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%.

6 thoughts on “USPS Manager Can’t Say If Flats Strategy Is Achieving Hoped-For Savings”

  1. And how much longer do we have to endure this miss management under Potter. What kind of testimony did you think you were going to get from a guy who should have been indicted for delaying the mail, that is the punishment a letter carrier would of gotten for delaying or hiding mail

  2. FSS machines won’t only save money, it’ll MAKE money! For Northrop-Grumman, that is! They can charge us whatever they want when it breaks down (and it will) and needs parts, maintenance and/or replacing! At least FSS machines are not war machines, so this money-laundering/kickback scheme sucks for the USPS but doesn’t hurt the taxpayer–only USPS employees and postal patrons who send actually use us.

  3. And the general public still believes that all of the problems the USPS is experiencing lay strictly with the employees. Those of you who believe that are no better than the incompetent morons who currently run the USPS.

  4. Pingback: USPS Manager Can’t Say If Flats Strategy Is Achieving Hoped-For Savings at Postal Affairs Blog

  5. So, according to the head of the FSS program, the Postal Service has spent hundreds of millions of dollars on not just the sorting machnes, but the gigantic buildings that will house them, the training for the maintenance people, thousands of man-hours of paperwork and organization; and DO NOT know whether they will gain any savings out of the program?
    The leadership of the Postal Service needs to be replaced! What company goes off on this kind of wild goose chases and can survive?
    Is this why “Doomsday” Jack Potter says the Postal Service cannot survive as it is? what he reqlly means is that the Postal Service cannot survive this kind of management!!

  6. If you want to know the facts, ask the people who handle the mail. We have nothing to gain by lying.

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