August 18, 2020

USA: Postmaster General Announced Today US Postal Service Is Suspending Operational Changes Until After The November Election. The US Postal Service Union ENDORSED JOE BIDEN for President.

The Wall Street Journal
written by Natalie Andrews, Alexa Corse and Paul Ziobro
Tuesday August 18, 2020

WASHINGTON—Postmaster General Louis DeJoy said the U.S. Postal Service is suspending operational changes, such as removal of mail processing equipment and collection boxes, until after the November election, as the agency tries to reassure Americans that it can handle the anticipated surge in mail-in voting.

Calling the timely delivery of the nation’s election mail a “sacred duty,” Mr. DeJoy said the agency won’t change retail hours at post offices across the country or close any mail-sorting facilities.

“To avoid even the appearance of any impact on election mail, I am suspending these initiatives until after the election is concluded,” he said in a statement.

The about-face comes as Mr. DeJoy is due to testify before Congress this week, with Democrats set to accuse him of working with President Trump to sabotage the outcome of the election, in which mail-in voting is expected to increase sharply because of the coronavirus pandemic.

Mr. DeJoy, a Republican Party fundraiser and logistics executive, took the role of postmaster general in June. He has implemented changes, such as controlling overtime and reducing extra trips, which some postal union representatives and customers said caused delays.

Mr. DeJoy didn’t specify whether the Postal Service would reverse any changes that have already been made. A Postal Service spokesman declined to comment beyond Mr. DeJoy’s statement.

Mr. Trump said Tuesday he wasn’t involved in Mr. DeJoy’s announcement suspending the changes, but called him a “good man.”

“This pause only halts a limited number of the Postmaster’s changes, does not reverse damage already done, and alone is not enough to ensure voters will not be disenfranchised by the President this fall,” House Speaker Nancy Pelosi (D., Calif.) said of Mr. DeJoy’s announcement.

Republicans have largely defended Mr. DeJoy. While some acknowledge problems with the Postal Service, they have said those issues have existed for years and accused Democrats of creating a crisis.

Some efforts to reduce costs predated Mr. DeJoy’s arrival to the agency in June and were recommended by the agency’s inspector general.

The Postal Service has moved to decommission some sorting machines and it has removed blue collection boxes in some states, actions it said were part of the normal course of business.

Democrats and some postal union representatives have expressed concern that those moves would reduce capacity for handling election ballots. Some Democratic lawmakers held events at post offices Tuesday to protest the recent moves. Many Democrats have called for the resignation of Mr. DeJoy.

Mr. DeJoy said use of overtime has been and will be approved as needed. A widely circulated document last month—which the Postal Service later attributed to a midlevel manager and said wasn’t official policy—stated that overtime would be eliminated.

“The Postal Service is ready today to handle whatever volume of election mail it receives this fall,” Mr. DeJoy said in a press statement. The agency will also expand its task force on election mail and have additional resources on standby starting Oct. 1 to deal with demand.

Ronald Stroman, the former deputy postmaster general from 2011 who stepped down earlier this year, told reporters Tuesday that Mr. DeJoy’s statement suspending the changes “raises more questions than answers” and that it isn’t clear what changes have already taken place. “Vote early,” Mr. Stroman said. “Regardless of any changes or lack of changes.”

But Jack Potter, former postmaster general from 2001 to 2010, said, “I applaud the steps being taken by the Postmaster General today to assure the timely secure delivery of election mail in partnership with electoral officials throughout the country.” Mr. Potter also said, “This situation has once again brought to light the much needed reforms necessary to assure future mail service to America.”

Mark Dimondstein, president of the American Postal Workers Union, welcomed Mr. DeJoy’s announcement but said their fight was far from over and emphasized the need for Congress to approve more money for the Postal Service.

“These rollbacks would not have happened without public outcry and civic action,” Mr. Dimondstein said. “The public would not have been aware of these regressive policies if postal workers around the country had not sounded the alarm.”

Mr. DeJoy, who was selected by the bipartisan-by-statute Postal Service board of governors, who were all appointed by Mr. Trump, will appear before Republican-led Senate Homeland Security and Governmental Affairs Committee on Friday and before the House Oversight Committee, which is controlled by Democrats, next Monday.

“The Postal Service has had significant financial problems for years,” said Sen. Ron Johnson (R., Wis.), the chair of the Senate’s panel on homeland security. “The postmaster general should have an opportunity to describe those realities before going before a hostile House committee determined to conduct a show trial.”

Democrats have accused President Trump of using the Postal Service to attempt to undercut voters, citing the recent operational changes at the agency and his opposition to universal mail-in voting.

Mr. Trump has said he believes universal mail-in voting benefits Democrats and would be vulnerable to fraud and errors. While the president has said he opposes proactively mailing ballots to every voter, he says he is OK with voters requesting a by-mail ballot ahead of the election, which he calls absentee voting. The terms “absentee voting” and “vote-by-mail” are sometimes used interchangeably.

Researchers have found no evidence of widespread fraud linked to mailed ballots, although there have been isolated cases, and states employ safeguards.

Studies aren’t definitive on whether voting by mail gives one party an advantage.

The surge in voting by mail isn’t without challenges amid the pandemic. Some states and counties have limited staffing and technology to deal with a sharp increase in mailed ballots, which caused longer counting periods during recent primaries in New York and elsewhere.

The Postal Service, which processes more than 472 million pieces of mail a day on average, has said it has the capacity and financial resources to handle all election mail, which it estimates will account for less than 2% of all mail volume from mid-September until Election Day.

Senior postal officials have publicly said that election officials and voters need to realistically consider how long it takes to mail a ballot. The Postal Service has recommended that voters mail back their ballot at least a week in advance of their state’s due date, and many election officials encourage doing so even earlier, if possible.

