Why Louis DeJoy's One Big Change to the USPS Backfired

On Monday, embattled Postmaster General Louis DeJoy testified before a House subcommittee about the changes he's made at the USPS, the post office's ability to handle the election, and his qualifications for the job. During the hearing's approximately six hours of back-and-forth, we learned very little. But, about halfway through the hearing, there was a brief moment that shed light on how the post office has gone horribly wrong under DeJoy's tenure.

About three and a half hours into Monday's hearing, Rep. Peter Welch (D-VT) had an extended and pointless monologue interrupted by committee chair Rep. Carolyn Maloney (D-NY) because his time had expired. Per custom, Maloney let DeJoy "answer the question," even though there technically wasn't one. This allowed DeJoy to do something he had, thus far, not been allowed to do: explain himself.

His explanation only lasted about 90 seconds, but it was the clearest picture yet about the story DeJoy is telling himself regarding what he has done to the post office and why, something that has been surprisingly difficult to pin down over recent weeks, as speculation has swirled about whether he's a Trump stooge out to sabotage the post office ahead of the election, a small government Republican hastening the privatization of the post office, or a brilliant logistics expert shaking things up.

DeJoy's story is a simple one, and it even sounds sensible on the surface, intended to address very real problems in the way the USPS functions. But it's also easy to see how it screwed up the post office so badly. And at the heart of the problem is a conflict over what is more important: keeping costs down or delivering the mail on time.

During DeJoy's second day on the job, the USPS Office of Inspector General published a damning report about how mail is processed. It found, among many other things, the USPS was late processing almost one in five mailpieces at distribution facilities.

When mail isn't processed in time to make the last scheduled truck trips from the distribution facilities to your local post office, USPS managers have two options. They can dispatch another truck which costs the USPS more money. Or they can hold the mail for the next day, which slows delivery and risks creating a backlog that can snowball into even more delays.

Before DeJoy, managers typically opted to dispatch extra trucks, because, as the OIG report put it, "Generally, management prioritized high-quality service above the financial health of the Postal Service and are making decisions daily to meet service performance goals that are significantly increasing costs."

But late trips beget more late trips, and overtime begets more overtime. If the workers processing mail are late finishing up, then the trucks run late, which causes the mail carriers to leave late on their routes, and thus work late finishing deliveries. Perhaps the mail arrives unsorted by address to your local post office because they didn't have time to do so at the distribution facility, meaning delivering the mail will take even longer because it has to be sorted at the local post office or even on the road. And all that overtime adds up. The OIG found USPS "spent $1.1 billion in mail processing overtime and penalty overtime, $280 million in late and extra transportation, and $2.9 billion in delivery overtime and penalty overtime costs" just in the latest fiscal year.

So in came DeJoy, a man who has worked decades in the logistics and trucking business. He saw late trucks, and, according to the story he told the House committee, he ordered no more late trucks.

"People ask why do trucks matter, why do on-time trucks matter? They do matter," he said during his 90-second monologue. "It is a fundamental premise how the whole mail network is put together. If the trucks don't run on time then the mail carriers cannot leave on time, they are out at night, have to come back to get more mail, the collection process is late, the plant process is distorted. I see several billion dollars in potential savings in getting the system to connect properly and that's why we ran out and put a plan together to really get this fundamental basic principle: run your trucks on time."

According to the USPS, trucks are now running on time thanks to DeJoy's policy, at least more so than they used to. DeJoy said USPS has seen a 70 percent reduction in extra or late trip costs over the last four weeks, eliminating some 4,500 such trips per day. Indeed, the very concept of doing otherwise seemed anathema to him. "I find it really—I would not know how to reverse that now. Am I to say, 'Don't run the trucks on time?' Is that the answer that we're looking to get me to say here today?"

The problem, according to employees working in the processing and distribution facilities, as well as a closer reading of the OIG report, is that the late and extra truck trips were a symptom of the problem, not the cause. Remember, the trucks were being held—or called to make extra trips entirely—because the mail wasn't ready. Now, the mail still isn't ready, but the trucks are leaving anyway.

"The truck leaving on time is a good thing if the mail is in it," one employee at a distribution facility told Motherboard. "But this is not the case." Under DeJoy, the USPS has accomplished its goal of spending less money—by delivering less mail.

So what is causing the late mail sorting in the distribution facilities? There are two main problems. First, processing facilities are understaffed, according to both postal management interviewed by the OIG and unionized employees interviewed by Motherboard. Short staffing, high turnover rates, and employees taking time off for legitimate reasons—and slightly less legitimate reasons such as to attend a football game, as mentioned in the OIG report—results in facilities not having enough workers to run the machines and load the trucks. And these site visits were before the pandemic which has made the problem even worse.

One reason the USPS doesn't have enough workers is because of the 2006 Postal Accountability and Enhancement Act (PAEA), a bipartisan effort which saddled the USPS with tens of billions of dollars in unnecessary debt in the form of future retiree benefits that had to be funded immediately, torpedoing its finances and forcing it to undertake austerity measures such as slashing its workforce through attrition. From 2008 to 2018, the USPS reduced the number of employees by 11 percent while also increasing the number of "non-career" employees (ones with few benefits, low pay, and an annual turnover rate of one in three) by 54 percent, according to a separate OIG report. Now, overtime is a key part of the USPS's operational model, because hiring these non-career employees and relying on them to pick up the slack to move the mail is cheaper than hiring more "career" employees with better pay and solid benefits.

The second issue at the distribution facilities is what the OIG called "management oversight issues" due in part to short-staffing, lack of adequate management training, and turnover. As a result, management simply doesn't sound like they're doing a very good job. The OIG report says they don't communicate with workers, use available software to make sure mail was not being processed either too early or too late, or take an active role in monitoring conditions on the floor.

Frankly, it is astounding that out of all the lessons in this report, the one DeJoy chose to hone in on was the truck trips. It is possible he did so because his expertise is in trucking and logistics, so that's what his brain gravitated towards. It is also possible this is what he noticed because they are the main statistics presented in the "Highlights" section, while most of the other findings are buried in the report itself.

But the most telling element of DeJoy's plan is that, despite his fondness for citing this report as the impetus for his disruptive changes, he did not follow the report's recommendations. There are two different "Recommendations" sections, and neither of them suggests a sudden mandate to run all truck trips on time. Instead, the report recommends a slate of extremely mundane bureaucratic tweaks to get the distribution facilities to run better, such as putting signs on or near the machines that clearly lay out mail processing schedules and truck departure times.

Moreover, the report specifically advised USPS to wait to develop a plan until "the impacts of COVID-19 begin to subside." DeJoy did not do this. His now infamous "Pivoting For Our Future" memo, which outlined the elimination of late or extra trips, was issued on July 10, right in the middle of the nationwide spike in cases that began in mid-June and peaked around July 20.

All this is to say, even stipulating DeJoy's intentions are as innocent and civic-minded as he claims they are, the one major decision he has made in his time as postmaster general does not accord with the advice he says he's following. Even his claim that he identified billions of dollars in savings by running the trucks on time isn't in line with the OIG report he says is his evidence for it. The report says potential savings would be just $385.6 million, because so much of the overtime identified in the report is unavoidable without hiring more employees.

DeJoy says he is trying to fix an unsustainable postal service, one that could not continue to operate the way it did. No doubt, there are numerous problems within the postal service worth addressing, and he correctly identified an important oversight report that has a lot of helpful suggestions in it. But DeJoy's actions raise a lot of questions, including whether he actually read the entire report.