:34:31] in advance of a standard we have in your case you said 77 so so we might be 77 on time but the next [1:34:38] day we're within 90 we're we're in the 90s right now with all the transitions of the traffic coming in [1:34:46] and out that we need to make i think that is uh that is part of the consequence of the damage that has [1:34:53] been done to the organization over over uh the past two decades okay my next question um post [1:34:59] magister general the city of winchester kansas has been without a post office building since october 2020 [1:35:05] city officials have provided been provided with a draft lease from the usps but have not received a [1:35:11] signed finalized lease allowing them to begin constructing a new building can i get your [1:35:16] commitment today that a finalized lease will be returned to the city of winchester by the end of this [1:35:22] year by the end of this year um i can check i know that's in process i'll check out what the timing [1:35:28] we're what's a reasonable time then if it's not by the end of this year sure i i will let me let me [1:35:34] get back to you i'll i'll i'll go check on that when we get back to the office we i am trying to [1:35:39] accelerate all our leasing practices uh uh it is a laborious winchester kansas okay yeah uh you i think [1:35:47] you kind of alluded to this audit by the inspector general in the kansas city region um what's getting [1:35:55] better there tell me just you know what's improving how are you measuring that can we expect improvement [1:36:00] in six months in three years i i think in the coming year we should have you know in the coming [1:36:07] year we should have kansas is in the middle of the country most of the service is three-day service in [1:36:15] and out you know in and out of the country and that's a tough service lane for us now because we're [1:36:20] trying to stretch the transportation dollar uh and get and fill our trucks um so it is com it is it is [1:36:28] cumbersome when we we're looking at uh some some uh some new routings and and some new transportation [1:36:36] modes that i think over the next six months we will uh uh start to see them take you know take shape [1:36:42] but i still you know we are when i got here there was the tail of the mail if it didn't get there on [1:36:49] time it disappeared for 10 days we are really focused on this this window of you know within three [1:36:56] days you know that you know okay i'm gonna close with this question postmaster general explain to me [1:37:05] where the resistance is i think you're sincere i think you want to fix the post office um i don't know [1:37:13] that i could fix the post office besides throwing money at it you know where's the resistance i i just [1:37:19] feel like you know i can see the strain in your voice that you want to fix this you came in here you [1:37:23] want to who's the resistance to to fixing this problem i think there's a romance with an organization [1:37:32] that long ago lost its ability to do the service that everybody expected and that is what set the [1:37:41] issue here right uh it was obvious in the past we let it go uh we where it was a significant resistance [1:37:48] to any i mean i have calls with congressmen senators that even understand my plan they say just not in [1:37:54] my district not not here not there right we have i have my own people 640 000 people that need to learn [1:38:03] how to operate like fedex and ups that's the only way we survive so so that sounds like resistance to me [1:38:09] it's not resistance it's so fedex can do it but you guys can't it would have been easier for me to [1:38:16] build a new postal service than to transition this one because we're also delivering 400 million pieces [1:38:25] of mail and packages a day right 400 million that you know uh uh pretty reliable to if you say within [1:38:34] three days pretty reliable if you tie all the other regiments that we have right we have a postal [1:38:40] regulatory organization a regulate a regulator that doesn't understand modern day logistics and [1:38:45] productivity and and and aggregation all right so we have a laborious process we have significant [1:38:51] unfunded mandates that are given upon us by this by by this congress all right i can go on sir thank you [1:39:03] special general joy uh thank you uh for being uh here uh today uh as uh you heard members of our [1:39:09] committee have lots of questions and we appreciate you uh being here to answer those questions as we [1:39:13] continue to exercise our oversight role as a committee the record for this hearing will remain open for 15 [1:39:21] days until 5 p.m on december 19 2024 for the submission of statements and questions for the record this [1:39:27] this hearing is now adjourned thank you