Democrats and Republicans are seeking to provide additional funding for the Postal Service but have competing proposals on how much to appropriate. The Postal Service is an independent agency that doesn’t receive an annual taxpayer subsidy but instead is reimbursed by Congress for certain relatively small services.

The House plans to vote Saturday on a bill that would give $25 billion in additional funding to the agency, which is what the Postal Service requested to meet budget shortfalls and costs related to the coronavirus pandemic. The bill would also prohibit the agency from implementing any changes to operations or service levels it had in place on Jan.1 until the end of the Covid-19 emergency or Jan. 1, 2021, whichever comes later.

Senate Republicans are preparing a pared-down coronavirus aid package that would include $10 billion for the Postal Service as well as money for the unemployed and for testing and combating the coronavirus.

Even if Congress passes some funding for the Postal Service, it is unclear what exactly the money would go to and how soon the agency would get it.

Republicans point to the $10 billion loan that the Postal Service received through the coronavirus legislation that Congress passed in March. The details of the loan were completed in July, and Republicans say the Postal Service hasn’t been able to spend all of that money yet.
Barron's
written by Al Root
Monday March 30, 2020

The Cares Act, the $2 trillion stimulus package signed into law on Friday, is a massive shot in the arm for a moribund economy, with payments and loan guarantees to workers, small businesses, and industries hard hit by the Covid-19 pandemic. The U.S. Postal Service is included in the act too—it allows USPS to borrow up to $10 billion from the Treasury.

The government wants to ensure mail and packages keep flowing during this unprecedented period of economic pause. It’s a necessary step given that logistics providers are the lifeblood of any economy.

“As Americans are urged to stay home, the importance of the mail will only grow as people will need access to communications and essential packages such as prescription drugs and other necessities,” the USPS said in a statement. “This is particularly true in rural and other areas.”

“National post carriers are declaring force majeure, suspending service, or otherwise making significant adjustments,” iDrive Logistics strategist Matthew White tells Barron’s.

(Force majeure is invoked when an entity can’t fulfill a contract because of unforeseeable circumstances.)

Deutsche Post (ticker: DPW. Germany), owner of DHL, for instance, recently reserved the right to modify services—effectively declaring force majeure—potentially delaying international shipments. One issue the lack of commercial flights which typically carry freight along with people.

That isn’t the case in the U.S. “Carriers in the United States are handling this crisis with relative aplomb,” adds White. “It is highly likely that the USPS’ longstanding agreement with FedEx Express could be further leveraged, as well as cargo assets of domestic airlines.”

It’s a difficult operating environment, to say the least. The USPS, for its part, is grateful for federal support but says it could need more.

“The Postal Service remains concerned that this measure will be insufficient to enable the Postal Service to withstand the significant downturn in our business that could directly result from the pandemic,” a post office representative told Barron’s in an emailed statement. “Under a worst-case scenario, such downturn could result in the Postal Service having insufficient liquidity to continue operations.”

It isn’t clear how mail volumes have been impacted by the outbreak, but the USPS statement struck a very cautious tone. It’s possible that with the economy slowing, volume could decrease as things like direct mail marketing decline. But letter carriers are still delivering mail—including social security checks and medicine—six days a week.

In recent quarters, the Postal Service lost money, but mainly because of Byzantine accounting rules that required the post office to pre-fund retiree health care benefits. All U.S. companies pre-fund pension benefits. But the USPS is the only one required to pre-fund retiree health care benefits.


Retiree health care benefits and pensions are two different things. General Electric (GE), for instance, has a large retiree pension. That isn’t surprising because the company is more than 120 years old. GE has, very roughly, a $90 billion pension obligation and more than $70 billion in assets already set aside.

GE also has more than $5 billion in promised retiree benefits, but less than $300 million set aside to meet them. GE, as well as most U.S. companies, pay retiree health benefits as they are incurred.

The problem for the USPS is the prefunding requirement is a claim on cash flow. And cash—as investors are learning these days—is king. The USPS still generates free cash flow. Free cash flow approximates earnings, but backs out noncash expenses, such as the health care prefunding.

The loan from the stimulus package isn’t a bailout. And, in normal times, the Postal Service gets no direct support from the federal government. The government says money in the CARES Act can be used for operating expenses but not to repay debt. What’s more, any loans received are intended to help speed the delivery of medical products while protecting the safety of postal workers.

The post office has a universal service mandate, and it costs the same to mail a letter to a rural community as it does to mail one in densely populated urban areas. That pricing reality is one of the constant tensions the post office has to live with and manage through. The USPS doesn’t get to set the price for a stamp either. Congress, effectively, does that. The USPS can negotiate rates for parcel delivery with businesses, but it’s pricing situation is unique in American logistics industry.

The USPS situation bears watching, because—along with mail being essential for the country during the pandemic—it has implications for publicly traded players. As White points out, USPS has partnerships and competes with publicly traded players including FedEx (FDX) and United Parcel Service (UPS).

At this point of the pandemic, the importance of logistics is evident in the stock prices of transportation industry players.

The Russell 3000 Truckers Index—which includes firms like Old Dominion Freight Line (ODFL) and J.B. Hunt Transport Services (JBHT)—is down less than 15% year to date, better than the 24% drop of the Dow Jones Industrial Average and the 21% drop of the S&P 500.

UPS and FedEx have outperformed too. UPS is down 17% year to date. FedEx, on the other hand, is off 20%.

The post office, of course, isn’t publicly traded. Investors don’t have a chance to ask management about the state of operations. But additional support hinted at in the USPS statement could come in the form of more loans, changing accounting rules, or, perhaps, more power over pricing.
👇 ABC News reporting false information 👇

Posted by Princess Mononoke at 6:32 PM

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