USPS Manager Can't Say If Flats Strategy Is Achieving Hoped-For Savings | PostalReporter.com
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USPS Manager Can't Say If Flats Strategy Is Achieving Hoped-For Savings

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As many readers may recall, Frank Neri, is the former district manager for the USPS Philadelphia district. He was replaced in 2008 by Jim Gallagher, a veteran USPS manager,after news reports of excessive mail backlogs. Now Neri is now at  USPS Headquarters as Manager, Mail Processing Operations.

In Neri’s testimony to PRC he reportedly said: Neri said he does not know whether any of the programs or concepts that currently under focus by the Postal Service will lead to any real measurable savings. Neri said he could not today say definitively whether the flats program was achieving hoped-for savings.

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At the Postal Regulatory Commission:  From today’s hearing at the PRC on Docket R2010-4.

Witness: Frank Neri, USPS (regarding the USPS Flats Strategy)

  • * The USPS has no projections on savings for FY2011 that will come from its FSS program.
  • * The flats strategy (as a whole) is still under consideration by Postal Service engineers. There has been no determination thus far that its flats strategy merits moving forward.
  • * The Postal Service provided no estimates of cost savings from the flats strategy or when they would be actualized.
  • * There’s no decision analysis report yet for reconfigured package and bundle sorters.
  • * Ultimately, decisions as to when to run periodicals on automation are made by local facility managers.
  • * There’s a whole lot of “expectations” by management that may not be actualized in facilities that are provided considerable operational discretion.
  • * Witness Neri, who is in charge of overseeing FSS operations, has not yet read completely the OIG study which concluded that the FSS program may be not cost justified.
  • * Commissioner Acton and the Chairman felt compelled to recommend that Witness Neri take the time to review the OIG study.
  • * Neri said that he has been aware for about ten years that the USPS was having cost-efficiency problems with the processing of periodicals and non-carrier route Standard flats.
  • * Neri said he does not know whether any of the programs or concepts that currently under focus by the Postal Service will lead to any real measurable savings.
  • * Chairman Goldway said that there did not appear to be any projected savings associated with the Postal Service’s planned strategies.
  • * Commissioner Blair said he could not discern anything from what the Postal Service has offered that indicates that there is a clear link between the flats program’s success or lack of success and its budget allocations.
  • * Neri said he could not today say definitively whether the flats program was achieving hoped-for savings.
  • * Neri said that the Postal Service’s decision to pay for all 100 FSS machines even though the final determination on savings that could come from the program was due to “contractual procurement obligations.”

Witness: James M. Kiefer, Pricing Economist, USPS

  • * Pricing decisions in this case were developed under “tight guidance” provided by the very top of the Postal Service. There were specific “management directives.”
  • * Most products were to be set around the 5.6% average. Periodicals were to be kept within 10%. Standard parcels were allowed to rise above 20%.