USPS’ feud with its regulator escalates yet again

Updated Feb. 2 at 9:48 am

The U.S. Postal Service and its regulator are continuing to publicly voice their disagreements, with the ongoing spat reaching a new fever pitch as the mailing agency is seeking to avoid turning over material and information the watchdog has requested to conduct oversight. 

On top of the ongoing disagreements, postal management is now pointing the finger at the Postal Regulatory Commission for derailing new business. USPS had set up a Negotiated Service Agreement—a common practice for the agency in which it establishes custom prices and services with a customer or organization—but said the commission took too long to approve it and the company backed out of the deal. 

The conflicts come after Postmaster General Louis DeJoy has repeatedly used pointed rhetoric to condemn PRC for overstepping its authority and standing in the way of his reforms aimed at improving his agency’s financial position. Commission leadership has rebutted those claims by suggesting DeJoy, through his 10-year Delivering for America plan, is undertaking the most significant changes to the postal network in its nearly 250-year history and such an overhaul requires more oversight than ever. 

The latest tiff involves a request by PRC Chairman Michael Kubayanda into the Postal Service’s plan to consolidate mail sorting into fewer facilities. The changes, which USPS began slowly rolling out last year and will accelerate in 2024, will mean letter carriers no longer go to their local facility to pick up mail for their route, instead traveling farther distances after starting at a consolidated location.

The impacted post offices will still conduct their retail operations, but a lot of the back-end functions will be stripped away and relocated. USPS has so far opened 29 of the consolidated Sorting and Delivery Centers and plans to open 400 in total, which will relocate sorting operations away from thousands of post offices. 

Kubayanda asked for information on how USPS is identifying the locations to stand up the new centers and how many clerks and letter carriers the S&DCs will relocate or terminate. He also requested data behind a new initiative to insource certain trucking operations, including the analysis supporting it and the potential cost savings associated with the changes. 

Postal management last month asked PRC to rescind its request. 

“This information request transgresses the stated limitations placed on the scope of this docket, exceeds the commission’s statutory authority, and should be withdrawn,” attorneys at the agency said. “The commission is not empowered to infringe on the Postal Service’s well-recognized strategic, managerial and operational independence by merely invoking the notion that such independence might affect costs or could have potential impacts on service.” 

In a statement, the Postal Service said the agency must adjust to market trends the commission must similarly adjust along with it. 

"To achieve the goals of the DFA Plan, which are essential to achieving Congress’s mandate to provide high-quality service while also being financially self-sufficient, the Postal Service must have the ability to exercise our statutory and regulatory authority without unnecessary bureaucratic restraint," USPS said. "Overreaching oversight which reflects ossified thinking or emphasizes bureaucratic procedure over substantive results puts the ability of the Postal Service to achieve our primary goals at significant risk."

USPS has fought against PRC’s attempts to glean information regarding DeJoy’s reforms since the commission first announced it would open an inquiry last year, but those have been unsuccessful. The two entities have repeatedly butted heads, including: 

• Postal management recently rejected PRC’s budget request for fiscal 2024, slashing 7% from the regulator’s request. Kubayanda said the process “raised red flags about potential risks to the commission’s independence.”
• Last year, DeJoy told Congress PRC was not just standing in the way of progress, but was itself complicit in the Postal Service’s poor financial position. “The Postal Regulatory Commission sat over and watched the destruction of the organization over the last 15 years and [was] actively participating in the destruction of the organization the last 15 years,” DeJoy said, adding he, on the other hand, was trying to save the agency. “What goes on and why they do the things they do, I have never figured out. And I'm a pretty smart guy.”
• DeJoy has publicly called on his regulator to allow the Postal Service to implement his reforms without constraints. The commission has not only continued its oversight, but suggested it requires a surge of resources to do so. Robert Taub, a current commissioner, recently told Congress that DeJoy was implementing “the most fundamental change to the network since Ben Franklin was the postmaster general” and it was not the time for the commission to step back. 
• In rejecting postal management’s request to close its inquiry into the Delivering for America plan, PRC said USPS should not attempt to “shield itself from scrutiny.”
• DeJoy has said USPS would be better off without the PRC, though the comments were stated in a light-hearted tone. 

On the lost contract, which USPS had struck with Publishers Clearing House, postal management said the regulators took too long to issue an approval and the arrangement no longer made financial sense for the company. The agency submitted the contract for review in August 2023 and hoped for a quick turnaround, but PRC did not issue its approval until November. PRC countered the agreement was incomplete and novel in its design, but it still issued provisional approval two months before it was set to take effect.

While the commission vowed to swiftly approve such agreements going forward, postal management suggested similar companies are now “left in limbo” as they wonder if their contracts would receive approval and how long that process would take. 

USPS has, at times, faced bipartisan criticism, employee protests and stakeholder concerns over its proposed changes. A recent inspector general report found the new sorting centers were generally operating smoothly, but at least initially failing to deliver on improved working conditions for employees.

On Thursday, Rep. Jamie Raskin, D-Md., the ranking member on the House Oversight and Accountability Committee, led more than 80 Democrats in asking President Biden to fill the two recent vacancies on the USPS board of governors who can provide oversight to the current leadership's "deeply concerning" vision. Despite the resistance, the agency does not appear eager to back down from its confrontational approach in sharing information related to its operational reforms. 

“If there is a legitimate statutory or regulatory basis for the information requested in the [PRC’s request] in the context of this proceeding, the Postal Service is not aware of it and the commission has not provided it,” USPS said.

This story was updated with additional comment from USPS.